Exhibit 10.29
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE LAW, AND NO
INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION
INVOLVING SAID SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL
FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION OR (C) THE COMPANY OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
July 12, 2004 $________
TERABEAM CORPORATION
CONVERTIBLE PROMISSORY NOTE
Terabeam Corporation, a Washington corporation (the "Company"), for value
received, promises to pay to ___________ (the "Holder") the principal sum of
$_________, subject to adjustment from time to time in accordance with Section 2
of this Note and Article VII of the Merger Agreement (the "Principal Amount").
Capitalized terms not defined herein shall have the meanings given such terms in
that certain Agreement and Plan of Merger and Reorganization among the Company,
Harmonix Corporation and the stockholders of Harmonix Corporation (the "Merger
Agreement").
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, to which the Holder, by the acceptance
of this Note, agrees:
1. Principal and Interest; Payment; Prepayment
(a) Principal and Interest. Interest shall accrue on the unpaid Principal
Amount at a rate of 6.75% per annum, simple interest ("Interest"), measured from
the date set forth above. Interest only shall be due and payable on the fifth
day of the first month of each quarter during the term of this Note. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
outstanding Principal Amount and any accrued and unpaid Interest shall become
due and payable on July 12, 2005 (the "Maturity Date"). Notwithstanding the
foregoing, the entire unpaid Principal Amount, together with all accrued and
unpaid Interest thereon, shall become immediately due and payable in the event
of any Event of Default (as defined below).
(b) Payment. All payments shall be made in lawful money of the United
States of America at such place as the Holder hereof may from time to time
designate in writing to the
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION.
Company. Payment shall be credited first to the accrued interest then due and
payable and the remainder applied to principal.
(c) Prepayment. The Company may at any time prepay in whole or in part the
Principal Amount and any accrued and unpaid Interest thereon.
2. Purchase Note Subject to Merger Agreement; Offset
This Note is a "Purchase Note" under the Merger Agreement and is expressly
subject to Article VII thereof. As contemplated in the Merger Agreement, the
Principal Amount and Interest is subject to adjustment. For informational
purposes only, the Company may amend Schedule A hereto from time to time to
reflect the Principal Amount after any such adjustment.
3. Conversion
At any time after the date hereof, and subject to Article VII of the
Merger Agreement, Holder shall have the right, at its sole discretion, to notify
the Company in writing of its desire to convert the outstanding Principal Amount
and any accrued and unpaid Interest into fully paid and nonassessable shares of
common stock of YDI Wireless, Inc. ("YDI"), the Company's corporate parent
("Common Stock") at a conversion price of $27.27 per share (subject to
adjustment for stock splits, stock dividends, recapitalizations and similar
events), effective as of the date of such notice. The number of shares of Common
Stock to be issued upon such conversion shall be equal to the quotient obtained
by dividing (x) the then-outstanding Principal Amount (subject to any reserved
amounts permitted pursuant to Article VII of the Merger Agreement) and any
accrued and unpaid Interest by (y) $27.27 (subject to adjustment for stock
splits, stock dividends, recapitalizations and similar events).
4. Issuance of the Stock Upon Conversion; Fractional Shares
As soon as practicable after conversion of this Note, the Company, at its
expense, will cause to be issued in the name of and delivered to the Holder, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which the Holder shall be entitled upon such
conversion, which certificates shall include legends restricting transfer under
the federal and state securities laws. No fractional shares will be issued upon
conversion of this Note. If, upon conversion of this Note, a fraction of a share
results, the Company will pay the cash value of that fractional share,
calculated based on the per share value determined pursuant to Section 3 hereof.
5. Holder's Representations
The Holder represents and warrants that:
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION
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(a) it is familiar with each of YDI and the Company, the nature of
its business and its financial prospects, and the Holder has the capacity to
protect its own interests, and
(b) it is acquiring the Note and the securities that may be
purchased upon conversion for investment for its own account, not as a nominee
or agent, and not with a view to, or for resale in connection with, any
distribution. It understands that the Note and the securities that may be
purchased upon conversion have not been, and will not be, registered under the
Securities Act of 1933, as amended, by reason of a specific exemption from the
registration provisions of such Act, the availability of which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Holder's representations.
6. Company Representations and Warranties
The Company represents and warrants that:
(a) It is a corporation duly organized and validly existing under
the laws of the State of Washington. The Company has all requisite corporate
power and authority to carry on its business as presently conducted, and to
carry out the transactions contemplated in this Note. The Company is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on the Company's financial condition, business,
operations or property.
(b) The execution, delivery and performance by the Company of this
Note has been duly authorized by all requisite action of the Company and its
directors and shareholders. This Note has been duly executed and delivered by
the Company, and this Note constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(c) No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Note, except for filings pursuant to the federal securities
laws and to applicable state Blue Sky laws.
7. Transfer of Note; Restrictions on Transfer
This Note may be transferred only in compliance with applicable federal
and state securities laws and only upon surrender of the original Note for
registration of transfer, duly endorsed, or accompanied by a duly executed
written instrument of transfer in form satisfactory to the Company. A new Note
for like principal amount and interest will be issued to, and registered in the
name of, the transferee. Interest and principal are payable
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION
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only to the registered holder of the Note. The Holder agrees to provide a Form
W-9 to the Company upon request.
8. Events of Default
If any of the events specified in this Section 8 shall occur (an "Event of
Default"), the Holder may, so long as such condition exists, declare the
outstanding Principal Amount and accrued but unpaid Interest immediately due and
payable, by notice in writing to the Company:
(a) The institution by the Company of proceedings to be adjudicated
as bankrupt or insolvent, the filing by the Company of a petition or answer or
consent seeking reorganization or release under the federal Bankruptcy Act, or
any other applicable federal or state law, the appointment of a receiver,
liquidator or trustee for the purpose of taking possession of all or
substantially all of the Company's assets, an assignment by the Company for the
benefit of creditors, or the taking of corporate action by the Company in
furtherance of any such action;
(b) If, within 90 days after the commencement of an action against
the Company (and service of process on the Company) seeking any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such action shall not have been
resolved in favor of the Company or all orders or proceedings thereunder
affecting the operations or the business of the Company stayed, or if the stay
of any such order or proceeding shall thereafter be set aside, or if, within 90
days after the appointment without the consent or acquiescence of the Company of
any trustee, receiver or liquidator of the Company, such appointment shall not
have been vacated; or
(c) Failure to pay the Principal Amount and Interest when due, if
such failure is not cured within ten (10) days after the Holder's delivery of a
notice of such failure.
9. Miscellaneous
9.1 Remedies
The Company and all endorsers of this Note hereby waive notice,
presentment, protest and notice of dishonor.
9.2 Attorneys' Fees
The Company and all endorsers of this Note agree to pay the Holder's
reasonable expenses and costs in collecting and enforcing this Note, including
reasonable attorneys' fees.
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION
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9.3 Holder as Owner
The Company may deem and treat the holder of record of this Note as the
absolute owner for all purposes regardless of any notice to the contrary.
9.4 No Shareholder Rights
This Note shall not entitle the Holder to any voting rights or any other
rights as a shareholder of YDI or the Company or to any other rights except the
rights stated herein; and no dividend shall be payable or shall accrue in
respect of this Note or the securities into which this Note is convertible,
until this Note is converted.
9.5 Shareholders, Officers and Directors Not Liable
In no event shall any shareholder, officer or director of YDI or the
Company be liable for any amounts due or payable pursuant to this Note.
9.6 Notices
Unless otherwise provided, any notice under this Note shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party to be
notified, (c) one business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed as set forth below, or at such
other address as such party may designate by ten days' advance written notice to
the other party given in the foregoing manner.
If to the Holder:
To the address or number last furnished in writing to the
Company by the Holder
If to the Company:
Terabeam Corporation
20 Industrial Drive East
South Deerfield, MA 01373
Fax: (413) 665-0089
Attn: General Counsel
9.7 Amendments and Waivers
Any term of this Note may be amended and the observance of any term may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Holder;
provided, however, that the Company may amend Schedule A hereto without the
Holder's consent to reflect any
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION
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adjustments to the Principal Amount as provided in Section 2 above. Any
amendment or waiver shall be binding on each future Holder and the Company.
9.8 Governing Law; Jurisdiction; Venue
This Note shall be governed by and construed under the laws of the state
of Washington without regard to principles of conflict of laws. The parties
irrevocably consent to the jurisdiction and venue of the state and federal
courts located in King County, Washington in connection with any action relating
to this Note.
9.9 Successors and Assigns
The terms and conditions of this Note shall inure to the benefit of and be
binding on the respective successors and assigns of the parties.
9.10 Severability
If one or more provisions of this Note are held to be unenforceable under
applicable law, such provision shall be excluded from this Note, and the balance
of this Note shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
TERABEAM CORPORATION
By: ________________________________
Name:________________________________
Its: ________________________________
AGREED AND ACCEPTED:
__________________ ("HOLDER")
By: ________________________________
Name:________________________________
Its: ________________________________
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION
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SCHEDULE A
Schedule of Adjustments to Principal Amount
CONVERTIBLE PROMISSORY NOTE TERABEAM CORPORATION.