EXHIBIT 10.15
METAWAVE COMMUNICATIONS CORPORATION
NOTE AGREEMENT
Dated as of April 27, 1998
Re:
$29,000,000 13.75% Senior Secured Bridge Notes
due April 28, 2000
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES; COMMITMENT; WARRANTS 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 2
Section 1.3. Additional Warrants 2
Section 1.4. Limits on Rate of Return 3
SECTION 2. REDEMPTION OF NOTES 4
Section 2.1. Optional Redemption 4
Section 2.2. Notice of Redemption 4
Section 2.3. Mandatory Redemption 4
Section 2.4. Change of Control 4
SECTION 3. REPRESENTATIONS 5
Section 3.1. Representations of the Company 5
Section 3.2. Representations of the Purchasers 5
SECTION 4. CLOSING CONDITIONS 6
Section 4.1. Closing Certificate 6
Section 4.2. Company's Existence and Authority 6
Section 4.3. Consents 7
Section 4.4. Opinion 7
Section 4.5. Security Interest 7
Section 4.6. No Default; Representations and Warranties 7
Section 4.7. Compliance with this Agreement 7
Section 4.8. No Material Adverse Change 7
Section 4.9. Consents, Permits, Etc. 7
Section 4.10. Purchase Permitted by Applicable Laws 8
Section 4.11. Due Diligence 8
Section 4.12. Financial Statements 8
Section 4.13. Legal Fees 8
Section 4.14. Subsidiary. 8
SECTION 5. COMPANY COVENANTS 8
Section 5.1. Corporate Existence, Etc. 8
Section 5.2. Insurance 9
Section 5.3. Taxes 9
Section 5.4. Maintenance, Etc. 9
Section 5.5. Limitations on Indebtedness 9
Section 5.6. Limitation on Liens 10
Section 5.7. Restricted Payments 10
Section 5.8. Mergers, Consolidations and Sales of Assets 10
Section 5.9. Transactions with Affiliates 11
Section 5.10. Financial Statements, etc. 12
Section 5.11. Board Representation 12
Section 5.12. Indemnification 12
Section 5.13. Subsidiary 12
Section 5.14. Covenants. 13
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR 13
Section 6.1. Events of Default 13
Section 6.2. Notice to Holders 14
Section 6.3. Acceleration of Maturities 15
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS 15
Section 7.1. Consent Required 15
Section 7.2. Solicitation of Noteholders 15
Section 7.3. Effect of Amendment or Waiver 15
SECTION 8. INTERPRETATION OF AGREEMENT, DEFINITIONS 16
Section 8.1. Definitions 16
SECTION 9. MISCELLANEOUS 19
Section 9.1. Note Register 19
Section 9.2. Exchange of Notes 20
Section 9.3. Loss, Theft, Etc. of Notes 20
Section 9.4. Powers and Rights Not Waived; Remedies Cumulative 20
Section 9.5. Notices 20
Section 9.6. Successors and Assigns 21
Section 9.7. Integration and Severability 21
Section 9.8. Like Treatment of Holders 21
Section 9.9. Governing Law 21
Section 9.10. Captions 22
Section 9.11. Brokerage Fees 22
Section 9.12. Intentionally Left Blank 22
Section 9.13. Possible Future Notes 22
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I Name and Address of Purchasers
Schedule 5.5 Indebtedness of the Company
Schedule 8.1 Stockholders of the Company
Exhibit A Form of 13.75% Senior Secured Bridge Note Due April [ ], 2000
Exhibit B Form of Warrant
Exhibit C Closing Certificate of the Company
Exhibit D Form of Company Legal Opinion
Exhibit E Form of Security Agreement
METAWAVE COMMUNICATIONS CORPORATION
NOTE AGREEMENT
RE: $29,000,000 13.75% SENIOR SECURED BRIDGE NOTES
DUE APRIL 28, 2000
Dated as of April 27, 1998
To the Purchasers named in Schedule I attached hereto that are signatories to
this Agreement
Ladies and Gentlemen:
The undersigned, Metawave Communications Corporation, a Delaware
corporation (the "Company") agrees with each Purchaser as follows:
SECTION 1. DESCRIPTION OF NOTES; COMMITMENT; WARRANTS.
Section 1.1. Description of Notes. The Company will authorize the issue
and sale of $29,000,000 aggregate original principal amount of its 13.75% Senior
Secured Bridge Notes due April 28, 2000 (the "Notes") to be dated the date of
issue. Interest on the Notes will accrue at the lower of (i) 13.75% per annum
(as adjusted pursuant to the next succeeding sentence, the "Base Interest Rate")
and (ii) the highest rate permitted by law (such lower amount being referred to
as the "Interest Rate"), and will be payable semi-annually on April 28th and
October 28th of each year, commencing on October 28, 1998, and at maturity. On
the twelve-month anniversary of the Closing Date, and at the end of each
subsequent one hundred eighty (180) day period, the Base Interest Rate will
increase by 200 basis points, up to a maximum Base Interest Rate of 18.0%. The
interest shall be payable at the option of the Company (x) in kind by the
issuance to the holders thereof of separate promissory notes (each an "Interest
Note," and, collectively, the "Interest Notes"), in each case having a principal
amount equal to the amount of interest due and payable on such holder's
outstanding Notes on such interest payment date, or (y) in cash; provided that
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the Company will only be entitled to pay such interest in cash if it has
irrevocably notified in writing the holders of the Notes of its intention to
make a cash interest payment at least ten (10) Business Days before the relevant
interest payment date, it being agreed that payment in kind via Interest Notes
is the default interest payment method in the absence of such notice. Interest
on Interest Notes shall accrue at the same Interest Rate per annum and shall be
payable in kind by the issuance of additional Interest Notes or in cash as
provided above on the same date as interest is payable in kind or in cash as
provided above on the Notes. The unpaid principal balance of all Notes
(including Interest Notes), together with accrued but unpaid interest thereon,
shall be due and payable in cash on the stated date of maturity of the Notes.
Notwithstanding different issue dates, unless the context clearly requires
otherwise, all Interest Notes shall be Notes for all purposes of this Agreement.
The Notes will bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the
Interest Rate from the date such payment is due, whether by acceleration or
otherwise, until paid. The Notes (including the Interest Notes) will mature on
April 28, 2000, and will be substantially in the form attached hereto as Exhibit
A. Interest on the Notes shall accrue and be computed semi-annually on the
basis of a 360-day year of twelve 30-day months. The term "Notes" as used
herein shall include each Note (including each Interest Note) delivered at any
time pursuant to this Agreement. The terms that are capitalized herein shall
have the meanings set forth in Section 8.1 hereof unless the context shall
otherwise require or unless they are defined elsewhere herein. The Notes
(including Interest Notes) will be senior secured obligations of the Company,
ranking pari passu in right of payment with all permitted existing and permitted
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future senior secured Indebtedness of the Company and senior to all unsecured or
subordinated Indebtedness of the Company, all non-permitted senior secured
indebtedness of the Company and all other senior indebtedness of the Company.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth in this Agreement and in Exhibit C hereto, the Company
agrees to issue and sell to each Purchaser, and each Purchaser agrees to
purchase from the Company, the aggregate principal amount of Notes set forth
opposite such Purchaser's name on Schedule I attached hereto by delivery of the
Purchase Price for such Notes as set forth on Schedule I. On the Closing Date
(as defined below), the Company also shall deliver to the Purchasers, pro rata
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in proportion to the number of Notes they purchase on the Closing Date, Warrants
to purchase an aggregate of 537,500 shares of the Company's Series D Preferred
Stock, par value $.0001 per share (the "Preferred Stock") substantially in the
form of Exhibit B hereto (the "Warrants") and registered in the name of each
Purchaser or its nominee and in such denominations as reasonably requested by
such Purchaser. Delivery of the Notes and Warrants will be made at the offices
of Kleinberg, Kaplan, Wolff & Cohen, P.C. against payment therefor, pursuant to
the wiring instructions set forth on the Company's signature page S-1 to this
Agreement, in immediately available funds in an amount equal to the Purchase
Price at 3 P.M., Eastern time on April 28, 1998 (the "Closing Date"). The Notes
delivered to each Purchaser on the Closing Date will be registered in the name
of such Purchaser or in the name of such nominees and in such denominations as
such Purchaser may specify no later than two Business Days prior to the Closing
Date and in substantially the form attached hereto as Exhibit A.
Section 1.3. Additional Warrants.
(a) In the event that the Company offers or sells certain Stock,
or certain securities convertible into or exchangeable or exercisable for Stock,
whether in a public or private offering, while any Notes or Warrants are
outstanding and such Stock is valued (based on the consideration directly
received by the Company upon such sale, conversion or exchange) at less than
$9.25 per share (as presently constituted), then the Company shall issue
additional Warrants to then holders of the Warrants and adjust the Warrant
exercise price, all as set forth in the Warrants.
(b) On the twelve month anniversary of the Closing Date, and at
the end of each subsequent ninety (90) day period, until the Company has
completed an Initial Public Offering and redeemed at least one-half of all
issued and outstanding Notes (including Interest Notes, if any), the Company
will issue to then holders of Notes additional Warrants to purchase two hundred
thousand (200,000) shares of Preferred Stock (pro rata in proportion to the
principal amount of the Notes then held by the Note holders).
Section 1.4. Limits on Rate of Return. The Company may redeem and
repurchase from the Purchasers and all subsequent holders of the Notes, the
Warrants and any shares of Preferred Stock issued upon exercise of the Warrants
(the "Preferred Shares") all such Notes, Warrants and Preferred Shares if and
only if, on or before the earlier of (a) the closing of the Company's first
Initial Public Offering, or (b) April 28, 1999, time being of the essence, the
Company shall have completed in all respects the redemption and repurchase of
and payment in full for any and all Notes, Warrants and Preferred Shares for an
aggregate redemption and repurchase price of $40,600,000 in cash (subject to
equitable increase upon the occurrence of any of the adjustment events specified
in Section 5 of the Warrants), such redemption price to be allocated first to
the redemption of the Notes at their face value, then to the redemption of the
Preferred Shares at their liquidation value, and any excess to the redemption of
the Warrants. This right is (a) subject to the Company's obligation to give all
record holders of the Notes, Warrants and Preferred Shares as much notice as is
reasonably possible (but in no event less than 15 Business Days' notice) of its
intention to so redeem and repurchase on or before April 28, 1999; (b) further
subject, if the Company is to use all or part of the proceeds from an Initial
Public Offering for such redemption, to the Company's affirmative obligation to
so inform all such record holders on the first day following the day a
registration statement relating to the Initial Public Offering is first filed
(in preliminary, final, confidential or other form) with the Securities and
Exchange Commission; and (c) further subject to the receipt by the holders of
the Notes, the Warrants and the Preferred Shares of an opinion of outside
counsel to the Company, in form and content satisfactory to such holders, that
such redemption and payment (i) does not violate the charter, by-laws or any
agreement to which the Company is a party or by which its property is bound,
(ii) is not in violation of any law, rule, regulation or statute, and (iii) is
not a void or voidable (or similar) transfer under applicable federal or state
law (and a representation of the Company to that effect is also given to such
holders). To the extent the Company is obligated to give notice under (a) above
after its Initial Public Offering, it may also give notice to the public via a
press release. With respect to any Warrants, Warrant Shares or Common Shares
which have been sold by a Purchaser prior to the completion of the redemption
set forth in this Section 1.4, such Warrants, Warrant Shares and Common Shares
shall be subject to the Company's redemption rights in this Section 1.4.
SECTION 2. REDEMPTION OF NOTES.
Section 2.1. Optional Redemption. The Company may at any time and from
time to time and at its option redeem all or, on a pro-rata basis, less than all
(but not less than one-half of all) the then outstanding Notes (including
Interest Notes) by (a) payment in cash of the aggregate principal amount thereof
plus all accrued and unpaid interest thereon to the date of such
redemption, plus (b) the issuance of all Warrants required to be issued
hereunder and under the Warrants on or before such redemption date. The Company
may also redeem all or part of the Notes as provided in Sections 5.9(viii) and
5.14.
Section 2.2. Notice of Redemption. The Company will give irrevocable
written notice of any redemption of the Notes pursuant to Section 2.1 to the
holders thereof not less than 30 days nor more than 60 days before the date
fixed for such redemption specifying (a) such date, (b) the aggregate principal
amount of the Notes to be redeemed, (c) accrued and unpaid interest, if any,
payable to the redemption date and (d) Warrants required to be issued pursuant
to Section 2.1(b). Notice of redemption having been so given, the aggregate
principal amount (or portion thereof) specified in such notice, together with
accrued and unpaid interest, if any, shall become due and payable, and such
Warrants shall become issuable, on the redemption date.
Section 2.3. Mandatory Redemption.
(a) Upon the completion of an Initial Public Offering, the
Company shall redeem one-half of the aggregate principal amount of the Notes
(including Interest Notes) outstanding, together with accrued but unpaid
interest thereon, pro rata among the holder of the Notes.
(b) As soon as reasonably practicable, but in no event later
than the date following the date on which the registration statement related to
the Initial Public Offering is first filed with the Securities and Exchange
Commission (in preliminary, final, confidential or other form), the Company
shall give the holders of Notes written notice (containing reasonable detail) of
the Company's intention (subject to the successful completion of the Initial
Public Offering) as to the use of the proceeds of such Initial Public Offering
with respect to the Notes, including as to the optional redemption of any Notes
in excess of the one-half to be mandatorily redeemed pursuant to paragraph
2.3(a).
Section 2.4. Change of Control. Upon the public announcement or other
notification pursuant to this Section 2.4 of a Change of Control transaction, a
holder of Notes will, at any time after such public announcement or
notification, have the right to cause the Company to redeem all or part of such
holder's outstanding Notes by payment by the Company in respect of such redeemed
Notes to such holder in immediately available funds by wire transfer equal to
101% of the principal amount plus accrued but unpaid interest on such Notes.
The Company, upon learning of the impending Change of Control transaction, will
promptly notify the holders of Notes in writing of any impending Change of
Control transaction, specifying in reasonable detail all material terms thereof.
If such notice is given after the Initial Public Offering, the Company may also
inform the public and the markets via a press release. Upon any such request
for redemption by a holder of the Notes under this Section 2.4, the Company
shall so redeem such holder's Notes within three Business Days of that request.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations and warranties set forth in the form of
certificate attached hereto as Exhibit C are true and correct as of the date
hereof, and shall be true and correct on the Closing Date, and agrees that all
such representations and warranties are incorporated herein by reference with
the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser severally
represents, warrants and agrees for itself only that:
(a) Such Purchaser is acquiring its Notes for the purpose of
investment for the Purchaser's own account and not with a view to the resale or
distribution thereof, and that such Purchaser has no present intention of
selling, negotiating or otherwise disposing of its Notes except in accordance
with applicable securities laws.
(b) No part of the funds to be used by such Purchaser to
purchase the Notes constitutes assets allocated to any "separate account"
maintained by it. As used in this Section 3.2(b), the term "separate account"
shall have the meaning assigned to it in ERISA.
(c) Such Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(d) No approval, consent or withholding of objection on the part
of any regulatory body, state, federal or local, or any other third party is
necessary in connection with the execution by such Purchaser of the Agreement or
its acceptance of its Notes or compliance by such Purchaser with any of the
provisions of the Agreement or the Notes, unless such consent or approval has
already been obtained.
(e) The execution, delivery and performance by such Purchaser of
this Agreement and all other instruments and documents to be executed and
delivered by such Purchaser in connection herewith are not (and will not be or
result) in material conflict with or in material contravention or material
violation of any law (including common law), rule or regulation by which such
Purchaser is bound or to which it is subject or any material agreement to which
it is a party.
(f) The Company has advised the Purchaser that the Notes have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Purchaser's representations as expressed herein, and the Notes
may not be sold, transferred or otherwise disposed of by such Purchaser without
such registration or an exemption therefrom. The Purchaser understands that the
Securities are "restricted securities" under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the
Purchaser must hold the Securities indefinitely unless they are registered with
the Securities and Exchange Commission and qualified by state authorities, or an
exemption from such registration and qualification requirements is available.
Such Purchaser is either an accredited investor within the meaning of Rule 501
of the Securities Act or a qualified institutional buyer within the meaning of
Rule 144A of the Securities Act.
(i) The Purchaser is aware of the Company's business
affairs and financial condition only to the extent disclosed in writing to the
Purchaser by the Company. Nothing in this Section 3.2(g) shall limit the rights
of any Purchaser or its assignees or successors in interest to rely on the
representations, warranties and covenants of the Company without investigation.
(ii) The Purchaser understands that no public market now
exists for any of the securities issued by the Company, and that the Company has
made no assurances that a public market will ever exist for the Notes.
(iii) The Purchaser understands that the Notes, Warrants and
Preferred Shares, and any securities issued in respect thereof or exchange
therefor, may bear the legends shown on the forms attached hereto as exhibits.
The parties agree that such legend(s) shall be removed at such time as, in the
reasonable judgment of counsel for the Company, or as in the reasonable opinion
delivered to the Company of counsel to such Purchaser or holder, they are no
longer required by law.
SECTION 4. CLOSING CONDITIONS.
Each Purchaser's obligation to purchase the Notes on the Closing Date shall
be subject to the performance by the Company of its agreements hereunder that
are to be performed at or prior to the time of delivery of the Notes, and to the
following further conditions precedent:
Section 4.1. Closing Certificate. Such Purchaser shall have received a
certificate dated such Closing Date, signed by an Officer of the Company
substantially in the form attached hereto as Exhibit C.
Section 4.2. Company's Existence and Authority. Such Purchaser shall
have received, in form and substance satisfactory to it, such documents and
evidence with respect to the Company as such Purchaser may reasonably request in
order to establish the existence and good standing of the Company and the
authorization of the transactions contemplated by this Agreement.
Section 4.3. Consents. Any consents or approvals required to be obtained
by the Company or any of its Subsidiaries that are necessary to permit the
consummation of the transactions contemplated hereby on such Closing Date shall
have been obtained.
Section 4.4. Opinion. Each Purchaser shall have received an opinion
dated the Closing Date from Venture Law Group, counsel for the Company,
substantially in the form of Exhibit D.
Section 4.5. Security Interest. Each Purchaser shall have a valid and
perfected, first priority security interest in all of the Collateral (except (a)
for accounts receivable and inventory, in which each Purchaser shall have a
valid and perfected second priority security interest in favor of Imperial Bank
to the extent of Imperial Bank's first $7,500,000 in secured interest under the
Liquidity Facility, and the holders of the Notes shall have a first priority,
perfected secured interest in all other accounts receivable and inventory; (b)
for equipment subject to bona-fide purchase money security interests for fair
value, in which each Note holder shall have a valid and perfected second
priority security interest in favor of the seller or lessor of such equipment,
such seller's or lessor's first security interest and rights being limited to
the unpaid amount of such fair value) and shall have received a Security
Agreement and inter-creditor agreement with Imperial Bank in form and content
acceptable to each Purchaser.
Section 4.6. No Default; Representations and Warranties. There will not
exist on the Closing Date an Event of Default or Default. The representations
and warranties contained in paragraph 3.1 hereof shall be true and not false or
misleading on and as of the Closing Date.
Section 4.7. Compliance with this Agreement. The Company shall have
executed and delivered the Notes, the Warrants and the Security Agreement as
contemplated herein, in form and content acceptable to Purchaser; and the
Company shall have performed and complied with all agreements, covenants and
conditions contained herein which are required to be performed or complied with
by it on or before the Closing Date.
Section 4.8. No Material Adverse Change. Between December 31, 1997 and
the Closing Date (a) there shall have been no change constituting a Material
Adverse Effect, (b) the business and affairs of the Company shall have been and
will have been conducted and carried on only in the ordinary course of business
consistent with past practices and (c) the properties and facilities owned or
leased by the Company shall not have suffered in the aggregate any material
destruction or damage, regardless of whether or not any loss suffered was
insured.
Section 4.9. Consents, Permits, Etc. The Company shall have received all
material permits and other authorizations, and made all such material filings
and declarations, as may be required to be obtained or filed prior to the
Closing Date from any Person pursuant to any law, statute, regulation or rule
(federal, state, local and foreign), or pursuant to any agreement, order or
decree to which it is a party or to which it is subject, in connection with, or
in order to effectuate, the transactions related to this Agreement and the
issuance of the Notes and Warrants.
Section 4.10. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes and the Warrants to be purchased by the Purchasers or
their designees hereunder on the terms and conditions provided herein shall not
be prohibited by any applicable law, court order or governmental regulation and
shall not subject any Purchaser to any tax (other than possible income and
capital gains tax upon the sale thereof or possible OID), penalty, assessment or
withholding liability under or pursuant to any applicable law or governmental
regulation, and the Purchasers shall have received such certificates or other
evidence as they may reasonably request to establish compliance with this
condition.
Section 4.11. Due Diligence. The Purchasers, acting on their own or
through their advisers, agents, engineers, environmental consultants, personnel,
counsel, accountants or other representatives designated by them, shall have
been afforded full and complete opportunity to examine the books and records,
titles and leases to properties, and documents and information relating to
patents, loans and other agreements, any pending or threatened litigation, and
other matters pertaining to the legal structure, regulatory compliance
(including, without limitation, environmental (including Phase I and Phase II
reports, if any), health and safety and employee benefit regulatory compliance),
assets, capital and obligations of the Company. A satisfactory conclusion, in
the opinion of the Purchasers and their counsel, of such examination is a
condition precedent to the obligations of the Purchasers under this Agreement.
Section 4.12. Financial Statements. The Purchasers shall have received
copies of the audited financial statements of the Company for the fiscal year
ended December 31, 1997 and the report thereon of Ernst & Young, LLP, in form
and content satisfactory to the Purchasers.
Section 4.13. Legal Fees. The Company shall have paid, by wire transfer
of immediately available funds, the reasonable legal fees and disbursements of
counsel to the Purchasers incurred in connection with the negotiation and
preparation of this Agreement, the Notes, the Warrants, the Security Agreement
and related documentation and services rendered in connection therewith.
Section 4.14. Subsidiary. The Company represents that it has no
Subsidiaries, and covenants that at Closing it shall have no Subsidiaries.
SECTION 5. COMPANY COVENANTS.
From and after the date of this Agreement and continuing so long as any
amount remains unpaid on any Note or any Warrant remains outstanding:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in force and effect its corporate existence, and will cause each
Subsidiary, if any, to preserve and keep in force and effect its corporate,
partnership or other existence in accordance with the respective organizational
documents of each such Subsidiary, and the rights and franchises of the Company
and its Subsidiaries, provided that (a) the Company shall not be required to
preserve any such right or franchise, or the existence, right or franchise of
any of its Subsidiaries, if (i) the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the businesses of the Company and its Subsidiaries and (ii) such lack of
preservation shall not prejudice the rights of any holder of the Notes, the
Warrants or the Preferred Shares and (b) the provisions of this Section 5.1
shall not limit the ability of the Company or any Subsidiary of the Company to
engage in any transaction permitted by Section 5.8 hereof.
Section 5.2. Insurance. The Company will maintain, and will cause each
Subsidiary to maintain, insurance coverage by financially sound and reputable
insurers in such forms and
amounts and against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties.
Section 5.3. Taxes. The Company will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries or upon the income, profits or property of the Company or of
any such Subsidiary; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment
or charge whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and for which adequate provision has been made
in the Company's financial statements.
Section 5.4. Maintenance, Etc. The Company will cause all material
properties owned by or leased to it or any of its Subsidiaries and material to
the business of the Company and its Subsidiaries to be maintained and kept in
normal condition and working order (ordinary wear and tear excepted) and will
from time to time cause to be made all necessary repairs, renewals, and
replacements thereof, all as in the reasonable judgment of the Company may be
necessary, so that the business carried on in connection therewith may be
properly conducted; provided, however, that (a) nothing in this Section 5.4
shall prevent the Company from discontinuing the use, operation or maintenance
of any of such properties, or disposing of any of them, if such discontinuance
or disposal is, in the judgment of its Board of Directors or of the Board of
Directors, board of trustees or managing partners of the Subsidiary concerned,
in the best interests of the Company or any such Subsidiary (provided that any
such disposal is in an arms-length transaction for a fair value after taking
into account all circumstances involved in the decision to dispose of such
property); and (b) the provisions of this Section 5.4 shall not limit the
ability of the Company or any Subsidiary to engage in any transaction permitted
by Section 5.8 hereof.
Section 5.5. Limitations on Indebtedness. Except as approved in writing
by the holders of a majority in principal amount of the Notes outstanding, the
Company will not, and will not permit any Subsidiary to, create, assume or incur
any Indebtedness except:
(a) Indebtedness evidenced by the Notes;
(b) Indebtedness not to exceed $7,500,000 under the Liquidity
Facility;
(c) Indebtedness of the Company outstanding as of the date of this
Agreement and listed on Schedule 5.5 hereto;
(d) Indebtedness relating to insurance premium financing or in
respect of workers' compensation claims, in each case incurred in the ordinary
course of business;
(e) Future Indebtedness between a Subsidiary, if any, and the
Company or between Subsidiaries in amounts not to exceed $100,000 in the
aggregate; and
(f) Indebtedness up to $2,500,000 (exclusive of equipment leases
disclosed in the Schedules to this Agreement) under equipment leases.
In no event will the Company or any Subsidiary incur or allow to exist
Indebtedness that is in any respect senior to or pari passu with the Notes,
except as expressly and explicitly provided in Section 4.5 of this Agreement.
Section 5.6. Limitation on Liens. Except as otherwise expressly and
explicitly provided in Section 4.5 of this Agreement, the Company will not, and
will not permit any Subsidiary to, create, incur, assume or suffer to exist any
Liens on its Stock or the Collateral. Notwithstanding this provision, the
Company shall be permitted to contest in good faith bona fide disputed tax
amounts (not to exceed $50,000 in the aggregate) with taxing authorities upon
advance written notice to the holders of the Notes, provided that the Company
also so delivers to the holders of the Notes a Certificate, signed by the Chief
Financial Officer of the Company, confirming that such contest is in good faith
and is a bona fide dispute.
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Section 5.7. Restricted Payments. The Company will not, and will not
permit any Subsidiary, to make any distribution or declare or pay any dividends
(in cash or other property, other than capital Stock) on, or purchase, redeem or
otherwise retire any of the Company's or any of its Subsidiaries' capital Stock,
whether now or hereafter outstanding, except any Subsidiary may declare and pay
dividends or other distributions to, or purchase, redeem or otherwise retire any
capital Stock from, the Company or any Subsidiary; provided, however, that this
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restriction shall not apply to the repurchase of shares of Common Stock (in an
aggregate amount not to exceed $500,000 plus the aggregate exercise price
hereafter received by the Company for all options granted under the plans
referred to in (i) and (ii) below which are exercised after the date hereof)
from current or former employees, officers, directors, consultants or other
persons performing services for the Company pursuant to either (i) the Company's
Stock Option Plans or (ii) the 1995 Stock Repurchase Agreements between the
Company and, respectively, Douglas Reudink and Tom Huseby; provided that no such
repurchases may be made while any Event of Default or Default exists under this
Agreement, the Notes or the Security Agreement.
Section 5.8. Mergers, Consolidations and Sales of Assets. Other than in
accordance with Section 2.4, the Company will not, and will not permit any
Subsidiary to (1) consolidate with or be a party to a merger with any other
corporation (except that if no Default or Event of Default exists hereunder,
under the Notes or under the Security Agreement, the Company, subject to the
other provisions of this Agreement, may make acquisitions of businesses for fair
value as determined in good faith by its Board of Directors), (2) sell, lease or
otherwise dispose of all or a material part of the assets of the Company or any
of its Subsidiaries, or (3) issue any securities or any rights or options to
purchase securities for less than fair value as determined in good faith by the
Board of Directors; provided, however, that provided that the rights of the
holders of the Notes, the Warrants and the Preferred Shares are not prejudiced:
(a) any Subsidiary may merge or consolidate with or into the
Company or any other Subsidiary; and
(b) any Subsidiary may sell, lease or otherwise dispose of its
assets, or issue securities, to the Company or any Subsidiary.
Section 5.9. Transactions with Affiliates. Without the written approval
of the holders of the majority in principal amount of the outstanding Notes, the
Company will not, and will not permit any Subsidiary to, enter into any
transaction (or series of related transactions) (a "Transaction") with any
holder (or any Affiliate of such holder) of 2% or more of any class of capital
Stock of the Company or with any Affiliate of the Company, involving payments by
the Company or any Subsidiary (including, without limitation, any sale,
purchase, lease or loan or any other direct or indirect payment, transfer or
other disposition) in excess of $1,000,000 in the aggregate, other than the
following Transactions:
(a) transactions between or among the Company and its Subsidiaries
or between or among such Subsidiaries;
(b) transactions the terms of which are at least as favorable as
the terms that could be obtained by the Company or such Subsidiary, as the case
may be, in a comparable transaction made on an arm's-length basis between
unaffiliated parties (in each case as determined in good faith by a majority of
the directors of the Company unaffiliated with such holder or Affiliate);
(c) transactions in which the Company or any Subsidiary delivers
to the holders of the Notes a written opinion of an independent nationally
recognized investment banking firm stating that such Transaction is fair to the
Company or such Subsidiary from a financial point of view;
(d) the performance by the Company of its obligations hereunder
and under the Notes, the Warrants and the Security Agreement;
(e) the payment consistent with past practice of reasonable and
customary compensation or fees (including, without limitation, options or
related stock appreciation rights or similar securities issued pursuant to any
Stock Based Plan) to officers, directors, and employees of the Company or any of
its Subsidiaries, in each case as determined by the Company's Board of Directors
in good faith;
(f) purchases (for equal to or less than fair value) or sales (for
equal to or more than fair value) of goods and services made in the ordinary
course of business;
(g) transactions permitted by, and complying with, the provisions
of Section 5.7 hereof;
(i) the sale to stockholders of the Company existing as of
the date of this Agreement of Stock in no respect senior to or having rights
relatively greater or relatively more favorable than the Preferred Shares,
unless all of the proceeds thereof are promptly used to redeem outstanding
Notes.
Section 5.10. Financial Statements, etc. The Company shall deliver to the
holders of the Notes as soon as available, but in any event within 30 days after
the end of each of the first three quarters during each of the Company's fiscal
years, a company prepared balance sheet, income statement, and statement of cash
flow covering the Company's operations during such period; and (b) as soon as
available, but in any event within 90 days after the end of each of the
Company's fiscal years, financial statements of the Company for each such fiscal
year, audited by independent certified public accountants. Such audited
financial statements shall include a balance sheet, profit and loss statement,
and statement of cash flow and, promptly after receipt and if prepared, such
accountants' letter to management. All such financial statements shall be
consolidated to the extent required by GAAP.
Section 5.11. Board Representation. If an Initial Public Offering shall
not have been completed by the fifteen (15) month anniversary of the Closing
Date, the Company shall cause all things necessary to occur in order to elect to
the Board of Directors of the Company one director nominated by the holders of a
majority of the outstanding Notes for a term to end upon the completion of an
Initial Public Offering.
Section 5.12. Indemnification. The Company shall indemnify the Purchasers
and all subsequent holders of Notes, Warrants or Preferred Shares (the
"Indemnified Parties") for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever, including without limitation reasonable legal
fees and disbursements (collectively, "Damages") which may be imposed on,
incurred by or asserted against the Indemnified Parties in any way relating to
or arising out of this Agreement, the Security Agreement, the Notes, the
Warrants, the Preferred Shares or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby and
thereby (including, without limitation, the costs and expenses of counsel for
the Indemnified Parties), except for Damages to the extent solely resulting from
the Purchaser's bad faith or willful misconduct.
Section 5.13. Subsidiary. The Company agrees that its shall not directly
or indirectly create, or directly or indirectly own any interest in, any
Subsidiary unless the holders of the Notes shall have received from each
Subsidiary, at such time as such Subsidiary is created or is in any manner
directly or indirectly owned or controlled by the Company, a written,
irrevocable and unconditional guaranty (joint and several with the Company and
all other Subsidiaries) of all of the Company's obligations (payment and
performance) under the Notes, under the Security Agreement and under this
Agreement, in form and content satisfactory to a majority of the holders of the
Notes.
Section 5.14. Covenants. The Company covenants and represents that (i) no
Stock shall be issued by the Company which is, directly or indirectly, senior to
the Warrant Shares or has, directly or indirectly, any dividend, liquidation,
dilution protection, redemption, conversion or other rights or privileges (by
contract, charter, by-laws, or otherwise) which are relatively more favorable
than those presently existing with respect to the Warrant Shares, unless all of
the proceeds thereof are promptly used to redeem outstanding Notes and (ii) no
Preferred Stock will be issued by the Company unless the cash purchase price
therefor is equal to or greater than the
liquidation and redemption right and preference of such Preferred Stock, unless
all of the proceeds thereof are promptly used to redeem outstanding Notes.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for more
than 5 Business Days; or
(b) Default shall occur in the making of any payment of principal
of any Note at the maturity date or at any date fixed for redemption or
prepayment; or
(i) Default shall occur in the observance or performance of
any other provision of this Agreement, the Notes, the Warrants or the Security
Agreement which is not remedied within 30 days after the date on which written
notice thereof is given to the Company by the holders of a majority in aggregate
outstanding principal amount of the outstanding Notes, or
(ii) Any judgment or order for the payment of money shall be
rendered against the Company or a Material Subsidiary of the Company by a court
of competent jurisdiction and shall not be discharged or stayed within 60 days,
and the amount thereof that is not directly covered by letters of credit or a
bond shall be in excess of $100,000 and either (i) an enforcement proceeding
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 30 consecutive days, after written notice has been
given to the Company by the holders of at least 25% in aggregate outstanding
principal amount (together with accrued and unpaid interest thereon) of the
outstanding Notes, during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect, or
(iii) A default occurs which extends beyond any period of
grace applicable thereto under any mortgage, indenture or other instrument under
which there may be issued any Indebtedness of the Company or any Material
Subsidiary of the Company for borrowed money having, with respect to all such
Indebtedness, outstanding principal amounts of $500,000 or more in the
aggregate, whether such Indebtedness now exists or shall hereafter be created,
if either (i) such default results from the failure to pay principal upon the
final maturity of such Indebtedness or (ii) as result of such event of default
such Indebtedness has been declared to be due and payable prior to its stated
maturity; provided, however, that if such default shall be remedied or cured or
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waived by the holders of such Indebtedness, then the Event of Default hereunder
by reason thereof shall be deemed to have been thereupon remedied, cured or
waived without further action on the part of the holders of the Notes, or
A. Any default or adverse event occurs with respect to
or affecting any of the Collateral (except as expressly provided in Section 5.6
of this Agreement and
paragraphs 5, 6 and 13 of the Closing Certificate), and same is not cured or
discharged within 30 days thereof, or
B. Any event allowing or resulting in the redemption,
call, put or use of the liquidation preference of any series or class (now
existing or hereafter created) of the Company's or a Subsidiary's preferred
stock shall have occurred, or
C. Any event of default or default shall have occurred
under the Liquidity Facility or any other material agreement of the Company or
any Material Subsidiary, and same is not timely cured or results in a right of
acceleration thereunder which is not waived, or
(c) The Company or any Material Subsidiary becomes (I) insolvent
or is generally not paying its debts as they become due and such situation is
not remedied within 45 days or (II) makes an assignment for the benefit of
creditors, or the Company or any Material Subsidiary applies for or consents to
the appointment of a custodian, trustee, liquidator, or receiver for the Company
or such Subsidiary or for the major part of the property of either, or
(d) A custodian, trustee, liquidator, or receiver is appointed for
the Company or any Material Subsidiary or for the major part of the property of
either and is not discharged within 45 days after such appointment, or
(e) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or similar law
or laws for the relief of debtors, are instituted by or against the Company or
any Material Subsidiary and, if instituted against the Company or any Material
Subsidiary, are consented to or are not dismissed within 45 days after such
institution.
Section 6.2. Notice to Holders. When the Company has knowledge that any
Default or Event of Default described in the foregoing Section 6.1 has occurred,
the Company agrees to give notice to the holders of the outstanding Notes within
one Business Day of the date on which the Company becomes aware of such Event of
Default.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraphs (a) through (h), inclusive, of Section 6.1 has happened
and is continuing, the holder or holders of 25% or more of the principal amount
of outstanding Notes may, by notice to the Company, declare the entire principal
and all interest accrued and unpaid, if any, on all Notes to be, and all Notes
shall thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived. When any Event of Default described in paragraphs (i) through (k) of
Section 6.1 has occurred, then the principal amount of all outstanding Notes
(together with accrued and unpaid interest, if any) shall immediately become due
and payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay in cash to the holders of the Notes the entire
principal amount and interest accrued and unpaid, if any, on the Notes. No
course of dealing on the part of any Noteholder nor any delay or failure on the
part of any Noteholder to exercise any right shall
operate as a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement relating to the Notes (and not affecting the
Warrants or the Preferred Shares) may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the Company
shall have obtained the consent in writing of the holders of at least a majority
in aggregate principal amount of outstanding Notes; provided that without the
written consent of the holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be effective (a) that will
change the time of payment of the principal of or the interest on any Note or
reduce the principal amount thereof of change the rate or interest thereon or
(b) that will change the percentage of holders of the Notes required to consent
to any such amendment, modification or waiver of any of the provisions of this
Agreement.
Section 7.2. Solicitation of Noteholders. Executed or true and correct
copies of any waiver effected pursuant to the provisions of Section 7.1 shall be
delivered by the Company to each holder of outstanding Notes forthwith following
the date on which the same shall have been executed and delivered by the holder
or holders of the requisite percentage of outstanding Notes,
Section 7.3. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the holders of the Notes and shall be binding upon
them, upon each future holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT, DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
(a) "Affiliate" shall mean any Person (a) that directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, any other Person or (b) is an officer, director or
employee of any such Affiliate or (c) is a member of the immediate family of any
of the foregoing. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by contract
or otherwise.
(b) "Board of Directors " shall mean, with respect to any Person,
the Board of Directors of such Person or any committee of the Board of Directors
authorized to act for it hereunder.
(c) "Business Day" shall mean any day other than a Saturday,
Sunday, statutory holiday or other day on which banks in New York City are
required by law to close or are customarily closed.
(d) "Change of Control" shall mean the occurrence of (x) any
consolidation or merger of the Company with or into any other corporation or
other entity or person (whether or not the Company is the surviving
corporation), or any other corporate reorganization or transaction or series of
related transactions in which in excess of 50% of the Company's voting power is
transferred through a merger, consolidation, tender offer or similar
transaction, or (y) an event whereby any person (as defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), together
with its affiliates and associates (as such terms are defined in Rule 405 under
the Securities Act, beneficially owns or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of 50% of the Company's voting power, or (z) in
excess of 50% of the Company's Board of Directors consists of directors not
nominated by the prior Board of Directors of the Company.
(e) "Closing Date" shall have the meaning provided in Section 1.2.
herein.
(f) "Collateral" shall mean all assets of every kind and nature,
both tangible and intangible, of the Company and its Subsidiaries, other than
real estate.
(g) "Company" shall mean Metawave Communications Corporation, a
Delaware corporation.
(h) "Default" shall mean any event or condition, the occurrence of
which would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default as defined in Section 6.1.
(i) "ERISA " shall mean the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
(j) "Event of Default" shall have the meaning set forth in Section
6.1 hereof.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
(l) "Existing Stockholder" means the stockholders of the Company
on the date hereof (as listed on Schedule 8.1) and the Related Persons of such
stockholders.
(m) "GAAP" shall mean generally accepted accounting principles in
the United States as in effect on the date of this Agreement and not including
any interpretations or regulations that have been proposed but that have not
been enacted.
(n) "Indebtedness" means, without duplication, as to any Person or
Persons: (i) indebtedness for borrowed money; (ii) indebtedness for the
deferred purchase price of property or services; (iii) indebtedness evidenced by
bonds, debentures, notes or other similar instruments; (iv) obligations and
liabilities secured by a Lien upon property owned by such Person, whether or not
owing by such Person and even though such Person has not assumed or become
liable for the payment thereof; (v) Indebtedness directly or indirectly
guaranteed by such Person; (vi) obligations or liabilities created or arising
under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person; (viii) obligations of
such Person as Lessee under capital leases; (ix) net liabilities of such Person
under hedging agreements and foreign currency exchange agreements, as calculated
on a basis satisfactory to the Purchasers and in accordance with accepted
practice; (x) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit; (xi) all obligations of such
Person in respect of bankers' acceptances; and (xii) obligations with respect to
equipment leases.
(o) "Initial Public Offering" shall mean the closing of a public
offering of the Company's Common Stock pursuant to an effective registration
statement under the Securities Act.
(p) "Interest Note" shall have the meaning specified in Section 1.1 of
this Agreement.
(q) "Interest Rate" shall have the meaning provided under Section 1.1
of this Agreement.
(r) "Lien" shall mean any lien (statutory or otherwise) security
interest, mortgage, deed of trust, pledge, charge, conditional sale, title
retention agreement, capital lease or other encumbrance or similar right of
others, contingent or otherwise, or any agreement to give any of the foregoing.
(s) "Liquidity Facility" shall mean obligations for borrowed money not
to exceed $7,500,000 in the aggregate to Imperial Bank under a Loan Agreement
dated October 14, 1997, as same may be amended from time to time in a manner not
inconsistent with the terms of this Agreement.
(t) "Material Subsidiary" shall mean a Subsidiary of the Company that
is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
promulgated under the Securities Act.
(u) "Note" shall have the meaning provided in Section 1.1 of this
Agreement.
(v) "Note Register" shall have the meaning provided in Section 9.1 of
this Agreement.
(w) "Note Registrar" shall have the meaning provided in Section 9.1 of
this Agreement.
(x) "Notice" shall have the meaning provided in Section 1.3 of this
Agreement.
(y) "Noteholder" shall mean any of the holders of one or more Notes
from time to time.
(z) "Officer" shall mean the Chairman of the Board, the President,
any Vice President, the Treasurer, the Secretary or the Controller of any
Person.
(aa) "Person" shall mean an individual. partnership, corporation,
trust or unincorporated organization, and a government or agency or political
subdivision thereof.
(bb) "Purchase Price" with respect to any Note shall mean the Purchase
Price thereof, expressed as a percentage of the principal amount thereof and as
an amount in U.S. dollars, as set forth on Schedule I attached hereto.
(cc) "Purchaser" shall mean the Persons listed under Schedule I
attached hereto.
(dd) "Related Person" shall mean, with respect to any Person, (A) an
Affiliate of such Person, (B) any investment manager, investment advisor or
general partner of such Person, and ( ) any investment fund, investment account
or investment entity whose investment manager, investment advisor or general
partner is such Person or a Related Person of such Person.
(ee) "Securities Act" shall have the same meaning as in Section
3.2(g).
(ff) "Security Agreement" means the security agreement in the form
attached hereto as Exhibit E.
(gg) "Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, or any other "equity security" (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under
the Exchange Act).
(hh) "Stock Based Plan" means any stock option plan, stock
appreciation rights plan or other similar plan or supplement relating to capital
Stock of the Company or any of its Subsidiaries, whether in effect on the date
hereof or established hereafter, established for the benefit of employees of the
Company or of any Subsidiary of the Company.
(ii) "Subsidiary " shall mean, as to any particular parent
corporation, any corporation, partnership, limited liability company, business
trust or other entity of which more than 50% (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more corporations
which are themselves Subsidiaries of such parent corporation.
(jj) "Transaction" shall have the meaning provided under Section 5.9
herein.
(kk) "Voting Stock" shall mean securities of any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
SECTION 9. MISCELLANEOUS.
Section 9.1. Note Register. The Company or the Company's transfer agent (if
any), in its capacity as note registrar (the "Note Registrar"), shall cause to
be kept a register (the "Note Register") for the registration and transfer of
the Notes; provided, however, the Company may at any time upon prior written
notice to the Purchasers designate and cause any other Person to act as the Note
Registrar in order to maintain the Note Register pursuant to the terms of this
Note Agreement. The Note Registrar will register or transfer or cause to be
registered or transferred, as hereinafter provided and under such reasonable
regulations as it may prescribe, any Note issued pursuant to this Agreement.
At any time, and from time to time, the holder of any Note which has been
duly registered as hereinabove provided may transfer such Note upon surrender
thereof with the Note Registrar duly endorsed or accompanied by a written
instrument of transfer duly executed by the holder of such Note or its attorney
duly authorized in writing.
Promptly upon request of a Noteholder, the Company shall provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as is necessary in order to permit compliance
with the information requirements of Rule 144A(d)(4) under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to and is in compliance with the reporting requirements of Section 13 or
15(d) of the Exchange Act. For purposes of this paragraph, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.
The Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium and interest, if any, on any
Note shall be made to or upon the written order of such holder.
Section 9.2. Exchange of Notes. At any time and from time to time, upon not
less than five (5) Business Days' notice given by the holder of any Note
initially delivered or of any Note substituted therefor pursuant to Section 9.1,
this Section 9.2 or Section 9.3, and, upon surrender of such Note at its office,
the Company will deliver in exchange therefor, without expense to the holder,
except as set forth below, Notes for the same aggregate principal amount
(together with accrued but unpaid interest) as the then unpaid principal amount
(together with accrued but unpaid interest) of the Note so surrendered, dated as
of the date to which interest has been paid on the Note so surrendered or, if
such surrender is prior to the payment of any interest thereon, then dated as of
the date of issue, registered in the name of such Person or Persons as may be
designated by such holder, and otherwise of the same form and tenor as the Notes
so surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft, or destruction
upon delivery of an indemnity in such form as shall be reasonably satisfactory
to the Company, or in the event of such mutilation upon surrender and
cancellation of any Note, the Company will make and deliver without expense to
the holder thereof, a new Note, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Note.
Section 9.4. Powers and Rights Not Waived; Remedies Cumulative. No delay
or failure on the part of the holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the holder
of any Note are cumulative to and are not exclusive of any rights or remedies
any such holder would otherwise have, and no waiver or consent, given or
extended pursuant to Section 7 hereof or otherwise, shall extend to or affect
any obligation or right not expressly waived or consented to.
Section 9.5. Notices. All communications provided for hereunder shall be
in writing and, if to any Purchaser, delivered or mailed by prepaid overnight
air courier, or by facsimile communication, in each case addressed to such
Purchaser at its address appearing on Schedule I to this Agreement or such other
address as such Purchaser or subsequent holder may designate to the Company in
writing, and if to the Company, delivered and mailed by prepaid overnight air
courier, or by facsimile communication, in each case to the Company at 8700
148th Avenue N.E., Redmond, Washington 98052; facsimile: (425) 702-5978,
Attention: Chief Financial Officer and General Counsel or to such other address
as the Company may in writing designate to such Purchaser or subsequent holder;
provided, however, that a notice sent by overnight air courier shall only be
effective if delivered at a street address designated for such purpose in
Schedule 1, and a notice to such Purchaser by facsimile communication shall only
be effective if confirmed by a copy thereof by prepaid overnight air courier, in
either case, as such Purchaser or a subsequent holder of any Note may designate
to the Company in writing.
Section 9.6. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to each
Purchaser's benefit and to the benefit of its successors and assigns, including
each successive holder or holders of any Notes.
Section 9.7. Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Purchasers and the Company, and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Should any part of this Agreement for any reason be declared
invalid or unenforceable, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid or unenforceable portion
thereof eliminated (or, if possible, rewritten to the extent necessary to
eliminate such invalidity or unenforceability) and it is hereby declared the
intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.8. Like Treatment of Holders. Neither the Company nor any of
its Affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for redemptions or
exchanges of Notes, or otherwise, to any holder of any Notes, for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of the Notes or this Agreement or the
Warrants, unless such consideration is required to be paid to all holders of
Notes bound by such consent, waiver or amendment whether or not such holders so
consent, waiver or agree to amend and whether or not such holders tender their
Notes for redemption or exchange. The Company shall not, directly or
indirectly, redeem any Notes unless such offer of redemption is made pro rata to
all holders of Notes on identical terms.
Section 9.9. Governing Law. This Agreement and the notes and warrants
issued and sold hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of New York, as applied to contracts made
and performed entirely within the State of New York. Each party hereto hereby
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York or the State Courts of New York sitting in New
York County for purposes of all legal proceedings arising out of or relating to
this Agreement and the notes or the transactions contemplated hereby. Each
party hereto irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. If any
provision of this agreement is determined to be unenforceable under the laws of
the State of New York, and if such provision would be enforceable under the laws
of the State of Washington, then it is agreed that the Courts of the State of
New York shall interpret and enforce such provision pursuant to the laws of the
State of Washington.
Section 9.10. Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
Section 9.11. Brokerage Fees. BT Alex. Brown Incorporated has acted as
agent for the Company in connection with the transactions contemplated hereby
and is being paid a commission by the Company pursuant to a separate letter
agreement.
Section 9.12. Intentionally Left Blank.
Section 9.13. Possible Future Notes. If the Company's revenues, expenses,
cash flow and other material financial projections for the year ending December
31, 1998 are within ten percent of the revenues, etc. projected in the projected
budget provided to and accepted in writing by the Purchasers prior to the date
hereof, and if in the Purchasers' judgment neither the Company nor any
---
Subsidiary, if any, has experienced or is likely to experience an event
materially adverse to the profits, revenues, prospects, operations or condition
of the Company or such Subsidiary, and if the Purchasers are otherwise satisfied
---
with the adequacy of the Collateral,
and if no Default or Event of Default then exists hereunder or under the
- ---
Warrants or the Security Agreement, and if the representations and warranties
---
made by the Company herein are true and correct on and as of December 31, 1998
and on and as of each day thereafter until the completion of the new purchase
referred to below, and if the Company has not yet completed an Initial Public
---
Offering, and if the Company has not exercised or expressed its intention to
---
exercise its redemption and repurchase right under Section 1.4 hereof, then, if
and only if the Company so chooses, the Purchasers will purchase from the
Company (assuming all the conditions of this Section 9.13 are satisfied), and
the Company will sell to the Purchasers as soon as reasonably practicable after
the later of April 28, 1999 or the date the Purchasers receive the Company's
audited financial statements for the year ended December 31, 1998, and using
documents substantially similar to those used in these transactions, up to an
additional $8 million in aggregate principal amount of new Notes; provided such
--------
new Notes will in all respects (except for the accrual and payment of interest
between April 28, 1998 and the actual date of their issuance, which accrual and
payment shall be suspended through the date of such issuance) be treated as if
they had been issued on April 28, 1998. For example, on the 12 month anniversary
of the Closing Date, such new Notes would experience a 200 basis point increase
in the Base Interest Rate. Additional Warrants to purchase 148,276 additional
Preferred Shares (as the same may be adjusted from the date hereof under the
terms of the Warrants) shall be issued in respect of such new Notes, such
Warrants to be dated the Closing Date. Should any dispute arise as to the
meaning, intention or interpretation of any term or provision of this Section
9.13, the determination thereof by MacKay-Shields Financial Corporation shall be
final and binding on all parties to this Agreement. The Company acknowledges and
agrees that it shall be bound by any such determination of MacKay-Shields
Financial Corporation; or if the Company does not agree with such determination,
it shall have the right, as its sole and exclusive remedy, to treat all (but not
less than all) of the terms and provisions of this Section 9.13 as null and void
and of no force and effect. Any action by the Purchasers, or any exercise by the
Purchasers of their judgment or requiring the Purchasers to be satisfied, under
this Section 9.13 shall require the consent of all of the Purchasers.
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
METAWAVE COMMUNICATIONS CORPORATION,
as Company
By: /s/ Vito Palermo
---------------------------------
Name: Vito Palermo
Title: Chief Financial Officer
[signature pages continued on next page]
Wiring Instruction to Company:
CITIBANK
111 Wall Street
New York, NY 10005
ABA# 021000089
FOR CREDIT TO:
Morgan Stanley & Co., Inc.
Account #3889-0774
FOR FURTHER CREDIT TO:
ACCOUNT NAME: METAWAVE COMMUNICATIONS
-----------------------
MORGAN STANLEY ACCOUNT: 14-78607
--------
THE BROWN & WILLIAMSON MASTER
RETIREMENT TRUST
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
THE MAINSTAY FUNDS, ON BEHALF OF
ITS STRATEGIC INCOME FUND SERIES
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
HIGHBRIDGE CAPITAL CORPORATION
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
----------------------------------------
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
THE MAINSTAY FUNDS, ON BEHALF OF
ITS HIGH YIELD CORPORATE BOND FUND SERIES
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
_____________________________
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
MAINSTAY VP SERIES FUND INC. ON BEHALF OF ITS HIGH
YIELD CORPORATE BOND PORTFOLIO
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By:/s/ Jeffry B. Platt
____________________________
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
POLICE OFFICERS PENSION SYSTEM OF THE CITY OF HOUSTON
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By:/s/ Jeffry B. Platt
_____________________________
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
VULCAN MATERIALS COMPANY HIGH YIELD ACCOUNT
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By:/s/ Jeffry B. Platt
________________________________
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
THE 1199 HEALTH CARE EMPLOYEES PENSION FUND
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By:/s/ Jeffry B. Platt
______________________________
Name: Jeffry B. Platt
Title: Director
[signature pages continued on next page]
BT HOLDINGS (NY), INC.
By:/s/ Edward Burdick
____________________________
Name: Edward Burdick
Title: Vice President
[signature pages continued on next page]
IMPERIAL BANK
By:/s/ Jim Ellison
_____________________________
Name: Jim Ellison
Title: Senior Vice President
[signature pages continued on next page]
POWERWAVE TECHNOLOGIES, INC.
By:/s/ Bruce C. Edwards
___________________________________________
Name: Bruce C. Edwards
Title: President and Chief Executive Officer
[signature pages continued on next page]
BANKAMERICA INVESTMENT CORPORATION
By:/s/ C. Richard Schuler
_____________________________
Name: C. Richard Schuler
Title: Attorney-in-Fact
[signature pages continued on next page]
SCHEDULE I TO NOTE AGREEMENT
Purchaser: THE BROWN & WILLIAMSON MASTER RETIREMENT TRUST
1. Principal Amount $500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 0 1 1000028
STATE STREET BANK AND TRUST COMPANY
BOSTON, MASS 02101
FOR CREDIT TO:
ACCT NAME: BROWN & WILLIAMSON MASTER RETIREMENT
TRUST
DDA # 09237520
ACCT # ZH23
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
CHASE BANK
ACO: STATE STREET BANK & TRUST COMPANY
4 NEW YORK PLAZA
GROUND FLOOR RECEIVING WINDOW
NEW YORK, NEW YORK 10004
ACCT. NO.: ZH23
ACCT. NAME: BROWN & WILLIAMSON
MASTER RETIREMENT TRUST
4. All communications shall be delivered or mailed to:
The Brown & Williamson Master Retirement Trust
c/ o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 043216086
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Iceship & Co.
Purchaser: THE MAINSTAY FUNDS, ON BEHALF OF ITS STRATEGIC INCOME FUND SERIES
1. Principal Amount $155,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $155,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 021000018
BANK OF NEW YORK/CUST.
GLA 11 1612
FOR CREDIT TO:
ACCT NAME: MAINSTAY STRATEGIC INCOME FUND
ACCT # 267451
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
BANK OF NEW YORK
ONE WALL STREET - 3RD FLOOR
WINDOW A
NEW YORK, NEW YORK 10286
FOR CREDIT TO:
ACCT. NAME: MAINSTAY STRATEGIC FUND
ACCT. # 267451
4. All communications shall be delivered or mailed to:
The Mainstay Funds, on behalf of its Strategic Income Fund Series
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 133924140
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Hare & Co.
Purchaser: HIGHBRIDGE CAPITAL CORPORATION
1 Principal Amount $1,900,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $1,900,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 021-000-089
BEAR STEARNS SECURITIES INC.
ACCT # 09253186
ACCT NAME: HIGHBRIDGE CAPITAL CORPORATION
ACCT # 101-44079-2-6
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
NSCCNY WINDOW
55 WATER STREET, CONCOURSE LEVEL, SOUTH BUILDING
ACCT: BEAR STEARNS
FOR FURTHER CREDIT TO: HIGHBRIDGE CAPITAL CORPORATION
ACCT. NO. 101-44079-2-6
4. All communications shall be delivered or mailed to:
Highbridge Capital Corporation
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: Bear Stearns Securities Corp.-Foreign (no tax i.d.#)
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Bear Stearns Securities
Corp.
Purchaser: THE MAINSTAY FUNDS, ON BEHALF OF ITS HIGH YIELD CORPORATE BOND FUND
SERIES
1. Principal Amount $8,870,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $8,870,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 0 1 1000028
STATE STREET BANK AND TRUST COMPANY
BOSTON, MASS 02101
FOR CREDIT TO:
ACCT NAME: MAINSTAY HIGH YIELD CORPORATE BOND FUND
DDA # 4266 0761
ACCT # SNO4
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
CHASE BANK
A/C STATE STREET BANK AND TRUST COMPANY
4 NEW YORK PLAZA
GROUND FLOOR/RECEIVE WINDOW
NEW YORK, NEW YORK 10004
FOR CREDIT TO:
ACCT. NAME: MAINSTAY HIGH YIELD CORPORATE BOND FUND
ACCT. # SN04
4. All communications shall be delivered or mailed to:
The Mainstay Funds, on behalf of its High Yield
Corporate Bond Fund Series
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D.#: 04-2910780
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Daffodil & Co.
Purchaser: MAINSTAY VP SERIES FUND, INC., ON BEHALF OF HIGH YIELD CORPORATE BOND
PORTFOLIO
1. Principal Amount $2,500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $2,500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 021000018
BANK OF NEW YORK/CUST.
GLA 11 1612
FOR CREDIT TO:
ACCT NAME: MAINSTAY V.P. SERIES HIGH YIELD
CORPORATE BOND FUND
ACCT # 274467
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
BANK OF NEW YORK
1 WALL STREET
3RD FLOOR, WINDOW A
ACCT. NO. 274467
ACCT. NAME: MAINSTAY VP SERIES HIGH YIELD CORPORATE BOND FUND
[NOTIFY: SYLVIA ORTIZ]
4. All communications shall be delivered or mailed to:
Mainstay VP Series Fund, Inc., on behalf of High Yield
Corporate Bond Portfolio
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 13-3818793
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Hare & Co.
Purchaser: POLICE OFFICERS PENSION SYSTEM OF THE CITY OF HOUSTON
1. Principal Amount $500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 071-000-152
NORTHERN TRUST/CHGO TRUST
FOR CREDIT TO:
ACCT # 5186061000
ACCT NAME: POLICE OFFICERS PENSION SYSTEM OF THE
CITY OF HOUSTON
ACCT # 26-41113
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
NORTHERN TRUST COMPANY
40 BROAD STREET
8TH FLOOR
NEW YORK, NEW YORK 10004
ACCT. NO. 26-41113
ACCT. NAME: POLICE OFFICERS PENSION SYSTEM OF THE
CITY OF HOUSTON
NOTIFY: GLEN JOHNSON
4. All communications shall be delivered or mailed to:
Police Officers Pension System of the City of Houston
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 74-6036541
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Booth & Co.
Purchaser: VULCAN MATERIALS COMPANY HIGH YIELD ACCOUNT
1. Principal Amount $75,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $75,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 071-000-152
NORTHERN TRUST/CHGO TRUST
FOR CREDIT TO:
ACCT # 5186061000
ACCT NAME: VULCAN MATERIALS
ACCT # 22-00065
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
NORTHERN TRUST COMPANY
40 BROAD STREET
8TH FLOOR
NEW YORK, NEW YORK 10004
ACCT. NO. 22-00065
ACCT. NAME: VULCAN MATERIALS
NOTIFY: GLEN JOHNSON
4. All communications shall be delivered or mailed to:
Vulcan Materials Company High Yield Account
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 751867619
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Booth & Co.
Purchaser: THE 1199 HEALTH CARE EMPLOYEES PENSION FUND
1. Principal Amount 1,500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $1,500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 071-000-152
NORTHERN TRUST/CHGO TRUST
FOR CREDIT TO:
ACCT # 5186061000
ACCT NAME: LOCAL 1199 HEALTHCARE
ACCT # 26-44894
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
NORTHERN TRUST COMPANY
40 BROAD STREET
8TH FLOOR
NEW YORK, NEW YORK
ACCT. NO. 26-44894
ACCT. NAME: 1199 HEALTH CARE FUND
NOTIFY: GLEN JOHNSON
4. All communications shall be delivered or mailed to:
The 1199 Health Care Employees Pension Fund
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
Attn: Steven Tananbaum
Fax: (212) 758-4735
with a copy to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Attn: Fredric A. Kleinberg, Esq.
Fax: (212) 986-8866
5. Tax I.D. #: 13-3604862
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of Booth & Co.
Purchaser: IMPERIAL BANK
1. Principal Amount $2,000,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $2,000,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 122201444
IMPERIAL BANK
FOR CREDIT TO:
ACCT NAME: IMPERIAL BANK
ACCT # 736000021
ATTN: DONALD ROBERTS RE: METAWAVE
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
Imperial Bank
Attn.: Etta Tucker #2560
9920 La Cienega Bl. #628
Inglewood, CA 90301
Fax: 310-338-6110
with a copy to:
Imperial Bank
777 108th Avenue NE
Bellevue, Washington 98004-6672
Attn: Jim Ellison
Senior Vice President
Fax: (425) 454-6224
4. All communications shall be delivered or mailed to:
Imperial Bank
777 108th Avenue NE
Bellevue, Washington 98004-6672
Attn: Jim Ellison
Senior Vice President
Fax: (425) 454-6224
with a copy to:
Imperial Bank
Attn: Donald Roberts
226 Airport Parkway
San Jose, CA 95110
Fax: (408) 451-8524
5. Tax I.D. #: 95-2247354
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of [______________________
______________________] (if other than Purchaser).
Purchaser: POWERWAVE TECHNOLOGIES, INC.
1. Principal Amount $2,500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $2,500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
---- --------
each payment as to issuer, security and principal or interest) to:
ABA # 121000358
BANK OF AMERICA NT&SA
SAN FRANCISCO, CALIFORNIA
FOR CREDIT TO:
ACCT NAME: POWERWAVE TECHNOLOGIES, INC.
ACCT # 09326-00675
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to Purchaser at its address provided below.
4. All communications shall be delivered or mailed to:
Powerwave Technologies, Inc.
2026 McGaw Avenue
Irvine, California 92614
Attn: Kevin Michaels
Fax: (714) 757-6675
with a copy to:
5. Tax I.D. #: 11-2723423
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of [______________________
______________________] (if other than Purchaser).
Purchaser: BT HOLDINGS (NY), INC.
1. Principal Amount $4,500,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $4,500,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
each payment as to issuer, security and principal or interest) to:
ABA # 021 001 033
Bankers Trust Co.
FOR CREDIT TO: BT Holdings (NY), Inc.
ACCT # 01-418-767
ACCT NAME: Ref: Metawave
Profit Center 808425
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
BT Alex Brown Inc.
14 Wall Street, 7th Floor
New York, New York 10005
Attn: Fran Lombardi
Ref: Metawave Communications Corporation (Acct. No.: 215 69 001)
4. All communications shall be delivered or mailed to:
BT Holdings (NY), Inc.
c/o Bankers Trust Corp.
130 Liberty Street, 29th Floor
New York, New York 10006
Attn: Christine Barbella-Foggia
Phone: 212-250-6751
Fax: 212-669-1502
5. Tax I.D. #: 13-3311934
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of BT Alex Brown Inc.
Purchaser: BANKAMERICA INVESTMENT CORPORATION
1. Principal Amount $4,000,000.00 (in U.S. Dollars).
The Purchase Price of the Note will be $4,000,000.00
2. In the case of cash payments on account of the Notes:
By wire transfer of Federal or other immediately available funds (identifying
each payment as to issuer, security and principal or interest) to:
BANK OF AMERICA ILLINOIS
231 SOUTH LASALLE STREET
CHICAGO, IL 60697
ABA # 071-000-039
A/C NAME: BANKAMERICA INVESTMENT CORP.
DDA ACCOUNT # 72-50967
REF: METAWAVE COMMUNICATIONS
3. In case of PIK interest payments (Interest Notes) on account of the Note,
deliver the Interest Notes to:
BankAmerica Investment Corporation,
a subsidiary of BankAmerica Corporation
231 South LaSalle Street - 19th Floor
Chicago, IL 60697
Attn: Rosemary E. Szurko
(PLEASE MAIL ALL HARDCOPY CONFIRMATIONS)
4. All communications shall be delivered or mailed to:
BankAmerica Investment Corporation
231 South LaSalle Street
Chicago, IL 60697
Attn: Moira A. Cary, Esq.
Christopher S. Field, Esq.
Fax: (312) 828-5423
with a copy to:
Rosemary E. Szurko
Bank of America NT & SA
231 South LaSalle Street
Chicago, IL 60697
Fax: (312) 828-5423
5. Tax I.D. #: 36-3101574
6. Notes and Interest Notes are to be registered in the name of the Purchaser,
unless otherwise provided below:
Notes and Interest Notes to be registered in the name of [______________________
______________________] (if other than Purchaser).
EXHIBIT A
This note has not been registered under the United State Securities Act of
1933, as amended (the "Securities Act"), or any state securities laws. Neither
this note nor any interest or participation herein may be reofferred, sold,
assigned, transferred, pledged, encumbered or otherwise disposed of in the
absence of such registration or unless such transaction is exempt from, or not
subject to, registration. The holder of this note by its acceptance hereof
agrees to offer, sell or otherwise transfer this note, prior to the date which
is two years after the later of the original issue date hereof and the last date
on which any issuer, or any affiliate of any issuer, was the owner of this note
(or any predecessor of this security) only (A) to the issuer, (B) pursuant to a
registration statement which has been declared effective under the Securities
Act, (C) for so long as this security is eligible for resale pursuant to Rule
144A under the Securities Act ("Rule 144A"), to a person it reasonably believes
is a "qualified institutional buyer" as defined in Rule 144A that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the transfer is being made in reliance on Rule 144A, (D)
pursuant to offers and sales to non-U.S. Persons that Occur outside the United
States within the meaning of Regulation S under the Securities Act, (E) to an
institutional "accredited investor," and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act, or
(F) pursuant to another available exemption from the registration requirements
of the Securities Act, subject to the issuer's right prior to any such offer,
sale or transfer pursuant to clause (E) or (F) to require the delivery of an
opinion of counsel reasonably satisfactory to it.
METAWAVE COMMUNICATION CORPORATION
13.75% Senior Secured Bridge Note Due April [ ], 2000
No. ______ April [ ],1998
METAWAVE COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to
[______________]
or registered assigns
on the [ ] day of April, 2000
the principal amount of
[__________________________________] ($_______)
Interest on this Note will accrue at a rate equal to the lower of (i)
13.75% per annum (as adjusted in accordance with the following sentence, the
"Base Interest Rate") or, (ii) the highest rate permitted by law (such lower
amount being referred to as the "Interest Rate"), and be payable semi-annually
on April [ ] and October [ ] of each year, commencing on October [ ], 1998,
and at maturity. On April [ ], 1999, and at the end of each subsequent one
hundred eighty (180) day period, the Base Interest Rate will increase by 200
basis points, to a maximum interest rate of 18.0%. Interest on this Note shall
accrue and be computed semi-annually on the basis of a 360-day year of twelve
30-day months.
The interest shall be payable at the option of the Company (x) in kind by
the issuance to the holders thereof of separate promissory notes (each an
"Interest Note," and, collectively, the "Interest Notes"), in each case having a
principal amount equal to the amount of interest due and payable on such date or
(y) in cash; provided that the Company will only be entitled to pay in cash if
it has irrevocably notified in writing the holders of the Notes of its intention
to make a cash interest payment at least ten (10) Business Days before the
relevant interest payment date, it being agreed that payment in kind via
Interest Notes is the default interest payment method in the absence of such
notice. Interest on Interest Notes shall accrue at the same Interest Rate per
annum and shall be payable in kind by the issuance of additional Interest Notes
or in cash as provided above on the same date as interest is payable on the
Notes. The unpaid principal balance of all Notes (including Interest Notes),
together with unpaid accrued interest thereon, shall be due and payable in cash
on the stated date of maturity of the Notes. Such Interest Notes shall be
substantially in the form of this Note. Notwithstanding different issue dates
and interest terms, unless the context clearly requires otherwise, all Interest
Notes shall be Notes for all purposes of the Agreement.
The Company agrees to pay interest in cash on overdue principal (including
any overdue required or optional prepayment of principal) and premium, if any,
and (to the extent legally
-2-
enforceable) on any overdue installment of interest at the Interest Rate per
annum from the date such payment is due, whether by acceleration or otherwise,
until paid. At maturity or upon any acceleration of this Note, the principal
hereof and accrued but unpaid interest hereon are payable at the principal
office of the Company at 8700 148th Avenue NE, Redmond, Washington 98052 in
immediately available coin or currency of the United States of America which at
the time of payment shall be legal tender for the payment of public and private
debts.
If any amount of principal, premium or interest, if any, on or in respect
of this Note becomes due and payable on any date which is not a Business Day,
such amount shall be payable on the next preceding Business Day. "Business Day"
means any day other than a Saturday, Sunday, statutory holiday or other day on
which banks in New York City are required by law to close or are customarily
closed.
This Note is one of the 13.75% Senior Secured Bridge Notes due April [ ],
2000 of the Company in the aggregate original principal amount of $29,000,000
issued or to be issued under and pursuant to the terms and provisions of the
Note Agreement, dated as of April [ ], 1998 (the "Note Agreement"), entered
into by the Company with the original purchasers therein referred to and this
Note and the holder hereof are entitled equally and ratably with the holders of
all other Notes outstanding under the Note Agreement to all the benefits
provided for thereby or referred to therein. Capitalized terms used herein and
not otherwise defined shall have the meanings provided in the Note Agreement.
The consent and waiver provisions contained in Section 7.1 of the Note Agreement
are incorporated herein and made a part hereof.
This Note (including Interest Notes) and the other Notes issued under the
Note Agreement are senior secured obligations of the Company, ranking pari passu
in right of payment with all permitted existing and permitted future senior
secured Indebtedness of the Company and senior to all unsecured or subordinated
Indebtedness of the Company, all non-permitted senior secured indebtedness of
the Company and all other senior indebtedness of the Company.
This Note and the other Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates and certain prepayments are
required to be made thereon, all in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing, such
transfer to be made in accordance with the requirements set forth in this Note
and the Note Agreement. Payment of or on account of principal, premium and
interest, if any, on this Note shall be made only to or upon the order in
writing of the registered holder.
-3-
This Note and the Note Agreement are governed by and construed and enforced
in accordance with the laws of the State of New York applicable to contracts
executed and to be performed entirely in such state. If any provision of this
Note is determined to be unenforceable under the laws of the State of New York,
and if such provision would be enforceable under the laws of the State of
Washington, then it is agreed that the Courts of the State of New York shall
interpret and enforce such provision pursuant to the laws of the State of
Washington.
METAWAVE COMMUNICATIONS CORPORATION
By:_________________________________
Name:
Title:
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EXHIBIT B
---------
This Warrant has not been registered under the Securities Act of 1933, as
amended, or any state securities laws. It may not be sold or offered for sale
except pursuant to an effective registration statement under said act and any
applicable state securities law or an applicable exemption from such
registration requirements.
________________________
April [ ], 1998
METAWAVE COMMUNICATIONS CORPORATION
________________________
Preferred Stock Purchase Warrant
Metawave Communications Corporation, a Delaware corporation (the
"COMPANY"), hereby certifies that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [NAME OF PURCHASER]
having an address at [ADDRESS OF PURCHASER] ("PURCHASER") or any other Warrant
Holder is entitled, on the terms and conditions set forth below, to purchase
from the Company at any time beginning on the date hereof and ending on the
second anniversary of the Closing Date, [537,500 IN THE AGGREGATE] fully paid
and nonassessable shares of Series D Preferred Stock, par value $.0001 of the
Company (the "PREFERRED STOCK"), at a purchase price per share of Preferred
Stock equal to $.01 per share (the "PURCHASE PRICE"), as the same may be
adjusted pursuant to Section 5 herein.
1. DEFINITIONS.
-----------
a) The term "AGREEMENT" shall mean the Note Agreement, dated as of
April [ ], 1998, between the Company and the Purchasers signatory thereto.
b) The term "CERTIFICATE" shall mean the Third Amended and Restated
Certificate of Incorporation of the Company filed by the Company with the
Secretary of State of State of Delaware on August 4, 1997, containing the
designations of the Preferred Stock.
c) The term "CLOSING DATE" shall mean April [ ], 1998.
d) The term "INVESTORS' RIGHTS AGREEMENT" shall mean the Third
Amended and Restated Investors' Rights Agreement of the Company dated August 6,
1997 with the Investors listed on Schedule A thereto, containing, inter alia,
----- ----
certain registration rights, as in effect on the date hereof.
e) The term "NOTE" shall mean one of the 13.75% Senior Secured
Bridge Notes issued pursuant to the Agreement.
f) The term "PREFERRED STOCK" shall mean the Series D Preferred
Stock of the Company issued pursuant to the Certificate.
g) The term "WARRANT HOLDER" shall mean the Purchaser or any
assignee of all or any portion of this Warrant.
h) The term "WARRANT SHARES" shall mean the Shares of Preferred
Stock or other securities issuable upon exercise of this Warrant.
Capitalized terms used but not defined in this Warrant shall have the
meanings specified in the Agreement.
2. EXERCISE OF WARRANT.
-------------------
This Warrant may be exercised by the Warrant Holder, in whole or in part,
at any time and from time to time by either of the following methods:
(a) The Warrant Holder may surrender this Warrant, together with the
form of subscription at the end hereof duly executed by Warrant Holder
("SUBSCRIPTION NOTICE"), at the offices of the Company or any transfer agent for
the Preferred Stock; or
(b) The Warrant Holder may also exercise this Warrant, in whole or in
part, in a "cashless" or "net-issue" exercise by delivering to the offices of
the Company or any transfer agent for the Preferred Stock this Warrant, together
with a Subscription Notice specifying the number of Warrant Shares to be
delivered to such Warrant Holder ("DELIVERABLE SHARES") and the number of
Warrant Shares with respect to which this Warrant is being surrendered in
payment of the aggregate Purchase Price for the Deliverable Shares ("SURRENDERED
SHARES"); provided that the Purchase Price multiplied by the number of
Deliverable Shares shall not exceed the value of the Surrendered Shares; and
provided further that the sum of the number of Deliverable Shares and the number
of Surrendered Shares so specified shall not exceed the aggregate number of
Warrant Shares represented by this Warrant. For the purposes of this provision,
each Warrant Share as to which this Warrant is surrendered will be attributed a
value equal to the fair market value (as defined below) of the Warrant Share
minus the Purchase Price of the Warrant Share.
In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares for which
this Warrant is exercised and/or surrendered, and the Company, at its expense,
shall within five (5) Business Days issue and deliver to or upon the order of
Warrant Holder a new Warrant of like tenor in the name of Warrant Holder or as
Warrant Holder (upon payment by Warrant Holder of any applicable transfer taxes)
may request, reflecting such adjusted Warrant Shares.
-2-
3. DELIVERY OF STOCK CERTIFICATES.
------------------------------
a) Subject to the terms and conditions of this Warrant, as soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within five (5) Business Days thereafter, the Company shall transmit the
certificates (together with any other stock or other securities or property to
which Warrant Holder is entitled upon exercise) by messenger or overnight
delivery service to reach the address designated by such holder within five (5)
Business Days after the receipt of the Subscription Notice ("B+5"). If such
certificates are not received by the Warrant Holder within B+5, then the Warrant
Holder will be entitled to revoke and withdraw its exercise of its Warrant at
any time prior to its receipt of those certificates.
b) This Warrant may not be exercised as to fractional shares of
Preferred Stock. In the event that the exercise of this Warrant, in full or in
part, would result in the issuance of any fractional share of Preferred Stock,
then in such event the Warrant Holder shall be entitled to cash equal to the
fair market value of such fractional share. For purposes of this Warrant, "fair
market value" shall equal the closing trading price of the Common Stock on the
New York Stock Exchange, or the American Stock Exchange or the Nasdaq Stock
Market, whichever market (any, an "APPROVED MARKET") is the principal trading
exchange or market for the Common Stock (the "PRINCIPAL MARKET") on the date of
determination, multiplied by the aggregate number of shares of Common Stock into
which such Preferred Shares may then be converted, or, if the Common Stock is
not listed or admitted to trading on any Approved Market, the average of the
closing bid and asked prices on the over-the-counter market as furnished by any
New York Stock Exchange member firm reasonably selected from time to time by the
Company for that purpose and reasonably acceptable to the Warrant Holder,
multiplied by the aggregate number of shares of Common Stock into which such
Preferred Shares may then be converted, or, if the Common Stock is not listed or
admitted to trading on any Approved Market or traded over-the-counter and the
average price cannot be determined as contemplated above, the fair market value
of the Preferred Stock shall be as reasonably determined in good faith by the
Company's Board of Directors with the concurrence of the Warrant Holder.
4. (A) REPRESENTATIONS AND COVENANTS OF THE COMPANY.
--------------------------------------------
a) The Company shall comply with its obligations under Section 6
with respect to the Warrant Shares and the Common Stock issuable upon conversion
of the Warrant Shares ("COMMON SHARES"), including, without limitation, the
Company's obligation, subject to Section 6(a) below, to include the Warrant
Shares and the Common Shares in any registration statement registering the
Warrant Shares and/or the Common Shares under the Securities Act of 1933, as
amended (the "ACT").
b) The Company shall take all necessary action and proceedings as
may be required and permitted by applicable law, rule and regulation, including,
without limitation (after the Initial Public Offering) the notification of the
Principal Market, for the legal and valid issuance of this Warrant and the
Warrant Shares to the Warrant Holder under this Warrant and the Common Shares
under the Warrant Shares.
-3-
c) From the date of the Initial Public Offering through the last
date on which this Warrant is exercisable, the Company shall take all steps
necessary to insure that the Preferred Stock and the Common Stock remains listed
on the Principal Market.
d) The Warrant Shares, when issued in accordance with the terms
hereof, and the Common Shares, when issued in accordance with the terms of the
Warrant Shares, will be duly authorized and, when paid for or issued in
accordance with the terms hereof and thereof, shall be validly issued, fully
paid and non-assessable. The Company has authorized and reserved for issuance
to Warrant holders and Warrant Share holders the requisite number of shares of
Preferred Stock and Common Stock to be issued pursuant to this Warrant and
pursuant to the Warrant Shares.
e) The Company shall at all times, commencing within five days from
the date hereof, reserve and keep available, solely for issuance and delivery as
Warrant Shares hereunder and as Common Shares under the Warrant Shares, one and
one-half times such number of shares of Preferred Stock and one and one-half
times such number of shares of Common Stock as shall from time to time be
issuable hereunder and thereunder.
f) The Company agrees to use its reasonable best efforts to promptly
provide to the holders of this Warrant, and the holders of the Warrant Shares,
and the holders of the Common Shares, from time to time upon request the
information required under Rule 144A under the Securities Act, so as to permit a
sale at such time or times of the Warrant and/or the Warrant Shares and/or the
Common Shares under said Rule 144A.
g) With a view to making available to Warrant holders, the holders
of Warrant Shares and the holders of Common Shares the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the Securities and
Exchange Commission ("SEC") that may at any time permit Warrant holders, the
holders of Warrant Shares and the holders of Common Shares to sell securities of
the Company to the public without registration, the Company agrees to use its
reasonable best efforts after the Initial Public Offering to:
i) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times;
ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"); and
iii) furnish to any such holder forthwith upon request a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 and of the Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as may be reasonably requested to permit any such holder to
take advantage of any rule or regulation of the SEC permitting the selling of
any such securities without registration.
h) The Company covenants and represents that, so long as any of the
Warrants or the Warrant Shares are outstanding (i) the Company will not take any
action which will impair or otherwise weaken the rights and privileges of the
holders of the Warrants and the
-4-
Warrant Shares and (ii) the Company will deliver to the holders of the Warrants
and Warrant Shares, at the same time as same is required to be delivered to
Investors under the Investors' Rights Agreement, the financial statements of
other documents and information referred to in Section 2.1 of the Investors'
Rights Agreement.
(B) REPRESENTATIONS AND COVENANTS OF THE PURCHASER.
----------------------------------------------
The Purchaser shall not transfer Warrant Shares, unless such transfer
is pursuant to an effective registration statement under the Act or pursuant to
an applicable exemption from such registration requirements.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of and
-------------------------------------------------
kind of securities purchasable upon exercise of this Warrant and the Purchase
Price shall be subject to adjustment from time to time as follows:
a) Subdivisions, Combinations and other Issuances. If the Company
----------------------------------------------
shall at any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase rights under
this Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant exist, the
number of Warrant Shares as to which this Warrant is exercisable as of the date
of such subdivision, split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or proportionately
decreased in the case of a combination. Appropriate proportional adjustments
(decrease in the case of subdivision, increase in the case of combination) shall
also be made to the Purchase Price payable per share, so that the aggregate
Purchase Price payable for the total number of Warrant Shares purchasable under
this Warrant as of such date shall remain the same as it would have been before
such subdivision or combination.
b) Stock Dividend. If at any time after the date hereof the Company
--------------
declares a dividend or other distribution on Preferred Stock payable in
Preferred Stock or other securities or rights convertible into Preferred Stock
("PREFERRED STOCK EQUIVALENTS") without payment of any consideration by holders
of Preferred Stock for the additional shares of Preferred Stock or the Preferred
Stock Equivalents (including the additional shares of Preferred Stock issuable
upon exercise or conversion thereof), then the number of shares of Preferred
Stock for which this Warrant may be exercised shall be increased as of the
record date (or the date of such dividend distribution if no record date is set)
for determining which holders of Preferred Stock shall be entitled to receive
such dividends, in proportion to the increase in the number of outstanding
shares (and shares of Preferred Stock issuable upon conversion of all such
securities convertible into Preferred Stock) of Preferred Stock as a result of
such dividend, and the Purchase Price shall be proportionately reduced so that
the aggregate Purchase Price for all the Warrant Shares issuable hereunder
immediately after the record date (or on the date of such distribution, if
applicable), for such dividend shall equal the aggregate Purchase Price so
payable immediately before such record date (or on the date of such
distribution, if applicable).
c) Other Distributions. If at any time after the date hereof the
-------------------
Company distributes to holders of its Preferred Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
Preferred Stock), then the number of Warrant Shares for which this Warrant
-5-
is exercisable shall be increased to equal: (i) the number of Warrant Shares for
which this Warrant is exercisable immediately prior to such event, (ii)
multiplied by a fraction, (A) the numerator of which shall be the fair market
value per share of Preferred Stock on the record date for the dividend or
distribution, and (B) the denominator of which shall be the fair market value
price per share of Preferred Stock on the record date for the dividend or
distribution minus the amount allocable to one share of Preferred Stock of the
value (as jointly determined in good faith by the Board of Directors of the
Company and the Warrant Holder) of any and all such evidences of indebtedness,
shares of capital stock, other securities or property, so distributed. The
Purchase Price shall be reduced to equal: (i) the Purchase Price in effect
immediately before the occurrence of any event (ii) multiplied by a fraction,
(A) the numerator of which is the number of Warrant Shares for which this
Warrant is exercisable immediately before the adjustment, and (B) the
denominator of which is the number of Warrant Shares for which this Warrant is
exercisable immediately after the adjustment.
d) Merger, etc. If at any time after the date hereof there shall be
-----------
a merger or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then the
Warrant Holder shall be entitled to receive upon or after such transfer, merger
or consolidation becoming effective, and upon payment of the Purchase Price then
in effect, the number of shares or other securities or property of the Company
or of the successor corporation resulting from such merger or consolidation,
which would have been received by Warrant Holder for the shares of stock subject
to this Warrant had this Warrant been exercised just prior to such transfer,
merger or consolidation becoming effective or to the applicable record date
thereof, as the case may be. The Company will not merge or consolidate with or
into any other corporation, or sell or otherwise transfer its property, assets
and business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement reasonably satisfactory in form and substance to the
Warrant Holder, the due and punctual performance and observance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company.
e) Reclassification, etc. If at any time after the date hereof
---------------------
there shall be a reorganization or reclassification of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant Holder
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the Purchase Price then in
effect, the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the
Warrant Holder for the shares of stock subject to this Warrant had this Warrant
at such time been exercised.
f) Warrant Share Adjustment. In the event that the Company issues
------------------------
or sells any Additional Stock, as that term is defined in Section 4(d)(ii) of
Article IV of the Certificate at an effective purchase price per share of Common
Stock ("NEW PRICE") which is less than $9.25 per share ("FIXED PRICE"), as
adjusted for stock splits and stock dividends, then in each such case ("DILUTION
EVENT"), the number of Warrant Shares which may be purchased upon the exercise
of this Warrant shall be increased by multiplying the number of Warrant Shares
which may be purchased upon the exercise of this Warrant by a fraction, the
numerator of which is the Fixed Price minus the New Price and the denominator of
which is the New Price. However, to the
-6-
extent that a Dilution Event results, pursuant to the terms of the Certificate,
in the holder of this Warrant being entitled to purchase more Common Shares
("EXCESS SHARES") upon conversion of the Warrant Shares issuable hereunder into
Common Shares, then the additional number of Warrant Shares to which the holder
hereof would have been entitled to receive pursuant to the immediately preceding
sentence of this Section 5(f) with respect to such Dilution Event shall be
reduced by the number of Excess Shares to which the holder of this Warrant would
then be entitled to receive upon exercise of this Warrant and the conversion of
the Warrant Shares issuable hereunder into Common Shares.
6. PIGGYBACK REGISTRATIONS/MARKET STAND-OFF PROVISION.
--------------------------------------------------
a) Right to Piggyback. The Company covenants that the Warrant
------------------
holders and the holders of the Warrant Shares shall at all times have the same
piggyback and other rights (other than demand registration rights referred to in
Sections 1.2 and 1.12 of the Investor's Rights Agreement) as a "Holder" and as a
"Series D Investor" as are contained in the Investors' Rights Agreement, which
rights are incorporated herein and made a part hereof.
b) Market Stand-Off Provision. The holders of the Warrants and the
---------------------------
Warrant Shares agree to be bound (as an "Investor") by the market stand-off
provisions contained in Section 1.15 of the Company's Investors' Rights
Agreement on condition that: (i) all officers, directors and "control persons"
of the Company, and members of their immediately family, are and remain bound by
such provisions, (ii) all persons and entities who have registration rights
(piggy-back, demand or otherwise) of any kind with respect to the Company's
Stock are and remain bound by such provisions, and (iii) the Company enforces
such provisions against all the holders of the Warrants only to the same extent
and same degree that it enforces such provisions against all of the persons and
entities referred to in (i) and (ii) immediately above. The Company
acknowledges that the term "donees" as used in said Section 1.15 shall include
successive transferees, assignees, participants and the like.
7. NO IMPAIRMENT. The Company will not, by amendment of its Certificate
-------------
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant or the terms of the Warrant Shares, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Warrant Holder and the holder of the Warrant Shares against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any Warrant Shares above the amount payable
therefor on such exercise, and (b) will take all such action as may be
reasonably necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant and Common Stock upon conversion of the Warrant Shares.
8. NOTICE OF ADJUSTMENTS. Whenever the Purchase Price or number of
---------------------
Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the
Company shall execute and deliver to the Warrant Holder a certificate setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated and the
Purchase Price and number of shares purchasable hereunder after giving
-7-
effect to such adjustment, and shall cause a copy of such certificate to be
mailed (by first class mail, postage prepaid) to the Warrant Holder.
9. RIGHTS AS STOCKHOLDER. Prior to exercise of this Warrant, the Warrant
---------------------
Holder shall not be entitled to any rights as a stockholder of the Company with
respect to the Warrant Shares, including (without limitation) the right to vote
such shares, receive dividends or other distributions thereon or be notified of
stockholder meetings. However, in the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, the Company shall mail to each Warrant Holder, at least 10
Trading Days prior to the date specified therein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.
10. LIMITATION ON EXERCISE. Notwithstanding anything to the contrary
----------------------
contained herein, this Warrant may not be exercised by the Warrant Holder to the
extent that, after giving effect to Warrant Shares to be issued pursuant to a
Subscription Notice, the total number of shares of Common Stock deemed
beneficially owned by such holder (other than by virtue of ownership of this
Warrant, or ownership of other securities that have limitations on the holder's
rights to convert or exercise similar to the limitations set forth herein),
together with all shares of Common Stock deemed beneficially owned by the
holder's "affiliates" (as defined in Rule 144 of the Act) that would be
aggregated for purposes of determining whether a group under Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") exists,
would exceed 9.9% of the Common Shares issued and outstanding immediately
following such exercise (the "Restricted Ownership Percentage"); provided that
--------
(w) each Warrant Holder shall have the right at any time and from time to time
to reduce its Restricted Ownership Percentage immediately upon notice to the
Company or in the event of a Change of Control Transaction, (x) each Warrant
Holder shall have the right at any time and from time to time to increase its
Restricted Ownership Percentage or otherwise waive in whole or in part the
restrictions of this Section 10 upon 61 days' prior notice to the Company or
immediately in the event of a Change of Control Transaction, (y) each Warrant
Holder can make subsequent adjustments pursuant to (w) or (x) any number of
times from time to time (which adjustment shall be effective immediately if it
results in a decrease in the Restricted Ownership Percentage or shall be
effective upon 61 days' prior written notice or immediately in the event of a
Change of Control Transaction if it results in an increase in the Restricted
Ownership Percentage) and (z) each Warrant Holder may eliminate or reinstate
this limitation at any time and from time to time (which elimination will be
effective upon 61 days' prior notice and which reinstatement will be effective
immediately). Without limiting the foregoing, in the event of a Change of
Control Transaction, any holder may reinstate immediately (in whole or in part)
the requirement that any increase in its Restricted Ownership Percentage be
subject to 61 days' prior written notice, notwithstanding such Change of Control
Transaction, without imposing such requirement on, or otherwise changing such
holder's rights with respect to, any other Change of Control Transaction. For
this purpose, any material modification of the terms of a Change of Control
Transaction will be deemed to create a new Change of Control Transaction. A
"CHANGE OF CONTROL TRANSACTION" will be deemed to have occurred upon the earlier
of the announcement or consummation of a transaction or series of transactions
involving (x) any consolidation or merger
of the Company with or into any other corporation or other entity or person
(whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in excess of 50% of the Company's voting power is transferred through a
merger, consolidation, tender offer or similar transaction, or (y) in excess of
50% of the Company's Board of Directors consists of directors not nominated by
the prior Board of Directors of the Company, or (z) any person (as defined in
Section 13(d) of the Exchange Act, together with its affiliates and associates
(as such terms are defined in Rule 405 under the Act), beneficially owns or is
deemed to beneficially own (as described in Rule 13d-3 under the Exchange Act
without regard to the 60-day exercise period) in excess of 50% of the Company's
voting power. The delivery of a Subscription Notice by the Warrant Holder shall
be deemed a representation by such holder that it is in compliance with this
paragraph.
11. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense promptly will execute
and deliver, in lieu thereof a new Warrant of like tenor.
12. SPECIFIC PERFORMANCE; CONSENT TO JURISDICTION; CHOICE OF LAW.
------------------------------------------------------------
a) The Company and the Warrant Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall he entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Warrant and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of them may be entitled by
law or equity.
b) EACH OF THE COMPANY AND THE WARRANT HOLDER (I) HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS WARRANT AND (II) HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF SUCH COURT AND ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT TO SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY AND THE WARRANT HOLDER
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT
UNDER THIS WARRANT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH
SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY APPLICABLE LAW. IF ANY PROVISION OF THIS WARRANT IS DETERMINED TO BE
UNENFORCEABLE UNDER THE LAWS OF THE STATE OF NEW YORK, AND IF SUCH PROVISION
WOULD BE ENFORCEABLE UNDER THE LAWS OF THE STATE OF WASHINGTON, THEN IT IS
AGREED THAT THE COURTS OF THE STATE OF NEW YORK SHALL INTERPRET AND ENFORCE SUCH
PROVISION PURSUANT TO THE LAWS OF THE STATE OF WASHINGTON.
-9-
c) THE COMPANY AND THE WARRANT HOLDER IRREVOCABLY WAIVE THEIR RIGHT
TO TRIAL BY JURY.
d) THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO ALL
CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
13. REDEMPTION. This Warrant shall be subject to the provisions of
----------
Section 1.4 of the Agreement.
14. ENTIRE AGREEMENT; AMENDMENTS. This Warrant, the Exhibits and the
----------------------------
provisions contained in the Agreement and incorporated into this Warrant and the
Warrant Shares contain the entire understanding of the parties with respect to
the matters covered hereby and thereby and, except as specifically set forth
herein and therein, neither the Company nor the Warrant Holder makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought.
15. NOTICES. Any notice or other communication required or permitted to
-------
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or delivery by telex (with correct answer back received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
to the Company:
Metawave Communications Corporation
8700 148th Avenue NE
Redmond, Washington 98052
Attention: Chief Financial Officer; General Counsel
Facsimile: (425) 702-5970
to the Warrant Holder:
[NAME AND ADDRESS OF WARRANT HOLDER]
Attention:
Facsimile:
with copies to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
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Attention: Fredric A. Kleinberg, Esq.
Facsimile: (212) 986-8866
Either party hereto may from time to time change its address for notices under
this Section 14 by giving at least 10 days prior written notice of such changed
address to the other party hereto.
16. MISCELLANEOUS. This Warrant and the Warrant Shares and any term
-------------
hereof or thereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any
of the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
17. ASSIGNMENT. This Warrant may be transferred or assigned, in whole or
----------
in part (but not in amounts exercisable for less than 1,000 shares of Preferred
Stock unless such smaller amount is all that remains under the Warrant), at any
time and from time to time by the then Warrant Holder by submitting this Warrant
to the Company together with a duly executed Assignment in substantially the
form and substance of the Form of Assignment which accompanies this Warrant and,
upon the Company's receipt hereof, and in any event, within three (3) business
days thereafter, the Company shall issue a new Warrant to such assignee and a
Warrant to the Warrant Holder to evidence that portion of this Warrant, if any
as shall not have been so transferred or assigned. By accepting an assignment of
this Warrant, the transferee agrees to be bound by the terms and conditions
hereof, and shall be entitled to all of the rights and remedies of a holder of
this Warrant.
Dated:________________________ METAWAVE COMMUNICATIONS CORPORATION
By: _______________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By: _______________________
Its
[SIGNATURE BLOCK OF WARRANT HOLDER]
(SIGNATURE PAGE OF METAWAVE COMMUNICATIONS CORPORATION PREFERRED STOCK PURCHASE
WARRANT)
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(SUBSCRIPTION NOTICE)
FORM OF WARRANT EXERCISE
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO: METAWAVE COMMUNICATIONS CORPORATION
ATTN: SECRETARY
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant:
______(A) for, and to purchase thereunder, ____________ shares of Preferred
Stock of Metawave Communications Corporation, a Delaware corporation (the
"PREFERRED STOCK"), and herewith, or by wire transfer, makes payment of $
______________ therefor; or
______(B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder , ______ shares of Preferred Stock, and herewith makes payment
therefor with ______________ Surrendered Warrant Shares.
The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to ___________________, whose address is
_______________________________.
Dated:_____________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
(Address)
Tax Identification Number:___________
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_____________
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and transfers unto
________________ the right represented by the within Warrant to purchase _______
shares of Preferred Stock of METAWAVE COMMUNICATIONS CORPORATION, a Delaware
corporation, to which the within Warrant relates, and appoints
___________________ Attorney to transfer such right on the books of METAWAVE
COMMUNICATIONS CORPORATION, a Delaware corporation, with full power of
substitution of premises.
Dated: ______________
(Signature must conform to name of holder
as specified on the face of the Warrant)
(Address)
Signed in the presence of:
-13-
EXHIBIT E
COMPANY SECURITY AGREEMENT
SECURITY AGREEMENT dated as of the [_] day of April, 1998 by and between
METAWAVE COMMUNICATIONS CORPORATION, a Delaware corporation, having its
principal place of business at 8700 148th Avenue NE, Redmond, Washington (the
"Company") and each other person signatory hereto and their respective
successors and assigns (each, a "Secured Party" and together, the "Secured
Parties").
RECITALS
A. The Secured Parties and the Company have entered into a Note Agreement,
dated as of April [_], 1998 (as the same may be further amended, modified or
supplemented from time to time, the "Note Agreement"), pursuant to which the
Company will issue Notes (as defined in the Note Agreement) and Warrants (as
defined in the Note Agreement) to each Secured Party.
B. To induce the Secured Parties to enter into the Note Agreement with the
Company on and after the date hereof as provided in the Note Agreement, the
Company wishes to grant each Secured Party a first priority perfected security
interest in certain of its assets and a second priority perfected security
interest in certain of its assets, and in connection therewith to execute and
deliver this Security Agreement.
Accordingly, the parties hereto hereby agree as follows:
DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Note Agreement.
"Agreement": shall mean this Agreement and shall include all
---------
amendments, modifications and supplements hereto and shall refer to this
Agreement as the same may be in effect at the time such reference becomes
operative.
"Equipment": shall mean all machinery, equipment, office machinery,
---------
furniture, fixtures, conveyors, tools, materials, storage and handling
equipment, computer equipment and hardware including central processing units,
terminals, drives, memory units, printers, keyboards, screens, peripherals and
input or output devices, automotive equipment, trucks, molds, dies, stamps,
motor vehicles and other equipment of every kind and nature and wherever
situated now or hereafter directly or indirectly owned by the Company or in
which the Company may have any interest together with all additions and
accessions thereto, all replacements and all accessories and parts therefor, all
manuals, blueprints, know-how, warranties and records in connection therewith,
all rights against suppliers, warrantors, manufacturers, sellers or others in
connection therewith, and together with all substitutions for any of the
foregoing.
"General Intangibles": shall mean all "General Intangibles," as such
-------------------
term is defined in Section 9-106 of the Uniform Commercial Code of the State of
New York, now or hereafter directly or indirectly owned by Company, including,
without limitation, present and future trade secrets and other proprietary
information; trademarks, trade names and trademark applications, service marks,
business names, logos and the goodwill of the business relating thereto;
copyrights and copyright applications and all tangible property embodying the
copyrights; unpatented inventions (whether or not patentable); designs; research
and development results; patent applications and patents; customer contracts;
license agreements related to any of the foregoing and the income therefrom;
books, records, computer tapes or disks, flow diagrams, specification sheets,
source codes, object codes, and other physical manifestations of the foregoing.
"Inventory": shall mean all goods now or hereafter directly or
---------
indirectly owned by the Company or in which the Company now or hereafter has an
interest intended for sale, lease or other disposition by, or consumption in the
business of, the Company of every kind and nature and wherever located,
including, without limitation, all raw materials, work in process, finished
goods, goods consigned to the Company to the extent of its interest therein as
consignee, goods in transit, materials and supplies of any kind, nature or
description which are or might be used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of any such goods; and all
documents of title or documents representing the same and all records, files and
writings with respect thereto.
"Investment Adviser": shall mean MacKay-Shields Financial Corporation.
------------------
"Receivable": shall mean and include, with respect to the Company, all
----------
directly or indirectly right, title and interest of the Company in all present
and future accounts receivable, contract rights, promissory notes, chattel
paper, all tax refunds and rights to receive tax refunds, bonds, rights of
indemnification, contribution and subrogation, leases, computer tapes, programs
and software, computer service contracts, deposits, causes of action, choses in
action, judgments, and claims against third parties of every kind or nature,
investment securities, notes, drafts, acceptances, letters of credit and rights
to receive proceeds (as such term is defined in Section 9-306 of the New York
State Uniform Commercial Code) of letters of credit, instruments and deposit
accounts, book accounts, credits and reserves and all forms of obligations
whatsoever owing, together with all instruments, all documents of title
representing any of the foregoing, and all rights in any merchandise or goods
which any of the same may represent, all books, ledgers, files and records with
respect to any Collateral or security given to the Secured Party hereunder by
Company, together with all right, title, security and guaranties with respect to
each Receivable, including any right of stoppage in transit.
1. SECURITY
1.01 GRANT OF SECURITY. As security for the Company's obligations
-----------------
under the Note Agreement, the Notes and the Warrants (the "Obligations"), the
Company hereby transfers, assigns and grants to the Secured Parties for the
ratable benefit of the Secured Parties a first priority perfected lien on and
first priority perfected security interest in all of its present and
-2-
future property and assets (other than real estate) of every kind and
description, both tangible and intangible, including, without limitation, all of
its Receivables (except as provided for in the Intercreditor Agreement, dated as
of the date hereof, by and among Secured Parties, Imperial Bank and the Company
(the "Intercreditor Agreement")) Equipment (except as provided for in any (i)
bona fide equipment leases in the ordinary course of business or (ii) bona fide
purchase money security agreement for fair value ("PM Security Interest") with
respect to any Equipment purchased or financed by the Company from such purchase
money secured party, not to exceed $2,500,000 in the aggregate; but only to the
extent of such fair value and reduced from time to time by payments with respect
thereto), Inventory (except as provided for in the Intercreditor Agreement) and
General Intangibles and all proceeds thereof together with all accessions and
additions thereto, substitutions and replacements therefor and products and
proceeds thereof whether now owned or existing or hereafter arising or acquired
and wherever located (collectively, the "Collateral").
1.02 RELEASE AND SATISFACTION. Upon the termination of this
------------------------
Agreement and the payment in full of the Obligations, the Secured Parties shall
deliver to the Company upon request therefor and at the Company's expense,
releases and satisfactions of all financing statements, notices of assignment
and other registrations of security.
1.03 RECORDS; LOCATION OF COLLATERAL. So long as the Company shall
-------------------------------
have any Obligation to any Secured Party (a) the Company shall not move its
chief executive office, principal place of business or office at which is kept
its books and records (including computer printouts and programs) from the
locations existing on the date hereof and listed on Schedule 1.03 annexed
hereto; (b) the Company shall not establish any offices or other places of
business at any other location; (c) the Company shall not move any of the
Collateral having an aggregate book or market value in excess of $50,000 to any
location other than those locations existing on the date hereof and listed on
Schedule 1.03 annexed hereto, unless, in each case of clauses (a), (b) and (c)
above, (i) the Company shall have given the Secured Parties thirty (30) day's
prior written notice of its intention to do so, identifying the new location and
providing such other information as the Secured Parties deem reasonably
necessary, and (ii) the Company shall have delivered to the Secured Parties
financing statements and such other documentation in form and substance
reasonably satisfactory to each Secured Party and reasonably required by such
Secured Party to preserve the Secured Party's security interest in the
Collateral. Notwithstanding the foregoing, the Company may open sales offices
at other locations without complying with the above requirements provided that
the book or market value of Collateral at each such office does not exceed
$15,000, and the aggregate book or market value of all such Collateral does not
exceed $100,000.
2. REPRESENTATIONS AND WARRANTIES AND COVENANTS
2.01 REPRESENTATIONS AND WARRANTIES AND COVENANTS. The Company
--------------------------------------------
hereby represents and warrants and covenants to each Secured Party with respect
to itself as follows:
-3-
(a) OWNERSHIP OF COLLATERAL. The Company owns all of the Collateral
-----------------------
free and clear of any lien, encumbrance, mortgage, security agreement, pledge or
charge, except as described on Schedule 2.01(a) hereto.
(b) TRADEMARKS, PATENTS AND COPYRIGHTS. Annexed hereto as Schedule
----------------------------------
2.01(b) is a complete list of all patents, trademarks, trade names, copyrights,
applications therefor, and other similar General Intangibles which the Company
owns or has the right to use as of the date of this Agreement. The Company is
not aware of any assertions or claims challenging the validity or use of any of
the foregoing. The Company has no reason to believe that the business of the
Company as now conducted conflicts with any patents, patent rights, licenses,
trademarks, trademark rights, trade names, trade name rights or copyrights of
others. The Company has no reason to believe that there is any infringement of
any General Intangible of the Company.
(c) RECEIVABLES. Annexed hereto on Schedule 1.03 is a list showing
-----------
the chief place of business and chief executive offices of the Company and all
places at which Company maintains records relating to its Receivables as of the
date of this Agreement.
(d) INVENTORY. Annexed hereto on Schedule 1.03 is a list showing all
---------
places where the Company maintains its Inventory as of the date of this
Agreement. The Company hereby represents and warrants and covenants that none
of its Inventory is currently maintained or will be maintained with any bailee
that issues negotiable warehouse receipts or other negotiable instruments
therefore.
(e) EQUIPMENT. Annexed hereto on Schedule 1.03 is a list describing
---------
all the places where the Equipment of the Company is located.
(f) TRADE NAMES. The Company has not done during the five years prior
-----------
to this Agreement, and does not currently do, business under fictitious business
names or trade names. The Company has not been known under any other name
during such five year period. The Company will only change its name or do
business under any other fictitious business names or trade names during the
term of this Agreement after giving not less than thirty (30) days prior written
notice to the Secured Parties.
(g) ENFORCEABILITY OF SECURITY INTERESTS. Upon the execution of this
------------------------------------
Agreement by the Company and the filing of financing statements describing the
Collateral and identifying the Company as debtor and each Secured Party as the
secured party in the jurisdictions identified on Schedule 2.01(g)(i) annexed
hereto, the security interests and liens granted to the Secured Parties under
Section 1.01 hereof shall constitute valid, perfected and first priority
security interests and liens in and to the Collateral, other than (i) Collateral
listed on Schedule 2.01(g)(ii) which may not be perfected by filing under the
Uniform Commercial Code, in each case enforceable against all third parties and
securing the payment of all Obligations purported to be secured thereby, (ii)
Equipment, subject to a Purchase Money Security Interest, in which the Secured
Parties shall have a valid, perfected and second priority security interest and
liens in and to such Equipment, and (iii) Inventory and Receivables, in which
the Secured Parties shall have a valid, perfected and first and second priority
security interest and liens to
-4-
such Inventory and Receivables as provided in the Inter-Creditor Agreement. As
to the Collateral listed on Schedule 2.01(g)(ii) the Secured Party will have a
valid, perfected and first priority securities interest and lien in and to such
Collateral upon the taking of such steps as shall be legally required to perfect
such security interest.
(h) SUBSIDIARIES. The Company represents and warrants that it
------------
has no subsidiaries. In the event that the Company shall create, own or have any
interest in any subsidiary, the Company shall: (i) cause such subsidiary to
issue a joint and several guarantee for the benefit of Secured Parties,
guaranteeing payment and performance of the Obligations, in form and substance
satisfactory to Secured Parties; (ii) cause such subsidiary to grant to Secured
Parties, to secure the Obligations, pursuant to a security agreement in form and
substance satisfactory to Secured Parties, a first priority perfected lien in
all assets of such subsidiary; except where such subsidiary has been acquired by
the Company in a transaction where the purchase consideration consisted of the
Company's capital stock, in which case such subsidiary shall grant to Secured
Parties a perfected lien in all such subsidiary's assets, junior in priority
only to perfected liens existing prior to the acquisition; and (iii) pledge to
Secured Parties, to secure the Obligations, all outstanding capital stock of
such subsidiary.
3. FURTHER RIGHTS OF SECURED PARTY,
-------------------------------
3.01 FURTHER ACTIONS. The Company shall do all things, take all
---------------
further action and deliver all documents and instruments requested by a Secured
Party to protect or perfect any security interest, mortgage or lien given
hereunder or under any other related document to which it is a party, including,
without limitation, financing statements under the Uniform Commercial Code and
all documents and instruments necessary under the Federal Assignment of Claims
Act and under any applicable foreign law. The Company authorizes each Secured
Party or the Investment Advisor to execute, alone, any financing statement or
other documents or instruments that such Secured Party may require to perfect,
protect or establish any lien or security interest hereunder or under any other
related document and further authorizes each Secured Party or the Investment
Advisor to sign the Company's name on the same. Upon the occurrence of an Event
of Default, the Company appoints each Secured Party or the Investment Advisor or
either's designee as the Company's attorney-in-fact to endorse the name of the
Company on any checks, notes, drafts or other forms of payment or security that
may come into the possession of such Secured Party or the Investment Advisor or
either's designee or any affiliate thereof, to sign the Company's name on
invoices or bills of lading, drafts against customers, notices of assignment,
verifications and schedules and, generally, to do all things necessary to carry
out this Agreement. Upon the occurrence and continuance of an Event of Default,
such attorney-in-fact may, at any time, notify the Postal Service authorities to
change the Company's address of delivery of mail to an address designated by the
Secured Party or the Investment Advisor or either's designee. The powers
granted herein, being coupled with an interest, are irrevocable until all of the
Obligations are irrevocably paid and discharged in full and this Agreement is
terminated. No Secured Party, no Investment Advisor nor any attorney-in-fact
shall be liable for any act or omission, error in judgment or mistake of law
provided the same is not the result of bad faith or willful misconduct.
-5-
3.02 INSURANCE AND ASSESSMENTS. In the event the Company shall fail
-------------------------
to purchase or maintain insurance, or pay any tax, assessment, government charge
or levy, or in the event that any lien, encumbrance or secured interest
prohibited hereby shall not be paid in full or discharged, or in the event the
Company shall fail to perform or comply with any other covenant, promise or
obligation to a Secured Party hereunder, such Secured Party may, but shall not
be required to, perform, pay, satisfy, discharge or bond the same for the
account of the Company, and all money so paid by such Secured Party, including
reasonable attorney's fees, shall be deemed an Obligation of the Company.
3.03 NOTICES. Any Secured Party or the Investment Advisor may at any
-------
time after the occurrence and continuance of an Event of Default notify
customers or account debtors that the Collateral has been assigned to such
Secured Party or of its secured interest therein and to direct such account
debtors or customers to make payment of all amounts due or to become due to the
Company directly to such Secured Party and upon such notification and at the
Company's expense to enforce collection of any such Collateral, and to adjust,
compromise or settle for cash, credit or otherwise upon any terms the amount of
payment thereof.
3.04 INSPECTION. Any Secured Party or the Investment Advisor or
----------
their designee may from time to time examine and inspect the Inventory,
Equipment or other Collateral and may from time to time examine, inspect and
copy all books and records with respect thereto or relevant to the Collateral
and/or Obligations during the Company's normal business hours upon reasonable
prior notice to the Company.
3.05 RIGHT OF ENTRY. Upon the occurrence of an Event of Default, any
--------------
Secured Party may (to the extent not prohibited by law), without charge, enter
any of the Company's premises, and until it completes the enforcement of its
rights in the Inventory or the Equipment or other Collateral subject to its
security interest hereunder and the sale or other disposition of any property
subject thereto, take possession of such premises without charge, rent or
payment therefor (through self help without judicial process and without having
first given notice or obtained an order of any court), or place custodians in
control thereof, remain on such premises and use the same for the purpose of
completing any work in progress, preparing any Collateral for disposition, and
disposition of or collecting any Collateral.
3.06 MORTGAGEE/LANDLORD WAIVERS. The Company shall, promptly
--------------------------
following the date hereof, cause each mortgagee of real property owned by the
Company and each landlord of real property leased by the Company to execute and
deliver instruments satisfactory in form and substance to each Secured Party by
which such mortgagee or landlord waives its rights, if any, in the Collateral
and acknowledges the right of such Secured Party to enter the premises to remove
the Collateral.
3.07 INDEMNIFICATION. The Company agrees to indemnify each Secured
---------------
Party and the Investment Advisor and their respective members, managers,
partners, officers, directors and employees and hold all of them harmless from
and against any and all injuries, claims, damages, judgments, liabilities, costs
and expenses (including, without limitation, reasonable fees and disbursements
of counsel), charges and encumbrances which may be incurred by or
-6-
asserted against them in connection with or arising out of or relating to the
Collateral or the Obligations, including any assertion, declaration or defense
of their claims, rights or security interest under the provisions of this
Agreement, permitting them to collect, settle or adjust Collateral or to deal
with account debtors in any way or in connection with the realization,
repossession, safeguarding, insuring or other protection of the Inventory, the
Equipment or other Collateral or in connection with the collecting, perfecting
or protecting each such Secured Party's liens and security interests hereunder,
or in connection with this Agreement or the enforcement of this Agreement or the
amendment of this Agreement, except to the extent resulting from such secured
party's bad faith or willful misconduct.
4. REMEDIES OF SECURED PARTY.
4.01 ENFORCEMENT. Upon the occurrence of any Event of Default, a
-----------
Secured Party shall have, in addition to all of its other rights under this
Agreement by operation of law or otherwise (which rights shall be cumulative),
all of the rights and remedies of a secured party under the Uniform Commercial
Code and shall have the right to enter upon any premises where such Collateral
is kept and retake possession thereof. Upon the occurrence of an Event of
Default, a Secured Party or the Investment Adviser or their designee may,
without demand, advertising or notice, all of which the Company hereby waives
(except as the same may be required by law), sell, lease, dispose of, deliver
and grant options to a third party to purchase, lease or otherwise dispose of
any and all Equipment, Inventory, Receivables, General Intangibles or other
security or Collateral held by it or for its account at any time or times in one
or more public or private sales or other dispositions, for cash, on credit or
otherwise, at such prices and upon such terms as such Secured Party, in its sole
discretion, deems advisable. The Company agrees that if notice of sale shall be
required by law such requirement shall be met if such notice is mailed, postage
prepaid, to the Company at its address set forth above or such other address as
it may have, in writing, provided to the Secured Parties, at least five (5) days
before the time of such sale or dispositions. Notice of any public sale shall
be sufficient if it describes the security or Collateral to be sold in general
terms, stating the amounts thereof, the nature of the business in which such
Collateral was created and the location and nature of the properties covered by
the other security interests or mortgages and the prior liens thereon. A
Secured Party or the Investment Adviser or their designee may postpone or
adjourn any sale of any Collateral from time to time by an announcement at the
time and place of the sale to be so postponed or adjourned without being
required to give a new notice of sale. A Secured Party or the Investment
Adviser or their designee may be the purchaser at any such sale if it is public,
free from any right of redemption, which the Company also waives, and payment
may be made, in whole or in part, in respect of such purchase price by the
application of the Obligations to the Secured Party. The Company, with respect
to its property constituting such Collateral, shall be obligated for, and the
proceeds of sale shall be applied first to, the reasonable costs of retaking,
assembling, finishing, collecting, refurbishing, storing, guarding, insuring,
preparing for sale, and selling the Collateral, including the reasonable fees
and disbursements of attorneys, auctioneers, appraisers and accountants employed
by a Secured Party or the Investment Adviser or their designee. Proceeds shall
then be applied to the payment, in whatever order such Secured Party or the
Investment Adviser or their designee may elect, of all of the Obligations. Such
Secured Party shall return any excess to the Company or to whomever may be fully
entitled to receive the
-7-
same or as a court of competent jurisdiction may direct. The Company shall
remain liable for any deficiency.
4.02 WAIVER. The Company waives any right, to the extent applicable
------
law permits, to receive prior notice of or a judicial or other hearing with
respect to any action or prejudgment remedy or proceeding by a Secured Party (or
the Investment Advisor or their designee) to take possession, exercise control
over, or dispose of any item of the Collateral in any instance (regardless of
where the same may be located) where such action is permitted under the terms of
this Agreement or by applicable law or of the time, place or terms of sale in
connection with the exercise of such Secured Party's rights hereunder and also
waives, to the fullest extent permitted by law, any bonds, security or sureties
required by any statute, rule or otherwise by law as an incident to any taking
of possession by such Secured Party or the Investment Adviser or their designee
of property subject to such Secured Party's lien. The Company also waives any
damages (direct, consequential or otherwise) occasioned by the enforcement of a
Secured Party's rights under this Agreement including the taking of possession
of any Collateral all to the extent that such waiver is permitted by law and to
the extent that such damages are not caused by such Secured Party's bad faith or
willful misconduct. These waivers and all other waivers provided for in this
Agreement have been negotiated by the parties and the Company acknowledges that
it has been represented by counsel of its own choice and has consulted such
counsel with respect to its rights hereunder.
4.03 OTHER RIGHTS. The Company agrees that no Secured Party shall
------------
have any obligation to preserve rights to any Collateral against prior parties
or to proceed first against any Collateral or to marshall any Collateral of any
kind for the benefit of any other creditors of the Company or any other Person.
Each Secured Party is hereby granted, to the extent that the Company is
permitted to grant a license or right of use, a license or other right to use,
without charge, labels, patents, copyrights, rights of use, of any name, trade
secrets, trade names, trademarks and advertising matter, or any property of a
similar nature of the Company as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and the
Company's rights under all licenses and any franchise, sales or distribution
agreements shall inure to each Secured Party's benefit.
4.04 DISPOSITION OF PROCEEDS. The proceeds of any sale or
-----------------------
disposition of all or any part of the Collateral shall be applied by each
Secured Party in the following order: (i) to the payment in full of the costs
and expenses of such sale or sales, collections, and the protection, declaration
and enforcement of any security interest granted hereunder including the
compensation of such Secured Party's agents and attorneys; (ii) to the payment
of the Obligations; and (iii) to the payment to the Company of any surplus then
remaining from such proceeds, subject to the rights of any holder of a lien on
the Collateral of which such Secured Party has actual notice. In the event that
the proceeds of any sale or other disposition of the Collateral are insufficient
to cover the principal of, and premium, if any, and interest on, the Obligations
secured thereby plus costs and expenses of the sale or other disposition, the
Company shall remain liable for any deficiency.
-8-
4.05 EXPENSES. The Company agrees that it shall pay all costs and
--------
expenses incurred in amending, implementing, perfecting, collecting, defending,
declaring and enforcing such Secured Party's rights and security interests in
the Collateral hereunder or under the Note Agreement, the Notes, the Warrants or
any other related document, or other instrument or agreement delivered in
connection herewith or therewith, including, but, not limited to, searches and
filings at all times, and such Secured Party's reasonable attorneys fees and
disbursements (regardless of whether any litigation is commenced, whether
default is declared hereunder, and regardless of tribunal or jurisdiction).
5. GENERAL PROVISIONS
5.01 TERMINATION. This Agreement shall remain in full force and
-----------
effect until all the Obligations shall have been indefeasible fully paid and
satisfied and, until such time, the Secured Party shall retain all security in
and title to all existing and future Equipment, Inventory, Receivables and
General Intangibles and other Collateral held by it hereunder.
5.02 REMEDIES CUMULATIVE. A Secured Party's rights and remedies
-------------------
under this Agreement shall be cumulative and non-exclusive of any other rights
or remedies which it may have under the Note Agreement, the Notes, the Warrants
or any other agreement or instrument, by operation of law or otherwise and may
be exercised alternatively, successively or concurrently as such Secured Party
may deem expedient.
5.03 BINDING EFFECT. This Agreement is entered into for the benefit
--------------
of the parties hereto and their successors and assigns. It shall be binding
upon and shall inure to the benefit of the said parties, their successors and
assigns.
5.04 NOTICES. Wherever this Agreement provides for notice to any
-------
party (except as expressly provided to the contrary), it shall be given in the
manner specified and shall be addressed as set forth in Section 9.5 of the Note
Agreement.
5.05 WAIVER. No delay or failure on the part of a Secured Party or
------
the Investment Advisor in exercising any right, privilege, remedy or option
hereunder shall operate as a waiver of such or any other right, privilege,
remedy or option, by such Secured Party or the Investment Advisor, and no waiver
shall be valid as to a Secured Party or the Investment Advisor, unless in
writing and signed by an officer or other authorized signatory of such Secured
Party or the Investment Advisor and then only to the extent therein set forth.
5.06 MODIFICATIONS AND AMENDMENTS. This Agreement and the other
----------------------------
agreements and instruments to which it refers constitute the complete agreement
between the parties with respect to the subject matter hereof and may not be
changed, modified, waived, amended or terminated orally, but only by a writing
signed by the party to be charged.
5.07 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
------------------------------------------
and warranties of the Company made or deemed made herein shall survive the
execution and delivery of this Agreement.
-9-
5.08 APPLICABLE LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
-------------------------------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK OR THE STATE COURTS OF NEW YORK SITTING IN NEW
YORK COUNTY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
5.09 SEVERABILITY. If any provision hereof shall be held to be void,
------------
illegal or unenforceable it shall be deemed severable from the remaining
provisions hereof which shall remain in full force and effect.
5.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
-------------------------
any number of counterparts and by different Parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
5.11 ASSIGNMENT. The Company may not assign or transfer its rights
----------
or obligations hereunder without the prior written consent of the Secured
Parties. Secured Parties may assign their rights under this Agreement to
transferees of the Notes.
5.12 ACTION OF SECURED PARTIES. Any action required or permitted to
-------------------------
be taken, or otherwise taken, by the Secured Parties shall be by a vote of a
majority-in-interest of the Secured Parties.
5.13 INVESTMENT ADVISOR. The Investment Advisor shall have no
------------------
obligation or responsibility hereunder of any kind, and may refrain from taking
any action for any reason or for no reason without incurring any liability to
any party. The Investment Advisor shall not be deemed a fiduciary or agent of
any party by virtue of this agreement.
5.14 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
----------------------------------
Agreement is determined to be unenforceable under the laws of the State of New
York, and if such provision would be enforceable under the laws of the State of
Washington, then it is agreed that the Courts of the State of New York shall
interpret and enforce such provision pursuant to the laws of the State of
Washington.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized, on the day and year first
above written.
-10-
METAWAVE COMMUNICATIONS
CORPORATION, as Company
By: _______________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-11-
THE BROWN & WILLIAMSON MASTER
RETIREMENT TRUST
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-12-
THE MAINSTAY FUNDS, ON BEHALF OF
ITS STRATEGIC INCOME FUND SERIES
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-13-
HIGHBRIDGE CAPITAL CORPORATION
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-14-
THE MAINSTAY FUNDS, ON BEHALF OF
ITS HIGH YIELD CORPORATE BOND FUND SERIES
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-15-
MAINSTAY VP SERIES FUND INC. ON BEHALF OF
ITS HIGH YIELD CORPORATE BOND PORTFOLIO
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-16-
POLICE OFFICERS PENSION SYSTEM OF THE
CITY OF HOUSTON
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-17-
VULCAN MATERIALS COMPANY HIGH YIELD
ACCOUNT
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-18-
THE 1199 HEALTH CARE EMPLOYEES PENSION
FUND
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: ______________________________________
Name: Jeffrey B. Platt
Title: Director
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-19-
BT HOLDINGS (NY), INC.
By: ______________________________________
Name:
Title:
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-20-
IMPERIAL BANK
By: ______________________________________
Name: Jim Ellison
Title: Senior Vice President
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-21-
POWERWAVE TECHNOLOGIES, INC.
By: ______________________________________
Name: Bruce C. Edwards
Title: President and Chief Executive
Officer
[SIGNATURE PAGES CONTINUED ON NEXT PAGE]
-22-
BANKAMERICA INVESTMENT CORPORATION
By: ______________________________________
Name:
Title:
-23-
Schedule of Lenders
- -------------------
The Brown & Williamson Master Retirement Trust (Registered holder: Iceship &
Co.)
The Mainstay Funds, on behalf of its Strategic Income Fund Series (Registered
holder: Hare & Co.)
Highbridge Capital Corporation (Registered holder: Bear Stearns Securities
Corp.)
The Mainstay Funds, on behalf of its High Yield Corporate
Bond Fund Series (Registered holder: Daffodil & Co.)
Mainstay VP Series Fund Inc., on behalf of its High Yield Corporate
Bond Portfolio (Registered holder: Hare & Co.)
Police Officers Pension System of the City of Houston (Registered holder: Booth
& Co.)
Vulcan Materials Company High Yield Account (Registered holder: Booth & Co.)
The 1199 Health Care Employees Pension Fund (Registered holder: Booth & Co.)
c/o MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019
BT Holdings (NY), Inc. (Registered holder: BT Alex Brown Inc.)
14 Wall Street
7th Floor
New York, New York 10005
Imperial Bank
777 108th Avenue NE
Bellevue, Washington 98004-6672
Powerwave Technologies, Inc.
2026 McGaw Avenue
Irvine, California 92614
BankAmerica Investment Corporation
231 South LaSalle Street
Chicago, Illinois 60697
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