Exhibit 2
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EXECUTION VERSION
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SECURITIES PURCHASE AGREEMENT
BY AND BETWEEN
PROXIM CORPORATION
AND
THE PURCHASERS NAMED HEREIN
Dated as of June 16, 2002
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This SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
the 16th day of June 2002 by and among Proxim Corporation, a Delaware
corporation with its principal office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(the "Company"), and each of the purchasers named in EXHIBIT A attached hereto
(each, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company has authorized the issuance of (i) up to
3,000,000 shares of its Series A Convertible Preferred Stock (the "Preferred
Stock"), which shares are, or will be, upon issuance, convertible into
authorized but unissued shares of class A common stock, $.01 par value per
share, of the Company (the "Common Stock"), and (ii) warrants to purchase
12,271,345 shares of Common Stock (the "Warrants");
WHEREAS, the Company seeks financing to fund the Acquisition (as
defined below); and
WHEREAS, the Company desires to issue and sell to the Purchasers
pursuant to this Agreement, and the Purchasers, severally, desire to purchase
from the Company (i) the number of shares of Preferred Stock as is set forth
opposite its respective name in EXHIBIT A hereto, (ii) Warrants to purchase the
number of shares of Common Stock as is set forth opposite its respective name in
EXHIBIT A hereto and (iii) the aggregate principal amount of senior convertible
promissory notes as is set forth opposite its respective name in EXHIBIT A
hereto;
NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
1.1. "Affiliate" shall mean, with respect to any Person, any other
Person controlling, controlled by or under direct or indirect common control
with such Person. For the purposes of this definition "control," when used with
respect to any specified Person, shall mean the power to direct the management
and policies of such Person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
1.2. "Code" means the Internal Revenue Code of 1986, as amended.
1.3. "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
1.4. "Disclosure Documents" means the Company's Registration Statement
on Form S-4, filed on February 25, 2002, the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2002, any Current Reports on Form 8-K filed
by the Company on or after March 31, 2002, and the Company's Schedule 14A Proxy
Statement for its Annual Meeting
of Stockholders, dated May 14, 2002, together in each case with any documents
incorporated by reference therein or exhibits thereto.
1.5. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and all of the rules and regulations promulgated thereunder.
1.6. "Material Adverse Change" means any change, event or occurrence
which, individually or in the aggregate, has had a material adverse effect on,
or a material adverse change in, (i) the business, operations, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, that had the effect of reducing revenues or net income of the Company
and its subsidiaries, taken as a whole, by more than $15 million in any quarter
compared to published financial statements (if publicly announced) or consensus
analysts estimates (in the case of a quarter for which financial results have
not yet been publicly announced) and that was not disclosed in any Disclosure
Document filed on or prior to the date hereof or (ii) the ability of the Company
to perform its obligations under this Agreement, in each case other than any
change, event or occurrence (a) resulting from conditions in the United States
or foreign economies or securities markets in general or any change in the
Company's stock price, (b) resulting from conditions in the industry in which
the Company operates in general, except to the extent that the Company is
disproportionately affected thereby, (c) resulting from the public announcement
of the transactions contemplated by this Agreement, (d) arising out of or
resulting from actions of the Purchasers in connection with this Agreement or
(e) that may constitute a material adverse change (or similar effect) under the
Orinoco Agreement, whether or not waived by the Company.
1.7. "Material Adverse Effect" means, collectively, a material adverse
effect on, or a material adverse change in, or group of such effects on or
changes in, (i) the business, operations, financial condition, results of
operations, assets or liabilities of the Company and its subsidiaries, taken as
a whole or (ii) the ability of the Company to perform its obligations under this
Agreement, in each case other than any change, event or occurrence (a) resulting
from conditions in the United States or foreign economies or securities markets
in general or any change in the Company's stock price, (b) resulting from
conditions in the industry in which the Company operates in general, except to
the extent that the Company is disproportionately affected thereby, (c)
resulting from the public announcement of the transactions contemplated by this
Agreement, or (d) arising out of or resulting from actions of the Purchasers in
connection with this Agreement
1.8. "Note" means one or more senior convertible promissory note(s)
containing the same terms and conditions, and with the same conversion features,
as set forth in the form of note attached hereto as EXHIBIT B.
1.9. "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association or joint venture.
1.10. "Plans" shall mean employee benefit plans as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and all other employee benefit practices or arrangements, including,
without limitation, any such practices or arrangements providing severance pay,
sick leave, vacation pay, salary continuation for
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disability, retirement benefits, deferred compensation, bonus pay, incentive
pay, stock options or other stock-based compensation, hospitalization insurance,
medical insurance, life insurance, scholarships or tuition reimbursements,
maintained by the Company or any of its subsidiaries or to which the Company or
any of its subsidiaries is obligated to contribute for Employees or individuals
other than Employees who at any time prior to the date of this Agreement
performed services as an Employee primarily for the Company ("Former
Employees").
1.11. "SEC" shall mean the Securities and Exchange Commission.
1.12. "Securities" shall mean the Shares, the Notes, the Warrants,
shares of Common Stock issuable upon conversion of the Shares and exercise of
the Warrants and shares of Preferred Stock issuable upon conversion of the
Notes; provided, that for purposes of Section 7 (other than Section 7.1 and 7.2)
"Securities" shall not include the Notes.
1.13. "Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.
1.14. "Shares" shall mean the shares of Series A Convertible Preferred
Stock issued pursuant to this Agreement.
1.15. "Tax Returns" shall mean returns, reports, information
statements and other documentation (including any additional or supporting
material) filed or maintained, or required to be filed or maintained, in
connection with the calculation, determination, assessment or collection of any
Tax and shall include any amended returns required as a result of examination
adjustments made by the Internal Revenue Service or other Tax authority.
1.16. "Taxes" shall mean any and all federal, state, local, foreign
and other taxes, levies, fees, imposts, duties and charges of whatever kind
(including any interest, penalties or additions to the tax imposed in connection
therewith or with respect thereto), whether or not imposed on the Company,
including, without limitation, taxes imposed on, or measured by, income,
franchise, profits or gross receipts, and also ad valorem, value added, sales,
use, service, real or personal property, capital stock, license, payroll,
withholding, employment, social security, workers' compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, transfer and gains taxes and customs duties.
1.17. "Warburg" shall refer to Warburg Pincus Private Equity VIII,
L.P. and its Affiliates.
2. Authorization, Purchase and Sale of Shares and Warrants.
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2.1. Authorization of Securities. The Company has, or on or before the
Initial Closing Date (as defined below) will have, (i) authorized and created a
series of its preferred stock consisting of 3,000,000 shares of Preferred Stock,
par value $.01 per share, designated as its "Series A Convertible Preferred
Stock," (ii) authorized the Notes, (iii) authorized the Warrants, (iv)
authorized the issuance of the shares of Common Stock issuable upon conversion
of the Shares and exercise of the Warrants and (v) authorized the issuance of
the shares of Preferred Stock issuable upon conversion of the Notes. The terms,
limitations and relative rights
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and preferences of the Preferred Stock are set forth in a Certificate of
Designations, Number, Preferences and Rights of Series A Convertible Preferred
Stock of the Company, which will have been filed on or before the Initial
Closing Date with the Secretary of State of the State of Delaware and a copy of
which is attached hereto as EXHIBIT C (the "Certificate of Designation").
2.2. Purchase and Sale of Preferred Stock and Notes.
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(a) Subject to and upon the terms and conditions set forth in this
Agreement, at the Initial Closing (as defined below), the Company shall issue
and sell to each Purchaser, and each Purchaser, severally, shall purchase from
the Company (i) the total number of Shares set forth opposite the name of such
Purchaser under the heading "No. of Shares of Series A Convertible Preferred
Stock to be Purchased" on EXHIBIT A hereto, at a purchase price of $25.00 per
share and (ii) the aggregate principal amount of Notes set forth opposite the
name of such Purchaser under the heading "Principal Amount of Notes to be
Purchased" on EXHIBIT A hereto, at a purchase price equal to the principal
amount of Notes purchased.
(b) Subject to and upon the terms and conditions set forth in this
Agreement, at the Second Closing (as defined below) the Company shall issue the
shares of Preferred Stock issuable upon conversion of the Notes in accordance
with the terms of the Notes.
2.3. Issuance of Warrants. Subject to the terms and conditions of this
Agreement, the Company hereby agrees to issue to each Purchaser, as part of its
inducement to purchase the Shares and Notes being purchased by such Purchaser:
(i) at the Initial Closing, a Warrant entitling it to purchase the number of
shares of Common Stock as set forth opposite its name under the heading "Initial
Closing Warrant Coverage" on EXHIBIT A hereto and (ii) at the Second Closing, a
Warrant entitling it to purchase the number of shares of Common Stock as set
forth opposite its name under the heading "Second Closing Warrant Coverage" on
EXHIBIT A hereto, each with an exercise price of $3.0559 per share (subject to
adjustment as provided therein). The Warrants shall contain the same terms and
conditions and have the same exercise features as are set forth in the form of
Warrant attached hereto as EXHIBIT D.
2.4. Closing.
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(a) The initial closing (the "Initial Closing") shall take place at
the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇
on the date the Acquisition (as defined below) is scheduled to occur or such
other date mutually agreed to by the Company and the Purchasers (the "Initial
Closing Date"). At the Initial Closing, the Company shall deliver to each
Purchaser (i) a certificate for the number of Shares being purchased by it at
the Initial Closing as set forth on EXHIBIT A hereto, registered in the name of
such Purchaser, (ii) one or more Note(s) in the principal amount as set forth
opposite such Purchaser's name on EXHIBIT A hereto and (iii) a Warrant
representing the right to purchase the number of shares of Common Stock as set
forth opposite its name under the heading "Initial Closing Warrant Coverage" on
EXHIBIT A hereto, against payment to the Company of the purchase price therefor
set forth opposite the name of such Purchaser on EXHIBIT A hereto under the
caption "Purchase Price Payable at the Initial Closing" by wire transfer to the
Company of immediately available funds.
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(b) The second closing (the "Second Closing") shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ on
the first business day following the date of the special meeting of stockholders
of the Company (the "Special Meeting") approving the issuance of (i) the shares
of Preferred Stock issuable upon conversion of the Notes in accordance with the
terms of the Notes and (ii) the additional Warrants to be issued at the Second
Closing as provided herein. At the Second Closing, the Company shall deliver to
each Purchaser (i) a certificate for the number of shares of Preferred Stock
issuable upon conversion of the Notes held by such Purchaser and (ii) a Warrant
representing the right to purchase the number of shares of Common Stock as set
forth opposite its name under the heading "Second Closing Warrant Coverage" on
EXHIBIT A hereto. The Initial Closing and the Second Closing are collectively
referred to as the "Closings." If at the Special Meeting the stockholders of the
Company do not approve the issuance of the shares of Preferred Stock issuable
upon conversion of the Notes and the issuance of the additional Warrants to be
issued at the Second Closing, then no Second Closing shall occur and the Notes
shall remain outstanding in accordance with their terms.
2.5. Use of Proceeds. The Company will apply the net proceeds from the
sale of the Shares, the Notes and the Warrants to finance (i) the acquisition
(the "Acquisition") of the wireless Local Area Network operations of Agere
Systems, Inc. ("Agere") currently known as ORiNOCO, all as provided in that
certain Asset Purchase Agreement by and between Agere and the Company, dated as
of even date herewith (the "Orinoco Agreement"), (ii) the payment of fees and
expenses related to the Acquisition and this Agreement and (iii) working capital
requirements of the Company.
3. Representations and Warranties of the Company. Except as set forth
in the Disclosure Documents or in a corresponding numbered section of the
disclosure schedule delivered to each Purchaser prior to the execution of this
Agreement (the "Disclosure Schedule"), the Company hereby represents and
warrants to each of the Purchasers as follows:
3.1. Incorporation. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a Material Adverse Effect. The
Company has all requisite corporate power and authority to carry on its business
as now conducted.
3.2. Subsidiaries. The Company has no material subsidiaries and no
material interests or investments in any partnership, trust or other entity or
organization. Each subsidiary of the Company that is a corporation has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business and is duly
registered, qualified and authorized to transact business and is in good
standing in each jurisdiction in which the conduct of its business or the nature
of its properties requires such registration, qualification or authorization,
except where such failure to so qualify or register would not be reasonably
likely to have a Material Adverse Effect. All of the issued and outstanding
capital stock of each subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable, and is owned by the Company free and clear of any
mortgage, pledge,
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lien, encumbrance, security interest, claim or equity, other than any of the
foregoing pledged pursuant to the Security Agreement, dated November 1, 1999, by
and between the Company and Credit Suisse First Boston (the "Security
Agreement").
3.3. Capitalization.
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(a) As of the date of this Agreement, the authorized capital stock of
the Company consists of 200,000,000 shares of Common Stock, 100,000,000 shares
of class B common stock, par value $.01 per share (the "Class B Common Stock")
and 25,000,000 shares of undesignated preferred stock, par value $.01 per share.
As of the date of this Agreement, there are no shares of Class B Common Stock or
Preferred Stock issued and outstanding. The number of outstanding shares of
Common Stock as of June 14, 2002 was 119,143,217 and the total number of shares
of Common Stock issuable pursuant to stock options outstanding at June 14, 2002
was 33,621,083. 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 preemptive rights, "poison pill" provisions,
rights of first offer or refusal or similar rights.
(b) Except for the issuance of shares of Common Stock pursuant to the
exercise of outstanding options granted pursuant to the Company's option plans
or pursuant to the exercise of warrants to purchase shares of Common Stock,
including any such options granted after March 31, 2002, the Company has not
issued any capital stock since March 31, 2002, except as contemplated by this
Agreement. Except as set forth in or contemplated by the Disclosure Documents or
this Agreement, and except for the issuance of options to purchase shares of the
Company's Common Stock pursuant to the Company's option plans, there are no
existing options, warrants, calls, preemptive (or similar) rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued,
transferred or sold, any shares of the capital stock of the Company or other
equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests.
3.4. Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization of the
Securities and the filing of the Certificate of Designation, the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein has been taken, other than the approvals
contemplated at the Special Meeting. When executed and delivered by the Company,
this Agreement shall constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, and except as may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and by general equitable principles. The Company has
all requisite corporate power to enter into this Agreement and to carry out and
perform its obligations under the terms of this Agreement. The Board of
Directors of the Company (the "Board of Directors") has taken all action
necessary to render inapplicable, as it relates to Warburg, the provisions of
Section 203 of the General Corporation Law of the State of
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Delaware. At or prior to the Initial Closing, the Company will have reserved for
issuance (i) the shares of Common Stock initially issuable upon conversion of
the Shares and exercise of the Warrants and (ii) the shares of Preferred Stock
initially issuable upon conversion of the Notes.
3.5. Valid Issuance.
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(a) The Shares being purchased by the Purchasers hereunder will, upon
issuance pursuant to the terms hereof and upon payment therefor, be duly
authorized and validly issued, fully paid and non-assessable shares of Preferred
Stock, free of preemptive or similar rights. Upon their issuance in accordance
with the terms of the Preferred Stock or Warrants, as the case may be, the
shares of Common Stock issued upon conversion of the Shares or exercise of the
Warrants, as the case may be, will be duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock, free of all preemptive or
similar rights. Upon their issuance in accordance with the terms of the Notes,
the shares of Preferred Stock issued upon conversion of the Notes will be duly
authorized, validly issued, fully paid and non-assessable shares of Preferred
Stock, free of all preemptive or similar rights.
(b) Subject to the accuracy of the representations made by the
Purchasers in Section 4 hereof, the Securities will be issued to the Purchasers
in compliance with applicable exemptions from (i) the registration and
prospectus delivery requirements of the Securities Act and (ii) the registration
and qualification requirements of all applicable securities laws of the states
of the United States. The Company is eligible to file as of the date hereof 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.
3.6. Financial Statements. The financial statements of the Company
included in the Disclosure Documents (collectively, the "Financial Statements")
present fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified. The Financial Statements fairly
present the consolidated financial position of the Company at the dates thereof
and the consolidated results of operations for the periods then ended in
accordance with generally accepted accounting principles applied on a consistent
basis ("GAAP") throughout the period therein specified (except in the case of
quarterly financial statements for the absence of footnote disclosure and
subject, in the case of interim periods, to normal year-end adjustments which,
individually, and in the aggregate are not expected to be material).
3.7. Absence of Certain Changes. Since December 29, 2001, the Company
and its subsidiaries have conducted their business only in the ordinary course
of such business consistent with past practice and there has not been (i) any
Material Adverse Effect, (ii) any material commitment, contractual obligation,
borrowing, capital expenditure or transaction (each, a "Commitment") entered
into by the Company or any of its subsidiaries, other than (a) Commitments in
the ordinary course of business, (b) this Agreement and (c) the Orinoco
Agreement and any other Commitments contemplated thereby, (iii) any action taken
which, if taken after the date hereof, would constitute a material breach of any
provision or covenant herein, or (iv) any material change in the Company's
accounting principles, practices or methods other than as required by concurrent
changes in GAAP.
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3.8. Absence of Litigation. There is no action, suit, proceeding,
arbitration, claim, investigation or inquiry pending or, to the Company's
knowledge, threatened by or before any governmental body against the Company in
which an unfavorable outcome, ruling or finding in any said matter, or for all
such matters taken as a whole, would reasonably be expected to have a Material
Adverse Effect. The foregoing includes, without limitation, any such action,
suit, proceeding or investigation that questions this Agreement or seeks to
delay or prevent the consummation of the transactions contemplated hereunder or
the right of the Company to execute, deliver and perform under same. 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, suit, proceeding, claim, investigation or inquiry by the Company or any
subsidiary is currently pending nor does the Company intend to initiate any
action, suit, proceeding, claim, investigation or inquiry, in each case, that if
resolved in a manner adverse to the Company, is reasonably likely to have a
Material Adverse Effect.
3.9. Intellectual Property. (i) The Company owns or possesses
sufficient rights to use all (A) material patents (and any renewals and
extensions thereof), patent rights (and any applications therefor), rights of
priority and other rights in inventions; (B) trademarks, service marks, trade
names and trade dress, and all registrations and applications therefor and all
legal or common-law equivalents of any of the foregoing; (C) copyrights and
rights in mask works (and any applications or registrations for the foregoing,
and all renewals and extensions thereof), common-law copyrights and rights of
authorship including all rights to exploit any of the foregoing in any media and
by any manner and means now known or hereafter devised; (D) industrial design
rights, and all registrations and applications therefor; (E) rights in data,
collections of data and databases, and all legal or common-law equivalents
thereof; (F) rights in domain names and domain name reservations; (G) rights in
trade secrets, proprietary information and know-how (collectively with all
licenses and other agreements providing Company with the right to use any item
of the type referred to in clauses (A) through (G), "Intellectual Property")
that are necessary for the conduct of its business as now conducted except where
the failure to currently own or possess would not have a Material Adverse
Effect; (ii) the Intellectual Property is valid, subsisting, in proper form and
enforceable and all renewal fees and other maintenance fees have been paid;
(iii) the Company is in material compliance with all contractual obligations
relating to the use and protection of such of the Intellectual Property as is
used pursuant to license or other agreement; (iv) to the knowledge of the
Company there is no present or former employee, officer or director of Company
or agent or outside contractor that holds or claims any material right, title or
interest, directly or indirectly, in or to any Intellectual Property; and (v) to
the Company's knowledge, the present business activities and products of the
Company have not and do not infringe any known intellectual property or other
proprietary rights of any third party, the Company is not making unauthorized
use of any confidential information or trade secrets of any third party, the
Company has not received any notice of any asserted infringement (nor is the
Company aware of any reasonable basis for any third party asserting an
infringement) by the Company of, any rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
Material Adverse Effect.
3.10. Disclosure Documents. The information contained or incorporated
by reference in the Disclosure Documents was true and correct in all material
respects as of the respective dates of the filing thereof with the SEC; and, as
of such respective dates, the Disclosure Documents did not contain an untrue
statement of a material fact or omit to state a
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material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent updated or superseded by any report
subsequently filed by the Company with the SEC. The Company is not party to any
material contract, agreement or other arrangement that was required to have been
filed as an exhibit to any Disclosure Document that was not so filed, other than
this Agreement and the Orinoco Agreement.
3.11. Books and Records. The minute books and other records of the
Company and its subsidiaries contain in all material respects accurate records
of all Company board, committee and stockholders' meetings and accurately
reflect in all material respects all other corporate action of the stockholders
and directors and any committees thereof of the Company and its subsidiaries and
all actions of the directors of the Company's subsidiaries, in each case since
January 1, 2001.
3.12. Consents. All consents, approvals, orders and authorizations
required on the part of the Company in connection with the execution, delivery
or performance of this Agreement and the consummation of the transactions
contemplated herein, other than (i) in connection with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
regulations promulgated thereunder, (ii) the filing of the Certificate of
Designation with the Secretary of State of the State of Delaware, have been
obtained and will be effective as of the Initial Closing Date, other than such
filings required to be made after the Initial Closing under applicable federal
and state securities laws and (iii) other than any of the foregoing, the failure
to make or obtain will not have a Material Adverse Effect. Except for the
approvals contemplated at the Special Meeting, the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated herein do not require the approval of the Company stockholders.
3.13. No Conflict. The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the Certificate of Incorporation or By-laws
of the Company or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to the
Company or its properties or assets, except, in the case of clause (ii), as
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
3.14. Brokers or Finders. Other than with respect to Credit Suisse
First Boston and Broadview International, LLC, the fees of which will be borne
by the Company, the Company has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.15. Nasdaq National Market. The Common Stock is registered pursuant
to Section 12(b) of the Exchange Act and is listed on the Nasdaq National Market
("Nasdaq"), and, except as contemplated by this Agreement, the Company has taken
no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the
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Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company
received any notification that the SEC or the NASD, Inc. is contemplating
terminating such registration or listing.
3.16. No Manipulation of Stock. The Company has not taken, in
violation of applicable law, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the transactions contemplated hereby or the sale or
resale of the shares of Common Stock.
3.17. Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Shares and Warrants will not be, an "investment
company" or an entity "controlled" by an "investment company" within the meaning
of the Investment Company Act.
3.18. Title to Property and Assets. The Company and each of its
subsidiaries owns or possesses the necessary right to use or title to all
properties, assets, licenses, permits and the like required to operate its
business as currently operated, except for such properties, assets, licenses,
permits and the like, the absence of which would not result in a Material
Adverse Effect. The properties and assets of the Company and each of its
subsidiaries owned by them are owned free and clear of all mortgages, deeds of
trust, liens, charges, encumbrances and security interests except (i) for
statutory liens for the payment of current taxes that are not yet delinquent,
(ii) liens arising under the Security Agreement and (iii) liens, encumbrances
and security interests that arise in the ordinary course of business and do not
in any material respect impair the properties and assets of the Company and its
subsidiaries. With respect to the property and assets it leases, the Company and
each of its subsidiaries is in compliance with such leases in all material
respects.
3.19. Labor Relations. Neither the Company nor its subsidiaries is
party to any collective bargaining agreement covering any individual who
performs services as an employee primarily for the Company or any of its
subsidiaries (including such persons who are on an approved leave of absence,
vacation, short-term disability or otherwise treated as an active employee of
the Company or any of its subsidiaries, "Employees"), and there are no
controversies or unfair labor practice proceedings pending or, to the Company's
knowledge, threatened between the Company or any of its subsidiaries and any of
their current or former Employees or any labor or other collective bargaining
unit representing any current or former Employee of the Company or any of its
subsidiaries that would reasonably be expected to result in a labor strike,
dispute, slow-down or work stoppage or otherwise have a Material Adverse Effect.
To the Company's knowledge, no organizational effort is presently being made or,
to the Company's knowledge, threatened by or on behalf of any labor union.
3.20. Employee Benefits.
-----------------
(a) Neither the Company nor any trade or business (whether or not
incorporated) which has been under common control or treated as a single
employer with the Company under Section 414(b), (c) or (m) of the Code (an
"ERISA Affiliate") has incurred, or is reasonably likely to incur, any liability
under Title IV of ERISA or Section 412 of the Code and
10
none of the Plans is a Multiemployer Plan, as defined in Section 3(37) of ERISA.
Neither the Company nor any ERISA Affiliate has incurred any liability resulting
from a complete or partial withdrawal from any Multiemployer Plan, and none of
them has incurred, or is reasonably likely to incur, any liability due to the
termination or reorganization of a Multiemployer Plan which has not been
satisfied in full, and to the Company's knowledge, no event has occurred that
would subject the Company or any ERISA Affiliate to any such liability.
(b) Each Plan has been administered in material compliance with its
terms, and other applicable laws, rules and regulations including, without
limitation, the provisions of ERISA and the Code, and there are no material
pending or, to Company's knowledge, threatened claims by, on behalf of or
involving any plan administrator or any plan trustee (other than routine claims
for benefits).
(c) No "prohibited transaction" within the meaning of Section 4975 of
the Code has occurred with respect to any Plan.
(d) Each Plan that is intended to qualify under Section 401(a) of the
Code does so qualify.
(e) Except as set forth on Schedule 3.20 of the Disclosure Schedule or
as may be required under Section 4980B of the Code, or Section 601 of ERISA,
neither the Company nor any of its subsidiaries has any liability for
post-retirement medical or life insurance benefits or coverage for any Employee
or Former Employee or any dependent of any such Employee or Former Employee.
(f) The consummation of the transactions contemplated hereby will not
result in any increase in the amount of compensation or benefits or accelerate
the vesting or timing of payment of any compensation or benefits payable by the
Company to or in respect of any Employee or Former Employee or the beneficiary
or dependent of any such Employee or Former Employee under any Plan.
(g) Except as set forth on Schedule 3.20 of the Disclosure Schedule,
no amount payable by the Company or any of its subsidiaries to any Employee or
Former Employee will fail to be deductible for Federal income tax purposes by
reason of Section 162(m) or 280G of the Code.
(h) All employee benefits practices or arrangements which are
maintained by the Company or any of its subsidiaries for the benefit of their
non-United States Employees or United States Employees located in a foreign
jurisdiction (collectively, the "Foreign Plans") have been maintained in all
material respects in accordance with the applicable laws of such foreign
jurisdiction, and all Foreign Plans required to be registered with any
governmental agency have been registered and have been maintained in good
standing with such governmental agency.
3.21. Environmental Matters.
---------------------
(a) Except as would not reasonably be likely to result in a material
liability to the Company, no underground storage tanks and no amount of any
substance that has been designated by any governmental agency or by applicable
federal, state or local law to be
11
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding routine quantities of office
and janitorial supplies (a "Hazardous Material"), are present as a result of the
actions of the Company, or, to the Company's knowledge, as a result of the
actions of a third party, in, on or under any property, including the land and
the improvements, ground water and surface water thereof, that the Company or
any of its subsidiaries currently owns, operates, occupies or leases, or to the
Company's knowledge, has at any time owned, operated, occupied or leased.
(b) Except as would not reasonably be likely to result in a material
liability to the Company (in any individual case or in the aggregate), neither
the Company nor any of its subsidiaries has transported, stored, used,
manufactured, disposed of or arranged for the disposal of, released or exposed
its employees or others to Hazardous Materials in violation of any federal,
state or local law, rule, regulation, treaty or statute in effect before the
Initial Closing Date related to protection of human health, safety, and the
environment, including natural resources (collectively, "Environmental Laws"),
or in a manner that would likely result in any material liability to the
Company.
(c) Except as would not reasonably be likely to result in a material
liability to the Company, the Company and its subsidiaries currently hold and
are in compliance with all approvals, permits, licenses, clearances and consents
required under Environmental Laws for the conduct of the Company's and its
subsidiaries' businesses as currently being conducted.
(d) No action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to the Company's knowledge, threatened
alleging that the Company and its subsidiaries are in violation of or liable
under any Environmental Law.
(e) To the Company's knowledge, there are no material expenditures
required to maintain or achieve compliance with all applicable Environmental
Laws.
3.22. Taxes.
-----
(a) Except as otherwise disclosed in Schedule 3.22, (i) the Company
has filed (or joined in the filing of) when due all Tax Returns required by
applicable law to be filed with respect to the Company and all Taxes shown to be
due on such Tax Returns have been paid; (ii) all such Tax Returns were true,
correct and complete in all material respects as of the time of such filing; or
(iii) any liability of the Company for Taxes not yet due and payable, or which
are being contested in good faith, in each case as of December 31, 2001, has
been accrued or reserved for on the financial statements of the Company in
accordance with GAAP. Since December 31, 2001, the Company has not incurred any
material Taxes other than in the ordinary course of business.
(b) No current or former subsidiary of the Company has ever been a
member of any "affiliated group" (within the meaning of Section 1504(a) of the
Code) included in any
12
consolidated federal income Tax Return filed with the Internal Revenue Service
other than an affiliated group of which the Company is the common parent.
3.23. Insurance. All insurance policies carried by, or covering the
Company's properties are in full force and effect, and no notice of cancellation
has been given with respect to any such policy. All premiums due on such
policies have been paid in a timely manner and the Company has complied in all
material respects with the terms and provisions of such policies. The insurance
coverage provided by such policies is provided by insurers that, to the
knowledge of the Company, are solvent and is in such amount and types of
coverage which are adequate and customary for the industries in which the
Company operates.
3.24. 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 Shares, the Notes and the Warrants. The Company has not, directly or
indirectly, 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, the Notes and
Warrants sold pursuant to this Agreement.
3.25. 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 assets 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.
3.26. By-Laws. The Company's By-Laws provide that all matters
submitted to a meeting of stockholders, including the vote relating to the
issuance of the shares of Preferred Stock on conversion of the Notes and the
issuance of the Warrants to be issued at the Second Closing, shall require the
affirmative vote of a majority of the total number of votes cast, present in
person or by proxy.
3.27. Credit Agreement. As of the date hereof, there are no amounts
outstanding under the Credit Agreement, dated November 1, 1999, by and between
the Company and Credit Suisse First Boston.
4. Representations and Warranties of Each Purchaser. Each Purchaser,
severally for itself and not jointly with the other Purchasers, represents and
warrants to the Company as follows:
4.1. Organization. Each Purchaser, if it is a legal entity, is duly
and validly existing under the jurisdiction of its organization.
4.2. Authorization. All action on the part of such Purchaser necessary
for the authorization, execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein has been taken. This
Agreement constitutes the legal, valid
13
and binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general equitable principles. Such Purchaser has all requisite power to
enter into this Agreement and to carry out and perform its obligations under the
terms of this Agreement.
4.3. Purchase Entirely for Own Account Etc. Such Purchaser is
acquiring the Securities for its own account, and not with a view to, or for
sale in connection with, any distribution of the Securities in violation of the
Securities Act. Except as contemplated by this Agreement, such Purchaser has no
present agreement, undertaking, arrangement, obligation or commitment providing
for the disposition of the Securities. Such Purchaser, if it is a legal entity,
has not been organized, reorganized or recapitalized specifically for the
purpose of investing in the Securities.
4.4. Investor Status; Etc. Such Purchaser certifies and represents to
the Company that at the time such Purchaser acquires any of the Shares, the
Notes or Warrants, such Purchaser will be an "accredited investor" as defined in
Rule 501 of Regulation D promulgated under the Securities Act. Such Purchaser's
financial condition is such that it is able to bear the risk of holding the
Shares, the Notes or Warrants for an indefinite period of time and the risk of
loss of its entire investment. Such Purchaser has been afforded the opportunity
to ask questions of and receive answers from the management of the Company
concerning this investment and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.
4.5. Securities Not Registered. Such Purchaser understands that the
Securities have not been registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that the Securities must continue to be
held by such Purchaser unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration. Such Purchaser
understands that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act depend
on the satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts.
4.6. No Conflict. The execution and delivery of this Agreement by such
Purchaser and the consummation of the transactions contemplated hereby will not
conflict with or result in any violation of or default by such Purchaser (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit under (i) any provision of the organizational documents of such
Purchaser or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to
such Purchaser or its respective properties or assets.
4.7. Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
14
4.8. Consents. Except in connection with the HSR Act, all consents,
approvals, orders and authorizations required on the part of such Purchaser in
connection with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated herein have been obtained and will
be effective as of the Initial Closing Date.
4.9. No Manipulation of Stock. The Purchasers have not taken, in
violation of applicable law, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the transactions contemplated hereby or the sale or
resale of the shares of Common Stock.
5. Covenants.
---------
5.1. HSR Act Filings. The Company and each Purchaser shall file with
the proper authorities all forms and other documents necessary to be filed
pursuant to the HSR Act, and the regulations promulgated thereunder, as promptly
as possible and shall cooperate with the each other in promptly producing such
additional information as those authorities may reasonably require to allow
early termination of the notice period provided by the HSR Act or as otherwise
necessary to comply with statutory requirements of the Federal Trade Commission
or the Department of Justice. The Company and each Purchaser shall pay the
filing fee associated with its respective filing of the HSR Act notification.
5.2. Other Governmental Approvals. As soon as practicable after the
execution of this Agreement, the Company and each Purchaser shall file all
applications and reports and take such other action (in addition to filings
required under the HSR Act) which is reasonably required to be taken or filed
with any governmental authority in connection with the transactions contemplated
by this Agreement. The Company and each Purchaser shall give all additional
notices to third parties and take other action reasonably required to be or
taken by it under any authorization, lease, note, mortgage, indenture, agreement
or other instrument or any law, rule, regulation, demand or court or
administrative order in connection with the transactions contemplated by this
Agreement.
5.3. Further Assurances. Each party agrees to cooperate with each
other and their respective officers, employees, attorneys, accountants and other
agents, and, generally, do such other acts and things in good faith as may be
reasonable or appropriate to timely effectuate the intents and purposes of this
Agreement and the consummation of the transactions contemplated hereby,
including, but not limited to, taking any action to facilitate the filing any
document or the taking of any action to assist the other parties hereto in
complying with the terms of Sections 5.1 and 5.2 hereof.
5.4. Board Designee; Board Observer.
------------------------------
(a) As provided in Section 9(e) of the Certificate of Designation,
Warburg shall be able to appoint one director (the "Board Designee") to the
Board of Directors. Notwithstanding anything to the contrary in Section 9(e) of
the Certificate of Designation, if the NASD, Inc. approves the Board Designee's
appointment to the Board of Directors prior to the
15
Special Meeting, then Warburg shall have the right to appoint the Board Designee
to the Board of Directors at such time.
(b) In addition to the Board Designee, Warburg shall have the right to
have one observer (the "Board Observer") attend meetings of the Board of
Directors immediately upon the Initial Closing and for so long as Warburg has
the right to designate the Board Designee pursuant to Section 9(e) of the
Certificate of Designation.
(c) Warburg hereby designates ▇▇▇▇▇ ▇▇▇▇▇▇▇ as the initial Board
Designee to commence his term in accordance with Section 9(e) of the Certificate
of Designation and Section 5.4(a) hereof.
(d) For so long as Warburg has the right to designate the Board
Designee pursuant to Section 9(e) of the Certificate of Designation, the Board
Designee and the Board Observer shall each receive a copy of all materials
distributed to the Board of Directors, whether provided to directors in advance
of, during or after any meeting of the applicable Board of Directors, regardless
of whether the Board Designee or the Board Observer shall be in attendance at
any such meeting, provided, however; that the Company has the right to withhold
any information from the Board Observer and to exclude the Board Observer from
any meeting or portion thereof if access to such information or attendance at
such meeting could:
(i) in the reasonable judgment of the Company's outside counsel,
adversely affect the attorney-client privilege between the Company and its
counsel;
(ii) cause the Board of Directors to breach its fiduciary duties; or
(iii) result in a conflict between the interests of the Company, on
the one hand, and those of the Board Observer or any of its affiliates, on the
other hand.
The Company will use its reasonable best efforts to ensure that any withholding
of information or any restriction on attendance is strictly limited only to the
extent necessary set forth in the preceding sentence.
(e) The Board Designee and the Board Observers shall be reimbursed for
out-of-pocket expenses incurred in connection with participation as a member or
observer, as the case may be, of the Board of Directors in a manner consistent
with the Company's policies for reimbursing other outside members of the Board
of Directors. In addition, the Board Designee shall be entitled to the same
compensation paid to other outside members of the Board of Directors in his or
her capacity as a director, which compensation shall be assignable to Warburg.
5.5. Covenant Pending Each Closing. Between the date of this Agreement
and the date of each Closing, the Company will promptly advise each Purchaser of
any action or event of which it becomes aware which has the effect of making
incorrect, in any material respect, any of the Company's representations or
warranties or which has the effect of rendering any of the Company's covenants
incapable of performance.
16
5.6. Proxy Statement. The Company shall use its reasonable best
efforts to prepare and file with the SEC, as promptly as practicable after the
date hereof but in no event later than 30 days after the Initial Closing,
preliminary proxy materials with respect to a meeting of the stockholders for
the purpose of approving the issuance of shares of Preferred Stock upon
conversion of the Notes in accordance with the terms of the Notes and the
issuance of the Warrants to be issued at the Second Closing as contemplated by
this Agreement. Thereafter, the Company shall as promptly as possible file with
the SEC the definitive proxy statement and acting through its Board of
Directors, (i) call a Special Meeting to be held at the earliest practicable
date but in no event later than 45 days after the earlier of (x) receiving
notification that the SEC is not reviewing the preliminary proxy materials and
(y) the conclusion of any SEC review of the preliminary proxy materials, for the
sole purpose of voting upon the approval of the issuance of shares of Preferred
Stock upon conversion of the Notes in accordance with the terms of the Notes and
the issuance of the Warrants to be issued at the Second Closing as contemplated
by this Agreement and (ii) include in the proxy statement the recommendation of
its Board of Directors that holders of the Common Stock approve such issuances
referred to in clause (i) above; provided, however, that the Board of Directors
may withdraw or adversely modify their recommendation of the issuances referred
to in clause (i) above if the Board of Directors determines in good faith (after
consultation with its financial advisors and legal counsel) that from a
financial point of view to the stockholders of the Company, based solely on
facts or conditions arising after the date hereof, that the issuances referred
to in clause (i) above are not in the best interests of the Company's
stockholders. In the event that the Board of Directors withdraws or adversely
modifies its recommendation of the issuances referred to in clause (i) above,
the Company will pay to the Purchasers (based on their pro rata percentage of
the aggregate Purchase Price) in immediately available funds an amount in cash
as liquidated damages equal to five percent (5%) of the aggregate principal
amount of the Notes issued hereunder, payable within two (2) business days of
such withdrawal or modification. Neither prior to nor at the Special Meeting
shall the Company put forth any matter, other than those matters relating to
transactions expressly contemplated by this Agreement, to the holders of Common
Stock for their approval without the prior written consent of Warburg.
5.7. Subscription Right.
------------------
(a) If at any time after the date hereof, and for so long as a
Purchaser Beneficially Owns (as defined in the Certificate of Designation) at
least twenty-five percent (25%) of the shares of Common Stock issuable to such
Purchaser pursuant to this Agreement (including upon conversion of the Shares
and exercise of the Warrants), the Company proposes to issue equity securities
of any kind (the term "equity securities" shall include for these purposes any
warrants, options or other rights to acquire equity securities and debt
securities convertible into equity securities) of the Company, other than (i)
shares of Common Stock issuable upon conversion of the Shares or exercise of the
Warrants, (ii) shares of Preferred Stock issuable upon conversion of the Notes,
(iii) the Warrants to be issued at the Second Closing, (iv) shares of Common
Stock issued to the public in a firm commitment underwriting pursuant to a
registration statement filed under the Securities Act with anticipated gross
proceeds to the Company of at least $20 million, (v) shares of Common Stock
issued in connection with bona fide acquisitions, mergers, joint venture or
similar transactions, the terms of which are approved by the Board of Directors,
(vi) shares of Common Stock issued pursuant to any stock option, stock purchase
or similar plan or arrangement for the benefit of the employees of the Company
17
or its subsidiaries, duly adopted by the Board of Directors, or (vii) pursuant
to the terms of this Agreement, then, as to each Purchaser, the Company shall:
(i) give written notice to such Purchaser (no less than ten (10)
business days prior to the closing of such issuance) setting forth in reasonable
detail (A) the designation and all of the terms and provisions of the securities
proposed to be issued (the "Proposed Securities"), including, where applicable,
the voting powers, preferences and relative participating, optional or other
special rights, and the qualification, limitations or restrictions thereof and
interest rate and maturity; (B) the price and other terms of the proposed sale
of such securities; (C) the amount of such securities proposed to be issued; and
(D) such other information as such Purchaser may reasonably request in order to
evaluate the proposed issuance; and
(ii) offer to issue and sell to such Purchaser, on such terms as the
Proposed Securities are issued and upon full payment by such Purchaser, a
portion of the Proposed Securities equal to a percentage determined by dividing
(A) the number of shares of Common Stock beneficially owned such Purchaser
(within the meaning of Rule 13d-3 under the Exchange Act) by (B) the total
number of shares of Common Stock then outstanding, including for purposes of
this calculation all shares of Common Stock issuable upon conversion or exercise
in full of any convertible or exercisable securities (other than employee stock
options) then outstanding.
(b) Each Purchaser must exercise its purchase rights hereunder within
ten (10) business days after receipt of such notice from the Company. To the
extent that the Company offers two or more securities in units, each Purchaser
must purchase such units as a whole and will not be given the opportunity to
purchase only one of the securities making up such unit. The closing of the
exercise of such subscription right shall take place simultaneously with the
closing of the sale of the Proposed Securities giving rise to such subscription
right.
(c) Upon the expiration of the 10-day offering period described above,
the Company will be free to sell such Proposed Securities that the Purchasers
have not elected to purchase during the ninety (90) days following such
expiration on terms and conditions no more favorable to the purchasers thereof
than those offered to such holders. Any Proposed Securities offered or sold by
the Company after such 90 day period must be reoffered to the Purchasers
pursuant to this Section 5.7.
(d) The election by any Purchaser not to exercise its subscription
rights under this Section 5.7 in any one instance shall not affect its right
(other than in respect of a reduction in its percentage holdings) as to any
subsequent proposed issuance. Any sale of such securities by the Company without
first giving each Purchaser the rights described in this Section 5.7 shall be
void and of no force and effect.
5.8. Standstill. For as long as the Purchasers and each subsidiary or
other controlled affiliate of the Purchasers (the "Purchaser Group")
collectively Beneficially Own (as defined in the Certificate of Designation)
twenty-five percent (25%) or more of the shares of the Common Stock issuable to
them pursuant to this Agreement (including upon conversion of shares of Series A
Preferred Stock and exercise of the Warrants), no member of the Purchaser
18
Group shall, without the prior written consent of a majority of the members of
the Board of Directors who are not affiliated with the Purchaser Group:
(a) acquire, seek to acquire, propose, offer or agree to acquire,
directly or indirectly, by purchase or otherwise, any shares of Common Stock (or
options or warrants to acquire, or securities convertible into or exchangeable
for, shares of Common Stock) if, as a result of such acquisition, the Purchaser
Group would in the aggregate Beneficially Own, or, with the passage of time,
would have the right to Beneficially Own, more than 40% of the then-outstanding
shares of Common Stock;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission), or seek to advise or influence any person
or entity with respect to the voting of any voting securities of the Company;
(c) make any public announcement with respect to any transaction or
proposed or contemplated transaction between the Company or any of its security
holders and Purchaser Group, including, without limitation, any tender or
exchange offer, merger or other business combination or acquisition of a
material portion of the assets of the Company;
(d) except as otherwise permitted by Section 5.8(a), enter into or
agree, offer, propose or seek to enter into, or otherwise be involved in or part
of, directly or indirectly, any acquisition transaction or other business
combination relating to all or any part of the Company or its subsidiaries or
any acquisition transaction for all or part of the assets of the Company or any
subsidiary of the Company or any of their respective businesses;
(e) except among any Purchaser and it subsidiaries and/or controlled
affiliates, form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting
securities of the Company or any of its subsidiaries;
(f) seek or propose, alone or in concert with others, to influence or
control the Company's management policies, other than when voting as a
stockholder on matters submitted to the Company's stockholders generally, except
as contemplated by Section 5.9;
(g) except as otherwise permitted by Section 5.8(a), directly or
indirectly enter into any discussions, negotiations, arrangements or
understandings with any other person with respect to any of the foregoing
activities or propose any of such activities to any other person; or
(h) disclose any intention, plan or arrangement inconsistent with any
of the foregoing.
5.9. Agreement to Vote. At or with respect to any election of one or
more directors (including to fill any vacancy on the Board of Directors), for so
long as the Purchasers are subject to Section 5.8, each Purchaser shall vote all
of its shares of Common Stock and/or Series A Preferred Stock in favor of the
election of any nominee to the Board of Directors whose nomination was approved
by the unanimous consent of the Board of Directors, other than the Warburg
Designee.
19
5.10. Agreement Not to Vote. In the event a Purchaser exercises a
Warrant prior to earlier of (i) the Special Meeting or (ii) December 31, 2002,
such Purchaser agrees that (a) it shall not vote any shares of Common Stock
received upon exercise of such Warrant at any time prior to or at the Special
Meeting and (b) prior to or at the Special Meeting, such shares of Common Stock
shall not be counted for determining the existence of a quorum at any meeting of
the Company's stockholders, unless in either case the Company receives
confirmation from the NASD, Inc. (which confirmation shall be reasonably
satisfactory to the Company) that such Purchaser shall be permitted to vote such
shares of Common Stock or that such shares of Common Stock may be counted for
determining the existence of a quorum at a meeting of the Company's
stockholders. The Purchasers agree not to transfer the Warrants or shares of
Common Stock issuable upon exercise thereof to any transferee that does not
agree in writing with the Company to be bound by the provisions of this Section
5.10.
6. Conditions Precedent.
--------------------
6.1. Conditions to the Obligation of the Purchasers to Consummate the
Initial Closing. The several obligations of each Purchaser to consummate the
transactions to be consummated at the Initial Closing, and to purchase and pay
for the Shares, Notes and Warrants being purchased by it at such Closing
pursuant to this Agreement, are subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties contained herein of the Company
shall be true and correct on and as of the Initial Closing Date with the same
force and effect as though made on and as of the Initial Closing Date (it being
understood and agreed by each Purchaser that for purposes of this Section
6.1(a), in the case of any representation and warranty of the Company contained
herein (i) which is qualified by application thereto by a Material Adverse
Effect standard, such representation and warranty need be true and correct by
application thereto only of a Material Adverse Change standard, (ii) which is
not hereinabove qualified by application thereto of a materiality standard, such
representation and warranty need be true and correct only in all material
respects or (iii) which is made as of a specific date, such representation and
warranty need be true and correct only as of such specific date).
(b) The Company shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by the
Company on or prior to the Initial Closing Date.
(c) Each Purchaser shall have received a certificate, dated the
Initial Closing Date, signed by each of the President and the Chief Financial
Officer of the Company, certifying on behalf of the Company that the conditions
specified in the foregoing Sections 6.1(a) and (b) have been fulfilled.
(d) The purchase of and payment for the Shares, the Notes or the
Warrants by each Purchaser shall not be prohibited or enjoined by any law or
governmental or court order or regulation.
(e) Each Purchaser shall have received from the Company's counsel,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, an opinion in form and substance reasonably
satisfactory to the Purchasers.
20
(f) The Certificate of Designation shall have been filed by the
Company with the Secretary of State of the State of Delaware, and satisfactory
evidence of such filing shall have been delivered to the Purchasers.
(g) There shall not have been any Material Adverse Change.
(h) All corporate and other proceedings to be taken by the Company in
connection with the transactions contemplated hereby and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Purchasers
and the Purchasers shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
(i) All consents and waivers identified on Schedule 6.1(i) of the
Disclosure Schedule shall have been obtained.
(j) The approval of the NASD, Inc. with respect to the transactions
contemplated hereby shall have been obtained.
(k) The Company shall have entered into the Orinoco Agreement pursuant
to which the Company will consummate the Acquisition and all conditions to
closing of the Acquisition shall have been satisfied or waived by the Company
with the prior written consent of Warburg.
(l) The Company and each of Ripplewood Partners, L.P., Ripplewood
Employee Co-Investment Fund, L.P. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and any other Person
controlled by any of foregoing parties that beneficially owns any shares of
Common Stock, shall have executed and delivered a counterpart signature page to
the Voting Agreement, substantially in the form of EXHIBIT E hereto.
(m) The waiting period under the HSR Act shall have expired or notice
of early termination of the waiting period shall have been received by the
Company and the Purchasers.
6.2. Conditions to the Obligation of the Company to Consummate the
Initial Closing. The obligation of the Company to consummate the transactions to
be consummated at the Initial Closing, and to issue and sell to each Purchaser
the Shares, Notes or Warrants to be purchased by it at the Initial Closing
pursuant to this Agreement, is subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties contained herein of such
Purchaser shall be true and correct on and as of the Initial Closing Date, with
the same force and effect as though made on and as of Initial Closing Date (it
being understood and agreed by the Company that, in the case of any
representation and warranty of such Purchaser contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation and warranty need be true and correct only in all material
respects).
21
(b) Such Purchaser shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by such
Purchaser on or prior to the Initial Closing Date.
(c) The sale of the Shares, Notes and Warrants by the Company shall
not be prohibited or enjoined by any law or governmental or court order or
regulation.
(d) The Certificate of Designation shall have been filed by the
Company with the Secretary of State of the State of Delaware.
(e) The waiting period under the HSR Act shall have expired or notice
of early termination of the waiting period shall have been received by the
Company and the Purchasers.
(f) The Company shall have entered into the Orinoco Agreement pursuant
to which the Company will consummate the Acquisition and all conditions to
closing of the Acquisition shall have been satisfied or waived by the Company
with the prior written consent of Warburg.
Each Purchaser's obligations under this Section 6.2 shall be several
and independent from the obligations of each other Purchaser; and the failure by
any Purchaser to fulfill or comply with any of the conditions set forth in this
Section 6.2 shall not affect the obligations of the Company to any other
Purchaser to consummate the transactions contemplated by this Agreement.
6.3. Conditions Precedent to the Second Closing. The Second Closing
shall be subject to the condition precedent that the Company's stockholders
shall have approved the issuance of shares of Preferred Stock issuable upon
conversion of the Notes in accordance with the terms of the Notes and the
issuance of the Warrants to be issued at the Second Closing pursuant to the
terms of this Agreement.
7. Registration of the Securities; Compliance with the Securities Act.
------------------------------------------------------------------
7.1. Securities Law Transfer Restrictions. No Purchaser shall sell,
assign, pledge, transfer or otherwise dispose or encumber any of the Securities
being purchased by it hereunder, except (i) pursuant to an effective
registration statement under the Securities Act or (ii) pursuant to an available
exemption from registration under the Securities Act and applicable state
securities laws and, if requested by the Company, upon delivery by such
Purchaser of an opinion of counsel reasonably satisfactory to the Company to the
effect that the proposed transfer is exempt from registration under the
Securities Act and applicable state securities laws. The Company shall not
register any transfer of the Securities in violation of this Section 7.1. The
Company may, and may instruct any transfer agent for the Company to, place such
stop transfer orders as may be required on the transfer books of the Company in
order to ensure compliance with the provisions of this Section 7.1.
Notwithstanding the foregoing, the Notes shall not be transferable without the
prior written consent of the Company, except for transfers to Affiliates of the
Purchasers that agree not to further transfer the Notes.
22
7.2. Legends. Each certificate representing any of the Securities
shall be endorsed with the legend set forth below, and each Purchaser covenants
that, except to the extent such restrictions are waived by the Company, it shall
not transfer the shares represented by any such certificate without complying
with the restrictions on transfer described in this Agreement and the legends
endorsed on such certificate:
"THE SECURITIES REPRESENTED BY THIS [CERTIFICATE] [NOTE] [WARRANT] [AND THE
SECURITIES ISSUABLE UPON ITS CONVERSION] HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR SECURITIES LAWS OF ANY STATE
AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT OR SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON
DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS."
7.3. Registration Procedures and Other Matters. The Company shall:
-----------------------------------------
(a) subject to receipt of necessary information from each Purchaser
for inclusion in such filing, prepare and file with the SEC, within 180 days
after the Initial Closing, a registration statement on Form S-3 (the
"Registration Statement") covering the Securities held by each Purchaser, or the
Holders (defined in Section 7.4 below), from time to time, in compliance with
the Securities Act;
(b) use its reasonable best efforts to cause the Registration
Statement to become effective as promptly as practicable after filing, such
efforts to include, without limiting the generality of the foregoing, preparing
and filing with the SEC any financial statements that are required to be filed
prior to the effectiveness of such Registration Statement;
(c) use its reasonable best efforts to prepare and file with the SEC
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith (the "Prospectus") as may be necessary to keep the
Registration Statement continuously effective and free from any material
misstatement or omission to state a material fact for a period not exceeding,
with respect to each Holder's Securities, the earlier of (i) the date on which
each Holder may sell all Securities then held by such Holder without restriction
by the volume limitations of Rule 144(e) of the Securities Act or (ii) such time
as all Securities purchased by such Holder have been sold pursuant to a
registration statement or are otherwise freely tradeable;
(d) furnish to each Holder with respect to the Securities registered
under the Registration Statement such 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 Holder may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Securities by such Holder; provided, however, that the
obligation of the Company to deliver copies of Prospectuses or Preliminary
Prospectuses to such
23
Holder shall be subject to the receipt by the Company of reasonable assurances
from such Holder that such Holder will comply with the applicable provisions of
the Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such Prospectuses or Preliminary
Prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by each Holder and use its reasonable
best efforts to maintain such blue sky qualifications during the period the
Company is required to maintain the effectiveness of the Registration Statement
pursuant to Section 7.3(c); 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;
(f) bear all expenses in connection with the procedures in this
Section 7.3 and the registration of the Securities pursuant to the Registration
Statement (provided that the Holders shall bear the cost of all underwriting
discounts and selling commissions and similar fees applicable to the sale of
Securities and all fees and expenses of legal counsel for any Holder and all
transfer taxes);
(g) advise each Holder promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued; and
(h) use its reasonable best efforts to cause the Common Stock
underlying the Shares and the Warrants to be listed on the Nasdaq National
Market in connection with the filing of the Registration Statement.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Securities.
7.4. Transfer of Securities; Suspension.
----------------------------------
(a) Each Purchaser agrees that in case of any disposition of its
Securities not made pursuant to the Registration Statement to (i) a third party
who agrees to be bound by the provisions of this Section 7 and makes the
representations to the Company contained in Section 4 hereof or (ii) its
partners as part of a distribution of all or part of the Securities (in each
case the "Transferee", and together with the Purchasers, the "Holders"), such
Purchaser will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Holders or their plans of
distribution. The Company agrees, in case of such sale, transfer or distribution
(to the extent made in accordance with Section 7.1), to promptly file one or
more post-effective amendments to the Registration Statement or a supplement to
the related Prospectus, naming each Transferee as a Selling Shareholder in
accordance with the provisions of the Securities Act.
(b) Except in the event that paragraph (c) below applies, the Company
shall (i) prepare and file from time to time with the SEC a post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or a supplement or amendment
24
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to the purchasers of Securities being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) provide each Holder copies of any documents
filed pursuant to Section 7.4(b)(i); and (iii) inform each Holder that the
Company has complied with its obligations in Section 7.4(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has not yet been declared effective, the Company will notify each Holder to that
effect, will use its reasonable best efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify each
Holder pursuant to Section 7.4(b)(i) hereof when the amendment has become
effective).
(c) Subject to paragraph (d) below, in the event (i) of 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) of 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) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) of any event or circumstance which, upon the advice of its
counsel, 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; or (v) the Company determines in good faith that offers and sales
pursuant to the Registration Statement should not be made by reason of the
presence of material undisclosed circumstances or developments with respect to
which the disclosure that would be required in such a Registration Statement or
related Prospectus is premature, would have an adverse effect on the Company or
is otherwise inadvisable, then the Company shall deliver a certificate in
writing to each Holder (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, such Holder will refrain from
selling any Securities pursuant to the Registration Statement (a "Suspension")
until such Holder'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 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 reasonably practicable after the delivery of
a Suspension Notice to each Holder. In addition to and without limiting any
other remedies (including, without limitation, at
25
law or at equity) available to such Holder, such Holder shall be entitled to
specific performance in the event that the Company fails to comply with the
provisions of this Section 7.4(c).
(d) Notwithstanding the foregoing paragraphs of this Section 7.4, no
Holder shall be prohibited from selling Securities under the Registration
Statement as a result of Suspensions on more than three occasions of not more
than 30 days each in any twelve month period unless, in the good faith judgment
of the Board of Directors, upon the written opinion of counsel, the sale of
Securities under the Registration Statement in reliance on this paragraph 7.4(d)
would be reasonably likely to cause a violation of the Securities Act or the
Exchange Act and result in liability to the Company.
(e) Provided that a Suspension is not then in effect, each Holder may
sell Securities under the Registration Statement, provided that it arranges for
delivery of a current Prospectus to the transferee of such Securities. Upon
receipt of a request therefor, the Company will provide an adequate number of
current Prospectuses to such Holder and to supply copies to any other parties
requiring such Prospectuses.
(f) Each Holder acknowledges and agrees that the Securities sold
pursuant to the Registration Statement are not transferable on the books of the
Company unless the stock certificate submitted to the transfer agent evidencing
such Securities is accompanied by a certificate reasonably satisfactory to the
Company to the effect that (i) the Securities have been sold in accordance with
such Registration Statement and (ii) the requirement of delivering a current
prospectus has been satisfied.
(g) In the event of a sale of Securities by any Holder pursuant to the
Registration Statement, such Holder shall deliver to the Company's transfer
agent an appropriate notification of the sale, so that the Securities may be
properly transferred.
7.5. Company Registration.
--------------------
(a) If the Company shall determine to register any of its equity
securities either for its own account or for the account of other stockholders
at any time prior to the effectiveness of the Registration Statement, other than
(i) a registration relating solely to employee benefit plans, (ii) a
registration relating solely to a SEC Rule 145 transaction or (iii) a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Securities, the
Company will:
(i) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
(ii) if so requested by the Holders of at least 51% or more of the
Securities (on an as-converted, as exercised basis), include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Securities
specified in a written request or requests made by the Holders within fifteen
(15) days after receipt of the written notice from the Company described in
clause (i) above, except as set forth in Section 7.5(b) below. Such written
request may specify all or a part of the Holders'
26
Securities. In the event any Holder requests inclusion in a registration
pursuant to this Section 7.5 in connection with a distribution of Securities to
its partners, the registration shall provide for the resale by such partners, if
requested by such Holder.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 7.5(a)(i). In such event, the right of each of the
Holders to registration pursuant to this Section 7.5 shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall (together
with the Company and the other stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
underwriting by the Company. Notwithstanding any other provision of this Section
7.5, if the representative determines that marketing factors require a
limitation on the number of shares to be underwritten, the representative may
limit the number of Securities to be included in the registration and
underwriting. The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated in the
following manner: The securities, including the Securities, of the Company held
by stockholders of the Company (other than securities held by holders who by
contractual right demanded such registration and securities to be offered by the
Company) shall be excluded from such registration and underwriting to the extent
required by such limitation, and, if a limitation on the number of shares
permits additional shares to be included in the registration and underwriting,
each of the Holders and other holders requesting to have their shares included
in such registration will have the right to include such shares in such
registration (allocated pro rata among such Holders and holders on the basis of
the relative number of shares requested to be registered by such Holders and
holders up to the permitted amount). If any of the Holders or any officer,
director or other stockholder disapproves of the terms of any such underwriting,
he may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. Notwithstanding the
foregoing, if at any time after giving written notice referred to above, and
prior to the effective date of the applicable registration statement filed in
connection therewith, the Company determines for any reason not to proceed with
the proposed registration statement, the Company may, at its election, give
written notice of such determination to the Holders that have elected to have
their Securities included in such registration and thereupon will be relieved of
its obligations to register such Securities in connection with such
registration.
7.6. Indemnification.
---------------
(a) For the purpose of this Section 7.6:
(i) the term "Selling Stockholder" shall include each Holder and any
Affiliate of such Holder; and
(ii) the term "Registration Statement" shall include the Prospectus in
the form first filed with the SEC pursuant to Rule 424(b) of the Securities Act
or filed as part of the
27
Registration Statement at the time of effectiveness if no Rule 424(b) filing is
required, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1.
(b) The Company agrees to indemnify and hold harmless each Selling
Stockholder and its officers, directors, partners, employees and agents and each
underwriter of Securities, if any, and each person who controls any such
underwriter from and against any losses, claims, damages or liabilities to which
such Person may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) any untrue statement of a
material fact contained in the Registration Statement as amended at the time of
effectiveness or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (ii) any failure
by the Company to fulfill any undertaking included in the Registration Statement
as amended at the time of effectiveness, and the Company will reimburse such
Selling Stockholder for any reasonable legal or other out-of-pocket expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, or preparing to defend any such action, proceeding
or claim, provided, however, that the Company shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises out of, or
is based upon, an untrue statement made in such Registration Statement or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Selling
Stockholder specifically for use in preparation of the Registration Statement or
the failure of such Selling Stockholder to comply with its covenants and
agreements contained in Section 7.4 hereof respecting sale of the Securities or
any statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Selling Stockholder prior to the pertinent
sale or sales by the Selling Stockholder. The Company shall reimburse each
Selling Stockholder for the amounts provided for herein on demand as such
expenses are incurred.
(c) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless the Company (and each Person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each of its officers, directors, employees and agents from
and against any losses, claims, damages or liabilities to which the Company (or
any such officer, director, employee, agent or controlling person) may become
subject (under the Securities Act or otherwise), insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, (i) any failure by a Selling Stockholder to comply with
the covenants and agreements contained in Section 7.4 hereof respecting the sale
of the Securities, or (ii) any untrue statement of a material fact contained in
the Registration Statement or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading if and
to the extent that such untrue statement or omission was made in reliance upon
and in conformity with written information furnished by or on behalf of any
Selling Stockholder specifically for use in preparation of the Registration
Statement, and each Selling Stockholder, severally and not jointly, will
reimburse the Company (or such officer, director, employee, agent or controlling
person), as the case may be, for any legal or other out-of-pocket expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the obligation of each
Selling Stockholder to
28
indemnify the Company (or such officer, director, employee, agent or controlling
person) shall be limited to the net amount received by such Selling Stockholder
from the sale of its Securities.
(d) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.6, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying person will not relieve it from any liability which it may have to
any indemnified person under this Section 7.6 (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Section 7.6.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
further, however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided,
however, that such consent shall not be unreasonably withheld. No indemnifying
person shall, without the prior written consent of the indemnified person,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified person is or could have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such
settlement includes an unconditional release of such indemnified person from all
liability on claims that are the subject matter of such proceeding.
(e) If the indemnification provided for in this Section 7.6 is
unavailable to or insufficient to hold harmless an indemnified person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying person shall contribute to the amount paid or payable by
such indemnified person as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and any Purchaser,
as well as any other Selling Shareholders under such registration statement on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or any Purchaser or other Selling Shareholder on
the other and the parties' relative intent, knowledge, access to information and
29
opportunity to correct or prevent such untrue statement. The Company and each
Purchaser agree that it would not be just and equitable if contribution pursuant
to this subsection (e) were determined by pro rata allocation (even if the
Purchasers and other Selling Shareholders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified person in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Selling Stockholder shall be required to contribute any
amount in excess of the amount by which the net amount received by such Selling
Stockholder from the sale of the Securities to which such loss relates exceeds
the amount of any damages which such Selling Stockholder has otherwise been
required to pay by reason of such untrue statement (except in the event of fraud
by such Selling Stockholder). 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 Selling Stockholder's obligations in this subsection to
contribute shall be in proportion to the respective sale of Securities of such
Selling Stockholder and shall not be joint with any other Selling Shareholders.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7.6, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.6
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act. The parties are advised that federal or state public policy as interpreted
by the courts in certain jurisdictions may be contrary to certain of the
provisions of this Section 7.6, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy as a defense to
a claim under this Section 7.6 and further agree not to attempt to assert any
such defense.
7.7. Termination of Conditions and Obligations. The conditions
precedent imposed by this Section 7 upon the transferability of the Securities
shall cease and terminate as to any particular number of the Securities when
such Securities shall have been effectively registered under the Securities Act
and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Securities or
at such time as an opinion of counsel reasonably satisfactory to the Company
shall have been rendered to the effect that such conditions are not necessary in
order to comply with the Securities Act.
7.8. Information Available. So long as the Registration Statement is
effective covering the resale of Securities owned by each Holder, the Company
will furnish to each Holder, upon the reasonable request of such Holder, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses; and upon the reasonable request of any Purchaser,
the President or the Chief Financial Officer of the Company (or an appropriate
designee thereof) will meet with such Purchaser or a representative thereof at
the Company's headquarters to discuss all information relevant for disclosure in
the Registration
30
Statement covering the Securities and will otherwise cooperate with any Holder's
conducting an investigation for the purpose of reducing or eliminating such
Holder exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters; provided, that the
Company shall not be required to disclose any confidential information to any
holder or meet at its headquarters with any Purchaser until and unless such
Holder or Purchaser shall have entered into a confidentiality agreement in form
and substance reasonably satisfactory to the Company with the Company with
respect thereto.
7.9. Delay of Registration. The Holders shall have no right to take
any action to restrain, enjoin or otherwise delay any registration pursuant to
this Section 7 as a result of any controversy that may arise with respect to the
interpretation or implementation of this Agreement.
8. Termination.
-----------
8.1. Conditions of Termination. Notwithstanding anything to the
contrary contained herein, this Agreement may be terminated at any time before
the Initial Closing (a) by mutual consent of the Company and the Purchasers, or
(b) by either party hereto if the Initial Closing shall not have occurred on or
prior to December 31, 2002.
8.2. Effect of Termination. In the event of termination pursuant to
Section 8.1 hereof, this Agreement shall become null and void and have no
effect, with no liability on the part of the Company or the Purchasers, or their
directors, officers, agents or stockholders, with respect to this Agreement,
except for the (i) liability of a party for expenses pursuant to Section 9.9
hereof and (ii) liability for any breach of this Agreement.
9. Miscellaneous Provisions.
------------------------
9.1. Public Statements or Releases. Neither the Company nor any
Purchaser shall make any public announcement with respect to the existence or
terms of this Agreement or the transactions provided for herein without the
prior approval of the other parties, which shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, nothing in this Section 9.1 shall
prevent any party from making any public announcement it considers necessary in
order to satisfy its obligations under the law or the rules of any national
securities exchange, provided such party, to the extent practicable, provides
the other parties with an opportunity to review and comment on any proposed
public announcement before it is made.
9.2. Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
9.3. Pronouns. All pronouns or any variation thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
31
9.4. Notices.
-------
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by postage prepaid first class mail, courier or
facsimile or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice shall
be the date of its actual receipt.
(b) All correspondence to the Company shall be addressed as follows:
Proxim Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) All correspondence to any Purchaser shall be sent to such
Purchaser at the address set forth in EXHIBIT A.
(d) Any Person may change the address to which correspondence to it is
to be addressed by notification as provided for herein.
9.5. Captions. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.
9.6. Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
9.7. Governing Law; Injunctive Relief.
--------------------------------
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) Each of the parties hereto acknowledges and agrees that damages
will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of New York, equitable relief
of a kind appropriate in light of the nature of the ongoing or threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief; provided, however, that if the party bringing
such action is unsuccessful in obtaining the relief sought, the moving party
shall pay the non-moving party's reasonable costs, including attorney's fees,
32
incurred in connection with defending such action. Such remedies shall not be
the parties' exclusive remedies, but shall be in addition to all other remedies
provided in this Agreement.
9.8. Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
9.9. Expenses. The Company shall pay the documented fees and expenses
incurred by Warburg in connection with the transactions contemplated hereby
including, without limitation, legal, consulting and accounting fees
("Transaction Fees"); provided, however, that the Company shall not be obligated
to pay Transaction Fees in excess of $250,000. Payments due pursuant to this
Section 9.9 will be made at the Initial Closing, in the event the Initial
Closing occurs, or if the Initial Closing does not occur then upon termination
of this Agreement, and in any event, any remaining payments will be made not
later than 30 days after a ▇▇▇▇ for such fees and expenses has been sent by
Warburg to the Company.
9.10. Assignment. The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party. None of the parties may assign
its rights or obligations under this Agreement or designate another person (i)
to perform all or part of its obligations under this Agreement or (ii) to have
all or part of its rights and benefits under this Agreement, in each case
without the prior written consent of the other parties, provided, however, that
Warburg shall have the right to assign and transfer all or a portion of its
rights and obligations under this Agreement to one or more of its Affiliates. In
the event of any assignment in accordance with the terms of this Agreement, the
assignee shall specifically assume and be bound by the provisions of the
Agreement by executing and agreeing to an assumption agreement reasonably
acceptable to the Company.
9.11. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument
9.12. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations
and statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the Company and Purchasers beneficially holding in the
aggregate at least a majority of the Shares issued or to be issued pursuant to
this Agreement.
33
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
PROXIM Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------
Name:
Title:
PURCHASERS:
----------
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: WARBURG, ▇▇▇▇▇▇ & CO.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name:
Title:
BROADVIEW CAPITAL PARTNERS L.P.
By: Broadview Capital Partners
Management LLC
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
BROADVIEW CAPITAL PARTNERS QUALIFIED
PURCHASER FUND L.P.
By: Broadview Capital Partners
Management LLC
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
[Signature Page to Securities Purchase Agreement]
EXHIBIT A
PURCHASERS
No. of Shares of
Series A Principal Second Closing
Convertible Amount of Initial Closing Warrant Purchase Price
Purchaser Preferred Stock to Notes to be Warrant Coverage Coverage Payable at the
Name and Address be Purchased Purchased Initial Closing
--------------------------------------------------------------------------------------
Warburg Pincus Private 1,421,334 $29,466,650.00 5,813,890 4,821,275 $65,000,000.00
Equity VIII, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Broadview Capital 26,546 $550,350.00 108,586 90,047 $1,214,000.00
Partners L.P.
Broadview Capital 192,120 $3,983,000.00 785,859 651,688 $8,786,000.00
Partners Qualified
Purchaser Fund L.P.
TOTAL 1,640,000 $34,000,000.00 6,708,335 5,563,010 $75,000,000.00
-----
EXHIBIT B
FORM OF NOTE
(omitted)
EXHIBIT C
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
(omitted)
EXHIBIT D
FORM OF WARRANT
(omitted)
EXHIBIT E
FORM OF VOTING AGREEMENT
PROXIM VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement") is made and entered into as of
June 16, 2002 by and among Proxim Corporation (formerly known as Western
Multiplex Corporation), a Delaware corporation (the "Company") and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, a Stockholder (the "Stockholder") of the Company.
RECITALS
--------
A. The Company, Warburg Pincus Private Equity VIII, L.P. ("Warburg"),
Broadview Capital Partners L.P. and Broadview Capital Partners Qualified
Purchasers Fund L.P. (collectively, "Broadview") have entered into a Securities
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
which provides for (i) the purchase (the "Share Purchase") by Warburg and
Broadview of 1,640,000 Series A Convertible Preferred Shares, par value $.01 per
share, of the Company ("Company Preferred Stock"), (ii) the issuance of warrants
(the "Equity Warrant Issuance") to Warburg and Broadview to purchase 6,708,335
shares Common Stock, par value $.01 per share, of the Company ("Company Common
Stock"), (iii) the issuance by the Company (the "Note Issuance") of Convertible
Notes (the "Convertible Notes") in favor of Warburg and Broadview in the
aggregate principal amount of $34,000,000 and (iv) the issuance of warrants to
purchase 5,563,010 shares of Company Common Stock upon conversion of the
Convertible Note pursuant to its terms (the "Debt Warrant Issuance" and together
with the Share Purchase, the Equity Warrant Issuance and the Note Issuance, the
"Financing").
B. The Stockholder is the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") of such
number of shares of the outstanding Class A common stock of the Company (the
"Company Common Stock") as is set forth on the signature page of this Agreement
(including shares owned of record by Seaview Holdings L.L.C. and The ▇▇▇▇▇ ▇▇
Investment Trust).
C. As an inducement and condition to entering into the Purchase Agreement,
Warburg and Broadview have required that the Stockholder agree, and the
Stockholder has agreed, to enter into this Agreement.
D. In consideration of, among other matters, the execution and delivery of
the Purchase Agreement by Warburg and Broadview, the Stockholder (solely in its
capacity as such) is hereby agreeing to vote, or cause to be voted, the Shares
(as defined below) and other such shares of capital stock of the Company over
which the Stockholder has voting power so as to facilitate the transactions
contemplated by the Purchase Agreement.
E. The Company has provided the Stockholder with a summary of the material
terms of the Financing and related acquisition by the Company (the "Term
Sheet").
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) "Expiration Date" shall mean the earlier to occur of (i) such date
and time as the Purchase Agreement shall have been validly terminated pursuant
thereto, (ii) such date and time that the Stockholders' Meeting is concluded, or
(iii) March 26, 2003.
(b) "Person" shall mean any individual, any corporation, limited
liability company, general or limited partnership, business trust,
unincorporated association or other business organization or entity, or any
governmental body or authority.
(c) "Record Date" shall mean the record date, established pursuant to
the Company's bylaws, relating to the Stockholders Meeting.
(d) "Shares" shall mean: (i) all securities of the Company (including
all shares of Company Common Stock and all options, warrants and other rights to
acquire shares of Company Common Stock) owned by the Stockholder as of the date
of this Agreement, as indicated on the signature page of this Agreement; and
(ii) all additional securities of the Company (including all additional shares
of Company Common Stock and all additional options, warrants and other rights to
acquire shares of Company Common Stock) of which the Stockholder acquires
ownership during the period from the date of this Agreement through the Record
Date, including, without limitation, through the exercise of options, warrants
or other rights to acquire such securities of the Company, or the conversion of
other securities of the Company into such securities of the Company. In the
event of a stock dividend or distribution, or any change in the Shares by reason
of any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged.
(e) "Stockholders' Meeting" shall mean the meeting of Stockholders of
the Company to approve the Financing and the transactions contemplated thereby.
(f) A Person shall be deemed to have effected a "Transfer" of a
security if such Person directly or indirectly: (i) sells, offers to sell, makes
any short sales of, pledges, encumbers, lends, hypothecates, enters into any
type of equity swap or hedging of, grants an option with respect to, transfers
or disposes of such security, any interest therein, or the economic consequences
of ownership of such security or (ii) enters into an agreement, contract or
commitment providing for the sale of, making any short sales of, pledge of,
lending of, encumbrance of, equity swap or hedging of, grant of an option with
respect to, transfer of or disposition of such security, any interest therein or
the economic consequences of ownership of such security, other than any such
actions pursuant to which such Person maintains through the Record Date all
voting rights with respect to such security.
2. Transfer of Shares.
------------------
-2-
(a) Transferee of Shares to be Bound by this Agreement. The
Stockholder hereby agrees that, at all times during the period commencing with
the execution and delivery of this Agreement until the Record Date, the
Stockholder shall not cause or permit any Transfer of any of the Shares (or any
securities convertible into or exercisable or exchangeable for Shares), or any
interest in the foregoing, to be effected.
(b) Transfer of Voting Rights. The Stockholder hereby agrees that, at
all times during the period commencing with the execution and delivery of this
Agreement through the Record Date, the Stockholder shall not deposit (or permit
the deposit of) any Shares in a voting trust or grant any proxy, or enter into
any voting agreement or similar agreement or arrangement in contravention of the
obligations of the Stockholder under this Agreement with respect to any of the
Shares.
(c) Limitation on Registration of Transfer. The Stockholder agrees
with, and covenants to, Warburg and Broadview that the Stockholder shall not
request that the Company register the Transfer of any certificate or
uncertificated interest representing any of the Shares, unless such Transfer is
made in compliance with this Agreement.
3. Agreement to Vote Shares.
------------------------
(a) Agreement to Vote. Until the Expiration Date, at the Stockholders'
Meeting, the Stockholder (solely in its capacity as such) shall cause the Shares
to be voted in favor of approval of the Financing and the transactions expressly
contemplated thereby on substantially the terms set forth in the Term Sheet and
against any matter that is inconsistent with the prompt consummation of the
Financing and the transactions expressly contemplated thereby.
(b) No Other Agreement. Prior to the Expiration Date, the Stockholder
shall not enter into any agreement or understanding with any Person to vote or
give instructions in any manner inconsistent with the terms of this Section 3.
4. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Company, as of the date hereof and at all
times until the Expiration Date (unless indicated otherwise), as follows:
(a) Shares. As of the date hereof, the Stockholder is the beneficial
owner of, and has good and valid title to, the Shares, free and clear of any
liens, claims, options, rights of first refusal, co-sale rights, charges or
other encumbrances. As of the date hereof, the Stockholder does not beneficially
own or have any written or unwritten agreement or arrangement to acquire any
securities of the Company other than the shares of Company Common Stock and
options and warrants to purchase shares of Company Common Stock indicated on the
signature page of this Agreement. The Stockholder has sole voting power, sole
power of disposition, sole power to issue instructions with respect to the
matters set forth in Sections 2 and 3 hereof, sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to all of the
Shares that it owns, with no limitations, qualifications or restrictions on such
rights, subject to applicable federal securities laws and the terms of this
Agreement.
-3-
5. Waiver of Certain Rights. The Stockholder hereby agrees to waive any and
all rights granted to it pursuant to the last four (4) sentences of Section
6.01(h) (beginning with the words "Subject to Section (6.01(d)(iii).....") of
the Amended and Restated Employment and Co-Investment Agreement, dated as of
October 31, 1999, among Ripplewood Partners, L.P., WMC Holding Corp., the
Stockholder and the Company.
6. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
appropriate to consummate the transactions contemplated by this Agreement.
7. Termination. This Agreement shall terminate and shall have no further
force or effect as of the Expiration Date.
8. Miscellaneous.
-------------
(a) Waiver. No waiver by any party hereto of any condition or any
breach of any term or provision set forth in this Agreement shall be effective
unless in writing and signed by each party hereto. The waiver of a condition or
any breach of any term or provision of this Agreement shall not operate as or be
construed to be a waiver of any other previous or subsequent breach of any term
or provision of this Agreement.
(b) Severability. In the event that any term, provision, covenant or
restriction set forth in this Agreement, or the application of any such term,
provision, covenant or restriction to any person, entity or set of
circumstances, shall be determined by a court of competent jurisdiction to be
invalid, unlawful, void or unenforceable to any extent, the remainder of the
terms, provisions, covenants and restrictions set forth in this Agreement, and
the application of such terms, provisions, covenants and restrictions to
persons, entities or circumstances other than those as to which it is determined
to be invalid, unlawful, void or unenforceable, shall remain in full force and
effect, shall not be impaired, invalidated or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by
applicable law.
(c) Binding Effect; Assignment. This Agreement and all of the terms
and provisions hereof shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the Stockholder may be assigned to
any other Person without the prior written consent of the Company.
(d) Amendments. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by each of the parties hereto.
(e) Specific Performance; Injunctive Relief. Each of the parties
hereto hereby acknowledges that (i) the representations, warranties, covenants
and restrictions set forth in this Agreement are necessary, fundamental and
required for the protection of the Company and to
-4-
preserve for the Company the benefits of the Financing; (ii) such covenants
relate to matters which are of a special, unique, and extraordinary character
that gives each such representation, warranty, covenant and restriction a
special, unique, and extraordinary value; and (iii) a breach of any such
representation, warranty, covenant or restriction, or any other term or
provision of this Agreement, will result in irreparable harm and damages to the
Company which cannot be adequately compensated by a monetary award. Accordingly,
the Company and the Stockholder hereby expressly agree that in addition to all
other remedies available at law or in equity, the Company shall be entitled to
the immediate remedy of specific performance, a temporary and/or permanent
restraining order, preliminary injunction, or such other form of injunctive or
equitable relief as may be used by any court of competent jurisdiction to
restrain or enjoin any of the parties hereto from breaching any representations,
warranties, covenants or restrictions set forth in this Agreement, or to
specifically enforce the terms and provisions hereof.
(f) Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of law provision, rule
or principle (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.
(g) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day) of
transmission by telecopy or telefacsimile or (iii) on the date of confirmation
of receipt (or, the first business day following such receipt if the date is not
a business day) if delivered by a nationally recognized courier service. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(i) If to the Company:
Proxim Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention:
Fax:
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-5-
(ii) If to the Stockholder: To the address for notice set forth
on the signature page hereof.
(h) Enforcement; Consent to Jurisdiction; Waiver of Jury Trial.
----------------------------------------------------------
(i) Each of the parties hereto:
(A) consents to submit itself to the personal jurisdiction
of (x) the United States District Court for the District of Delaware in the
event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement to the extent such court would have subject
matter jurisdiction with respect to such dispute and (y) the Chancery or other
Courts of the State of Delaware;
(B) agrees that it will not attempt to deny or defeat such
personal jurisdiction or venue by motion or other request for leave from any
such court;
(C) agrees that it will not bring any action relating to
this Agreement or any of the transactions contemplated by this Agreement in any
court other than such courts;
(D) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to a party at
its address set forth in Section 8(g) or at such other address of which a party
shall have been notified pursuant thereto; and
(E) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
(ii) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING IN RELATION TO THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.
(iii) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(i) Entire Agreement. This Agreement contains the entire understanding
of the parties in respect of the subject matter hereof, and supersede all prior
negotiations and understandings between the parties with respect to such subject
matter.
-6-
(j) Headings. The section headings set forth in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement in any manner.
(k) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
-7-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
PROXIM CORPORATION STOCKHOLDER
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------- ----------------------------
Signature
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------- ----------------------------
Title: President and COO
---------------------------- Print Address:
Proxim Corporation
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(▇▇▇) ▇▇▇-▇▇▇▇
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Telephone Number
(▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile Number
Shares Beneficially Owned:
5,078,222 shares of Company Common Stock
---------
0 shares of Company Common Stock
--------- issuable upon exercise of out-
standing options or warrants
[SIGNATURE PAGE TO PROXIM VOTING AGREEMENT]
-8-
PROXIM VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement") is made and entered into as of
June 16, 2002 by and among Proxim Corporation (formerly known as Western
Multiplex Corporation), a Delaware corporation (the "Company"), Ripplewood
Partners, L.P. and Ripplewood Co-Investment Fund I, L.L.C., each a Stockholder
(collectively, the "Stockholders") of the Company.
RECITALS
--------
A. The Company, Warburg Pincus Private Equity VIII, L.P. ("Warburg"),
Broadview Capital Partners L.P. and Broadview Capital Partners Qualified
Purchasers Fund L.P. (collectively, "Broadview") have entered into a Securities
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
which provides for (i) the purchase (the "Share Purchase") by Warburg and
Broadview of 1,640,000 Series A Convertible Preferred Shares, par value $.01 per
share, of the Company ("Company Preferred Stock"), (ii) the issuance of warrants
(the "Equity Warrant Issuance") to Warburg and Broadview to purchase 6,708,335
shares Common Stock, par value $.01 per share, of the Company ("Company Common
Stock"), (iii) the issuance by the Company (the "Note Issuance") of Convertible
Notes (the "Convertible Notes") in favor of Warburg and Broadview in the
aggregate principal amount of $34,000,000 and (iv) the issuance of warrants to
purchase 5,563,010 shares of Company Common Stock upon conversion of the
Convertible Note pursuant to its terms (the "Debt Warrant Issuance" and together
with the Share Purchase, the Equity Warrant Issuance and the Note Issuance, the
"Financing").
B. The Stockholders are the beneficial owners (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") of
such number of shares of the outstanding Class A common stock of the Company
(the "Company Common Stock") as is set forth on the signature page of this
Agreement.
C. As an inducement and condition to entering into the Purchase Agreement,
Warburg and Broadview have required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
D. In consideration of, among other matters, the execution and delivery of
(i) the Purchase Agreement by Warburg and Broadview, (ii) an Indemnification
Agreement, dated as of the date hereof, between the Company and the Stockholders
(the "Indemnification Agreement") and (ii) termination of Section 2 of the
Existing Stockholders Agreement pursuant to Section 6 hereof (the "Stockholders
Agreement Amendment"), each of the Stockholders (solely in its capacity as such)
is hereby agreeing to vote, or cause to be voted, the Shares (as defined below)
and other such shares of capital stock of the Company over which such
Stockholder has voting power so as to facilitate the transactions contemplated
by the Purchase Agreement.
E. The Company has provided the Stockholders with a summary of the material
terms of the Financing and related acquisition by the Company (the "Term
Sheet").
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) "Co-Investment Agreement" shall mean the Co-Investment Agreement,
dated as of October 31, 1999, among Ripplewood Partners, L.P., WMC Holding
Corp., The ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Revocable Trust, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the
Company.
(b) "Existing Stockholders Agreement" shall mean the Stockholders'
Agreement, dated as of January 16, 2002, between the Stockholders and the
Company.
(c) "Expiration Date" shall mean the earlier to occur of (i) such date
and time as the Purchase Agreement shall have been validly terminated pursuant
thereto, (ii) such date and time that the Stockholders' Meeting is concluded, or
(iii) March 26, 2003.
(d) "Person" shall mean any individual, any corporation, limited
liability company, general or limited partnership, business trust,
unincorporated association or other business organization or entity, or any
governmental body or authority.
(e) "Record Date" shall mean the record date, established pursuant to
the Company's bylaws, relating to the Stockholders Meeting.
(f) "Shares" shall mean: (i) all securities of the Company (including
all shares of Company Common Stock and all options, warrants and other rights to
acquire shares of Company Common Stock) owned by the Stockholders as of the date
of this Agreement, as indicated on the signature page of this Agreement; and
(ii) all additional securities of the Company (including all additional shares
of Company Common Stock and all additional options, warrants and other rights to
acquire shares of Company Common Stock) of which the Stockholders acquire
ownership during the period from the date of this Agreement through the Record
Date, including, without limitation, through the exercise of options, warrants
or other rights to acquire such securities of the Company, or the conversion of
other securities of the Company into such securities of the Company. In the
event of a stock dividend or distribution, or any change in the Shares by reason
of any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged.
(g) "Stockholders' Meeting" shall mean the meeting of Stockholders of
the Company to approve the Financing and the transactions contemplated thereby.
(h) A Person shall be deemed to have effected a "Transfer" of a
security if such Person directly or indirectly: (i) sells, offers to sell, makes
any short sales of, pledges, encumbers, lends, hypothecates, enters into any
type of equity swap or hedging of, grants an option with respect
-2-
to, transfers or disposes of such security, any interest therein, or the
economic consequences of ownership of such security or (ii) enters into an
agreement, contract or commitment providing for the sale of, making any short
sales of, pledge of, lending of, encumbrance of, equity swap or hedging of,
grant of an option with respect to, transfer of or disposition of such security,
any interest therein or the economic consequences of ownership of such security,
other than any such actions pursuant to which such Person maintains through the
Record Date all voting rights with respect to such security.
2. Transfer of Shares.
------------------
(a) Transferee of Shares to be Bound by this Agreement. Except as
permitted under the Existing Shareholders Agreement, the Stockholders hereby
agree that, at all times during the period commencing with the execution and
delivery of this Agreement until the Record Date, the Stockholders shall not
cause or permit any Transfer of any of the Shares (or any securities convertible
into or exercisable or exchangeable for Shares), or any interest in the
foregoing, to be effected.
(b) Transfer of Voting Rights. Except as permitted under the Existing
Shareholders Agreement, the Stockholders hereby agree that, at all times during
the period commencing with the execution and delivery of this Agreement through
the Record Date, the Stockholders shall not deposit (or permit the deposit of)
any Shares in a voting trust or grant any proxy, or enter into any voting
agreement or similar agreement or arrangement in contravention of the
obligations of the Stockholders under this Agreement with respect to any of the
Shares.
(c) Limitation on Registration of Transfer. The Stockholders agree
with, and covenants to, Warburg and Broadview that the Stockholders shall not
request that the Company register the Transfer of any certificate or
uncertificated interest representing any of the Shares, unless such Transfer is
made in compliance with this Agreement.
3. Agreement to Vote Shares.
------------------------
(a) Agreement to Vote. Until the Expiration Date, at the Stockholders'
Meeting, the Stockholders (solely in its capacity as such) shall cause the
Shares to be voted in favor of approval of the Financing and the transactions
expressly contemplated thereby on substantially the terms set forth in the Term
Sheet and against any matter that is inconsistent with the prompt consummation
of the Financing and the transactions expressly contemplated thereby.
(b) No Other Agreement. Prior to the Expiration Date, the Stockholders
shall not enter into any agreement or understanding with any Person to vote or
give instructions in any manner inconsistent with the terms of this Section 3.
4. Representations and Warranties of the Stockholders. The Stockholders
hereby represent and warrant, severally, but not jointly, to the Company, as of
the date hereof and at all times until the Expiration Date (unless indicated
otherwise), as follows:
-3-
(a) Shares. As of the date hereof, except to the extent provided for
in the Existing Stockholders Agreement, each of the Stockholders is the
beneficial owner of, and has good and valid title to, the Shares, free and clear
of any liens, claims, options, rights of first refusal, co-sale rights, charges
or other encumbrances. As of the date hereof, except to the extent provided for
in the Existing Stockholders Agreement, each of the Stockholders does not
beneficially own or have any written or unwritten agreement or arrangement to
acquire any securities of the Company other than the shares of Company Common
Stock and options and warrants to purchase shares of Company Common Stock
indicated on the signature page of this Agreement. Except to the extent provided
for in the Existing Stockholders Agreement, the Stockholders have sole voting
power, sole power of disposition, sole power to issue instructions with respect
to the matters set forth in Sections 2 and 3 hereof, sole power to agree to all
of the matters set forth in this Agreement, in each case with respect to all of
the Shares that it owns, with no limitations, qualifications or restrictions on
such rights, subject to applicable federal securities laws and the terms of this
Agreement.
(b) Organization. Each of the Stockholders is a limited liability
company or partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization.
(c) Authorization; Validity of Agreement; Necessary Action. Each of
the Stockholders has full power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance by it
of this Agreement and the consummation by it of the transactions contemplated
hereby have been duly and validly authorized by the Stockholders and no other
action or proceedings on the part of the Stockholders are necessary to authorize
the execution and delivery by it of this Agreement and the consummation by it of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Stockholders, and, assuming this Agreement constitutes a valid
and binding obligation of the Company, constitutes a valid and binding
obligation of the Stockholders, enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity.
(d) Consents and Approvals; No Violations. Neither the execution,
delivery or performance of this Agreement by each Stockholder nor compliance by
it with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of its certificate of formation, operating agreement,
by-laws or other charter documents, (ii) require any filing with, or permit,
authorization, consent or approval of, any court, administrative agency or
commission or other governmental authority or instrumentality (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not materially impair the ability of the Stockholders to
consummate the transactions contemplated hereby), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation of
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, guarantee, other evidence of indebtedness, lease,
license, contract, agreement or other instrument or obligation to which
Stockholders are a party or by which it or any of its properties or assets may
be bound (except where such violation, breach or default would not materially
impair or delay the ability of the
-4-
stockholders to consummate the transactions contemplated hereby) or (iv) as of
the date hereof, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to it or any of its properties or assets.
5. Stockholders' Agreement Amendment; Co-Investment Agreement. The parties
hereby agree that Section 2 of the Existing Stockholders Agreement shall be
terminated as of, and shall be of no further force or effect following, the
Record Date. Ripplewood Partners, L.P. agrees not to consent, prior to the
Record Date, to any request by The ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Revocable Trust
to put its shares to the Company pursuant to Section 6.01(h) of the
Co-Investment Agreement.
6. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
appropriate to consummate the transactions contemplated by this Agreement.
7. Termination. This Agreement shall terminate and shall have no further
force or effect as of the Expiration Date.
8. Miscellaneous.
-------------
(a) Waiver. No waiver by any party hereto of any condition or any
breach of any term or provision set forth in this Agreement shall be effective
unless in writing and signed by each party hereto. The waiver of a condition or
any breach of any term or provision of this Agreement shall not operate as or be
construed to be a waiver of any other previous or subsequent breach of any term
or provision of this Agreement.
(b) Severability. In the event that any term, provision, covenant or
restriction set forth in this Agreement, or the application of any such term,
provision, covenant or restriction to any person, entity or set of
circumstances, shall be determined by a court of competent jurisdiction to be
invalid, unlawful, void or unenforceable to any extent, the remainder of the
terms, provisions, covenants and restrictions set forth in this Agreement, and
the application of such terms, provisions, covenants and restrictions to
persons, entities or circumstances other than those as to which it is determined
to be invalid, unlawful, void or unenforceable, shall remain in full force and
effect, shall not be impaired, invalidated or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by
applicable law.
(c) Binding Effect; Assignment. This Agreement and all of the terms
and provisions hereof shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the Stockholders may be assigned to
any other Person without the prior written consent of the Company.
-5-
(d) Amendments. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by each of the parties hereto.
(e) Specific Performance; Injunctive Relief. Each of the parties
hereto hereby acknowledges that (i) the representations, warranties, covenants
and restrictions set forth in this Agreement are necessary, fundamental and
required for the protection of the Company and to preserve for the Company the
benefits of the Financing; (ii) such covenants relate to matters which are of a
special, unique, and extraordinary character that gives each such
representation, warranty, covenant and restriction a special, unique, and
extraordinary value; and (iii) a breach of any such representation, warranty,
covenant or restriction, or any other term or provision of this Agreement, will
result in irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, the Company and the Stockholders
hereby expressly agree that in addition to all other remedies available at law
or in equity, the Company shall be entitled to the immediate remedy of specific
performance, a temporary and/or permanent restraining order, preliminary
injunction, or such other form of injunctive or equitable relief as may be used
by any court of competent jurisdiction to restrain or enjoin any of the parties
hereto from breaching any representations, warranties, covenants or restrictions
set forth in this Agreement, or to specifically enforce the terms and provisions
hereof.
(f) Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of law provision, rule
or principle (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.
(g) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day) of
transmission by telecopy or telefacsimile or (iii) on the date of confirmation
of receipt (or, the first business day following such receipt if the date is not
a business day) if delivered by a nationally recognized courier service. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(i) If to the Company:
Proxim Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention:
Fax:
-6-
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Stockholders: To the address for notice set
forth on the signature page hereof.
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Fax:
(h) Enforcement; Consent to Jurisdiction; Waiver of Jury Trial.
----------------------------------------------------------
(i) Each of the parties hereto:
(A) consents to submit itself to the personal jurisdiction
of (x) the United States District Court for the District of Delaware in the
event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement to the extent such court would have subject
matter jurisdiction with respect to such dispute and (y) the Chancery or other
Courts of the State of Delaware;
(B) agrees that it will not attempt to deny or defeat such
personal jurisdiction or venue by motion or other request for leave from any
such court;
(C) agrees that it will not bring any action relating to
this Agreement or any of the transactions contemplated by this Agreement in any
court other than such courts;
(D) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to a party at
its address set forth in Section 8(g) or at such other address of which a party
shall have been notified pursuant thereto; and
(E) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
-7-
(ii) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING IN RELATION TO THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.
(iii) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(i) Entire Agreement. This Agreement and the Indemnification Agreement
contain the entire understanding of the parties in respect of the subject matter
hereof, and supersede all prior negotiations and understandings between the
parties with respect to such subject matter.
(j) Headings. The section headings set forth in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement in any manner.
(k) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
-8-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
PROXIM CORPORATION STOCKHOLDERS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ RIPPLEWOOD PARTNERS, L.P.
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ By: Ripplewood Investments L.L.C.,
---------------------------- its general partner
Title: President and COO By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------- -------------------------------
Signature
Name: ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title:
-------------------------------
Print Address:
Ripplewood Investments L.L.C.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
(▇▇▇) ▇▇▇-▇▇▇▇
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Telephone Number
(▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile Number
Shares Beneficially Owned:
30,992,522 shares of Company Common Stock
----------
0 shares of Company Common Stock
---------- issuable upon exercise of out-
standing options or warrants
[SIGNATURE PAGE TO PROXIM VOTING AGREEMENT]
-9-
RIPPLEWOOD CO-INVESTMENT FUND I, L.L.C.
By: Ripplewood Investments L.L.C.,
its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Signature
Name: ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title:
-------------------------------
Print Address:
Ripplewood Investments L.L.C.
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▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
(▇▇▇) ▇▇▇-▇▇▇▇
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Telephone Number
(▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------
Facsimile Number
Shares Beneficially Owned:
1,097,534 shares of Company Common Stock
---------
0 shares of Company Common Stock
--------- issuable upon exercise of out-
standing options or warrants
[SIGNATURE PAGE TO PROXIM VOTING AGREEMENT]
-10-