Exhibit 10.1

 

 

 

 
SECURITIES PURCHASE AGREEMENT
 
between
 
PROXIM WIRELESS CORPORATION
 
and
 
LLOYD I. MILLER, III, as a Purchaser
 
MILFAM II L.P., as a Purchaser
 

 
Dated as of July 25, 2008
 

 
 

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TABLE OF CONTENTS
 

 
ARTICLE I PURCHASE AND SALE OF SECURITIES
- 1 -
   
SECTION 1.01.
The Notes
- 1 -
     
SECTION 1.02.
The Warrant
- 1 -
     
SECTION 1.03.
Purchase and Sale of the Securities
- 1 -
     
SECTION 1.04.
Payments and Endorsements
- 2 -
     
SECTION 1.05.
Interest Rate for Note; Payment of Principal for Note
- 2 -
     
SECTION 1.06.
Prepayment of Notes
- 3 -
     
SECTION 1.07.
Payment on Non-Business Days
- 3 -
     
SECTION 1.08.
Registration of Notes
- 4 -
     
SECTION 1.09.
Transfer and Exchange of Notes
- 4 -
     
SECTION 1.10.
Replacement of Note
- 4 -
     
SECTION 1.11.
Cancellation of PIPE Warrants
- 5 -
     
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
- 5 -
   
SECTION 2.01.
Organization, Qualifications and Corporate Power
- 5 -
     
SECTION 2.02.
Authorization of Agreements, Etc.
- 6 -
     
SECTION 2.03.
Validity
- 6 -
     
SECTION 2.04.
Authorized Capital Stock
- 6 -
     
SECTION 2.05.
SEC Filings, Other Filings and Regulatory Compliance
- 7 -
     
SECTION 2.06.
Listing
- 7 -
     
SECTION 2.07.
Governmental Approvals
- 7 -
     
SECTION 2.08.
Offering of the Securities
- 8 -
     
SECTION 2.09.
No Integrated Offering
- 8 -
     
SECTION 2.10.
Material Changes
- 8 -
     
SECTION 2.11.
Litigation
- 9 -
     
SECTION 2.12.
Ownership of Property; Liens
- 9 -
     
SECTION 2.13.
Intellectual Property Rights
- 9 -
     
SECTION 2.14.
Insurance
- 10 -
     
SECTION 2.15.
Compliance with Other Instruments
- 10 -
     
SECTION 2.16.
Tax Returns and Payments
- 10 -

 
 

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SECTION 2.17.
Environmental and Safety Laws
- 11 -
     
SECTION 2.18.
ERISA
- 11 -
     
SECTION 2.19.
Brokers
- 11 -
     
SECTION 2.20.
Labor Relations
- 11 -
     
SECTION 2.21.
Customers
- 11 -
     
SECTION 2.22.
Solvency
- 12 -
     
SECTION 2.23.
Representations Complete
- 12 -
     
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
- 12 -
   
SECTION 3.01.
Requisite Power and Authority
- 12 -
     
SECTION 3.02.
Investment Representations
- 12 -
     
SECTION 3.03.
Purchaser Bears Economic Risk
- 13 -
     
SECTION 3.04.
Acquisition for Own Account
- 13 -
     
SECTION 3.05.
Purchaser Can Protect Its Interest
- 13 -
     
SECTION 3.06.
Accredited Investor
- 13 -
     
SECTION 3.07.
Legends
- 13 -
     
ARTICLE IV CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
- 14 -
   
SECTION 4.01.
Agreement
- 14 -
     
SECTION 4.02.
Notes
- 14 -
     
SECTION 4.03.
Warrants
- 15 -
     
SECTION 4.04.
Subordination Agreement
- 15 -
     
SECTION 4.05.
Comerica Consent
- 15 -
     
SECTION 4.06.
Legal Opinion
- 15 -
     
SECTION 4.07.
Representations and Warranties to be True and Correct
- 15 -
     
SECTION 4.08.
Performance
- 15 -
     
SECTION 4.09.
All Proceedings to be Satisfactory
- 15 -
     
SECTION 4.10.
Supporting Documents
- 14 -
     
ARTICLE V COVENANTS OF THE COMPANY
- 16 -
   
SECTION 5.01.
Financial Statements, Reports, Notices, Etc.
- 16 -
     
SECTION 5.02.
Corporate Existence; Maintenance of Business
- 18 -
     
SECTION 5.03.
Properties, Insurance
- 18 -
     
SECTION 5.04.
Use of Proceeds
- 18 -
     
SECTION 5.05.
Compliance with Laws
- 18 -

 
 

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SECTION 5.06.
Keeping of Records and Books of Account
- 18 -
     
SECTION 5.07.
Dividends and Certain Other Restricted Payments
- 18 -
     
SECTION 5.08.
Capital Expenditures
- 18 -
     
SECTION 5.09.
Mergers, Consolidations and Asset Sales
- 19 -
     
SECTION 5.10.
Acquisitions
- 19 -
     
SECTION 5.11.
Prepayment of Indebtedness
- 19 -
     
SECTION 5.12.
Incurrence of Indebtedness
- 19 -
     
SECTION 5.13.
Change in the Nature of Business
- 20 -
     
SECTION 5.14.
Encumbrances
- 21 -
     
SECTION 5.15.
Access to Facilities
- 21 -
     
SECTION 5.16.
Intellectual Property Rights
- 21 -
     
SECTION 5.17.
Taxes
- 22 -
     
ARTICLE VI EVENT OF DEFAULT
- 22 -
   
ARTICLE VII MISCELLANEOUS
- 24 -
   
SECTION 7.01.
Expenses
- 24 -
     
SECTION 7.02.
Survival of Agreements
- 24 -
     
SECTION 7.03.
Indemnification
- 24 -
     
SECTION 7.04.
Parties in Interest
- 24 -
     
SECTION 7.05.
Notices
- 24 -
     
SECTION 7.06.
Governing Law
- 25 -
     
SECTION 7.07.
Entire Agreement
- 26 -
     
SECTION 7.08.
Counterparts
- 26 -
     
SECTION 7.09.
Due Diligence
- 26 -
     
SECTION 7.10.
Successors and Assigns
- 26 -
     
SECTION 7.11.
Amendments and Waivers; Exercise of Rights
- 26 -
     
SECTION 7.12.
Severability
- 27 -
     
SECTION 7.13.
Titles and Subtitles
- 27 -
     
SECTION 7.14.
Jointly Drafted
- 27 -
     
SECTION 7.15.
Further Assurances
- 27 -
     

 
 

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THIS SECURITIES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time) (the “Agreement”) is dated as of July  25, 2008, by
and between Proxim Wireless Corporation (f/k/a Terabeam, Inc.), a Delaware
corporation (the “Company”) and the purchasers named in the attached Schedule 1
hereto (each individually a “Purchaser” and collectively the “Purchasers”).
 
WHEREAS, the Company wishes to issue and sell to the Purchasers (x) $3,000,000
in the initial aggregate stated principal amount of its promissory notes (as
amended, supplemented, or otherwise modified from time to time, and together
with any note or notes issued in exchange for or in replacement thereof,
individually, a “Note” and, collectively, the “Notes”) and (y) warrants to
purchase an aggregate amount of 1,250,000 shares of Company common stock, par
value $0.01, at an exercise price of $0.53 (as amended, supplemented, or
otherwise modified from time to time, and together with any warrant or warrants
issued in exchange for or in replacement thereof, individually a “Warrant” and,
collectively, the “Warrants”) (collectively the Notes and the Warrants referred
to herein as the “Securities”); and
 
WHEREAS, the Company will use the funds received in connection with the purchase
of the Securities by the Purchasers for general corporate purposes; and
 
WHEREAS, subject to the foregoing recitals, the Purchasers, severally, wish to
purchase the Securities on the terms and subject to the conditions set forth in
this Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
 
ARTICLE I

 
PURCHASE AND SALE OF SECURITIES
 
SECTION 1.01.    The Notes.  On the terms and subject to the conditions hereof,
the Company has authorized and agreed to issue and sell to the Purchasers, in
the respective initial stated principal amounts set forth in the schedule of
Purchasers attached hereto in Schedule 1 (the “Schedule of Purchasers”), the
Company’s Promissory Notes, due July 25, 2011 (the “Maturity Date”), in the
original aggregate stated principal amount of $3,000,000.  The Notes will be
substantially in the form set forth in Exhibit A hereto.
 
SECTION 1.02.    The Warrant.  On the terms and subject to the conditions
hereof, the Company has authorized and agreed to issue to the Purchasers pro
rata, according to each Purchaser’s proportion of the aggregate principal amount
of the Notes, warrants for the purchase of an aggregate of 1,250,000 shares of
the Company’s common stock at an exercise price of $0.53 with a term of ten (10)
years.  The Warrants will be substantially in the form set forth as Exhibit B.
 
SECTION 1.03.    Purchase and Sale of the Securities.  Subject to and in
reliance upon the representations, warranties, terms and conditions of this
Agreement, the Purchasers, severally and not jointly, agree to purchase, the
Securities set forth opposite their respective names in the Schedule of
Purchasers set forth on Schedule I for the aggregate cash purchase price set
forth therein.  The closing of such purchase and sale (the “Closing”) will be
held at the office of
 

 
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Andrews Kurth LLP, 450 Lexington Ave., New York, NY 10017, on July 25, 2008 (the
“Closing Date”) at 10:00 A.M., Eastern Standard Time, or on such other date and
at such time as may be mutually agreed upon.  At the Closing, the Company will
issue and deliver to each Purchaser (x) one Note, payable to the order of such
Purchaser, in the principal amount set forth opposite such Purchaser’s name in
the Schedule of Purchasers set forth on Schedule I and (y) a warrant, registered
in the name of such Purchaser and evidencing the number of Warrants set opposite
such Purchaser’s name in the Schedule of Purchasers set forth on Schedule
I.  Such deliveries will be made against delivery to the Company of a wire
transfer by each Purchaser to the account of the Company, in the amount (which
reflects the reduction as set forth in the next sentence of this Section 1.03)
set forth opposite the name of such Purchaser in the Schedule of Purchasers
under the heading “Aggregate Net Purchase Price for Securities.”  The Aggregate
Net Purchase Price for Securities owed by each Purchaser to the Company has been
calculated by taking into account a fee payable by the Company to the Purchasers
equal to 1.50% of the aggregate principal amount of the Notes.  The amount of
such fee is set forth opposite the name of each Purchaser on the Schedule of
Purchasers under the heading “Fee Amount.”
 
SECTION 1.04.    Payments and Endorsements.  Payments of principal and interest
on the Notes will be made directly by check duly mailed or delivered to the
Purchasers at their addresses referred to in the Schedule of Purchasers attached
as Schedule I or made to the account of the Purchaser by wire transfer referred
to in the Schedule of Purchasers attached as Schedule I or at such other address
or account as such Purchaser may subsequently request in any notice delivered by
such Purchaser to the Company.
 
SECTION 1.05.    Interest Rate for Note; Payment of Principal for Note.  The
Notes will accrue interest at the rate of sixteen percent (16%) per
annum.  Interest will be due and payable monthly in arrears on the last day of
each calendar month (each, an “Interest Payment Date”) and shall be computed on
the basis of a 360-day year and paid for the actual number of days elapsed, with
the first interest payment due July 31, 2008.  In lieu of paying in cash the
interest accrued to any Interest Payment Date, and at the Company’s sole
discretion, the interest may be paid in kind at the rate of nineteen percent
(19%) per annum, compounding monthly, in which case the accrued interest will be
added to the principal amount of the Notes on the applicable Interest Payment
Date, and interest will accrue on such aggregate principal amount
thereafter.  The principal amount owed to the Purchasers under the Notes
(including capitalized interest) and all accrued but unpaid interest thereon
shall be due and payable in full on the Maturity Date unless otherwise required
to be paid earlier pursuant to the terms and conditions of this Agreement,
including, without limitation, if earlier prepaid pursuant to the terms and
conditions set forth in Section 1.06 herein or accelerated pursuant to the terms
and conditions set forth in Article VI herein.  In the event any payment under a
Note is not timely made when due, interest will accrue on such late payment at
an amount equal to twenty-two percent (22%) per annum from and including the
date such late payment was due to (but excluding) the date such late payment is
paid to the Purchasers.  All amounts payable under the Notes and hereunder shall
be paid in lawful money of the United States without setoff or withholding of
any kind.
 
SECTION 1.06.     Prepayment of Notes.  The Notes will be payable by the Company
prior to the Maturity Date as follows:
 

 
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(a)           Voluntary Prepayment by the Company.  At any time until the Notes
have been repaid in full, the Company may, at its sole option, redeem, all or
any portion of the  outstanding principal amount of the Notes (including any
capitalized interest added to the principal amount of the Notes thereto) (such
portion of the outstanding principal amount so prepaid, hereinafter referred to
for purposes of this Section 1.06 as the “Prepayment Amount”) by paying to the
holders of the Notes 102% of the Prepayment Amount, with such payments to be
apportioned ratably among the Purchasers or their transferees according to the
unpaid principal balance and accrued but unpaid interest thereon to which such
payments relate; provided, however, that the Company shall provide the
Purchasers with not less than five (5) Business Days’ advance notice of any such
prepayment.  For purposes of this Agreement, the term “Business Day” shall mean
any day of the week other than Saturday, Sunday or any other day of the week on
which commercial banks in the State of New York are authorized or required by
law to be closed.
 
(b)           Mandatory Prepayment on Change of Control.  At any time until the
Notes have been repaid in full, the Company will redeem the Notes in their
entirety upon the occurrence of a Change of Control by paying to the holders of
the Notes 102% of the entire outstanding principal amount then due and owing
under the Notes (including any capitalized interest added to principal amount of
the Notes thereto) along with any and all accrued but unpaid interest through
the date of repayment on the closing date of the Change of Control.  Such
payments will be apportioned ratably among the Note holders according to the
unpaid principal balance and accrued but unpaid interest thereon to which such
payments relate.  “Change of Control” means the event of (i) a merger,
consolidation, recapitalization or share exchange in which the holders of the
voting stock of the Company immediately prior to such merger, consolidation,
recapitalization or share exchange will not own 50% or more of the voting stock
of the continuing or surviving corporation or other entity, or the parent
company of such corporation or other entity, immediately after such merger,
consolidation, recapitalization or share exchange, (ii) the sale, assignment,
conveyance, transfer, lease or other disposition (other than the grant of a
security interest) of all or substantially all of the assets of Company to any
person or group of related persons, or (iii) any sale or other disposition of
the voting stock of the Company representing 50% or more of the total voting
power of the Company’s outstanding capital stock in a single transaction or a
series of related transactions to any person, or group of related persons.
 
SECTION 1.07.    Payment on Non-Business Days.  Whenever any payment to be made
under any Note or hereunder is due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time will in such case be included in the computation of payment of interest
due.
 
SECTION 1.08.    Registration of Notes.  The Company will maintain at its
principal office a register of the Notes and will record therein the names and
addresses of the registered holders of the Notes, the address to which notices
are to be sent and the address to which payments are to be made as designated by
the registered holder if other than the address of the holder, and the
particulars of all transfers, exchanges and replacements of Notes.  No transfer
of a Note will be valid unless made on such register for the registered holder
or his executors or administrators or his or their duly appointed attorney, upon
surrender therefor for exchange as hereinafter provided, accompanied by an
instrument in writing, in form and execution reasonably
 

 
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satisfactory to the Company.  Each Note issued hereunder, whether originally or
upon transfer, exchange or replacement of a Note or Notes, will be registered on
the date of execution thereof by the Company and will be dated the date to which
interest has been paid on such Notes or Note.  The registered holder of a Note
will be that person in whose name the Note has been so registered by the
Company.  A registered holder will be deemed the owner of a Note for all
purposes of this Agreement and, subject to the provisions hereof, will be
entitled to the principal and interest evidenced by such Note free from all
equities or rights of setoff or counterclaim between the Company and the
transferor of such registered holder or any previous registered holder of such
Note.
 
SECTION 1.09.    Transfer and Exchange of Notes.  The registered holder of any
Note may, prior to maturity or prepayment thereof and in accordance with the
terms of the Note, surrender such Note or Notes at the principal office of the
Company for transfer or exchange; provided, however, the registered holder of
any Note or Notes will not transfer any such Note without providing notice to
the  Company.  Within a reasonable time after notice to the Company from a
registered holder of its intention to make such exchange and without expense
(other than transfer taxes, if any) to such registered holder, the Company will
issue in exchange therefor another Note or Notes, in such denominations as
requested by the registered holder, for the same aggregate principal amount as
the unpaid principal amount of the Note or Notes so surrendered and having the
same maturity and rate of interest, containing the same provisions and subject
to the same terms and conditions as the Note or Notes so surrendered.  Each new
Note will be made payable to such person or persons, or registered assigns, as
the registered holder of such surrendered Note or Notes may designate, and such
transfer or exchange will be made in such a manner that no gain or loss of
principal or interest will result therefrom.
 
SECTION 1.10.    Replacement of Note.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, if requested in the case of any such loss, theft or destruction, upon
delivery of an indemnity bond or other agreement or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of such Note, the Company will issue a new Note, of
like tenor and amount and dated the date to which interest has been paid, in
lieu of such lost, stolen, destroyed or mutilated Note; provided, however, if
any Note of which a Purchaser whose name is set forth in the Schedule of
Purchasers attached as Schedule 1, its nominee, or any of its partners is the
registered holder is lost, stolen or destroyed, the affidavit of the President,
Treasurer or any Assistant Treasurer or any other authorized representative of
the registered holder setting forth the circumstances with respect to such loss,
theft or destruction will be accepted as satisfactory evidence thereof, and no
indemnification bond or other security will be required as a condition to the
execution and delivery by the Company of a new Note in replacement of such lost,
stolen or destroyed Note other than the registered holder’s written agreement to
indemnify the Company.
 
SECTION 1.11.    Cancellation of PIPE Warrants. The Company and Purchasers
hereto agree that automatically upon the Closing Date, those certain warrants
issued by the Company to Lloyd I. Miller, III and Milfam II L.P. respectively,
to each acquire 462,500 shares of Company common stock at an initial exercise
price of $2.45 pursuant to that certain Purchase Agreement dated as of July 19,
2007, by and among the Company and certain accredited investors thereto,
including the Purchasers hereto, shall be deemed cancelled and shall be of no
 

 
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further force and effect.  Without limiting the cancellation of the warrants as
described in the preceding sentence without the need for any other documentation
or actions, the Purchasers agree to return the original of those warrants to the
Company within five (5) business days after the Closing Date.
 
ARTICLE II

 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company hereby represents and warrants to the Purchasers as follows (which
representations and warranties are supplemented by the Company’s filings (the
“Exchange Act Filings”) under the Securities Exchange Act of 1934 (the “Exchange
Act”), copies of which have been provided or made available to the Purchasers):
 
SECTION 2.01.    Organization, Qualifications and Corporate Power.  
 
(a)           The Company is a corporation, duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization. The Company
has the corporate power and authority to own and operate its properties and
assets, and to execute and deliver (i) this Agreement, (ii) the Securities to be
issued in connection with this Agreement and (iii) all other agreements related
to this Agreement and the Securities and referred to herein, and to issue and
sell the Securities and to carry out the provisions of this Agreement and the
aforementioned related agreements and to carry on its business as presently
conducted.  The Company is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except where the failure to do so would not
reasonably be expected to cause a Material Adverse Effect.
 
(b)           The Company has no active Subsidiaries with assets of any kind,
other than as set forth on Schedule 2.01(b).  The Company does not (i) own of
record or beneficially, directly or indirectly, (A) any shares of capital stock
or securities convertible into capital stock of any other active corporation or
(B) any participating interest in any partnership, joint venture or other
non-corporate business enterprise or (ii) control, directly or indirectly, any
other entity, other than as set forth on Schedule 2.01(b).
 
Each material direct and indirect Subsidiary of the Company, the direct owner of
such Subsidiary and its percentage ownership thereof, is set forth on Schedule
2.01(b).  For the purpose of this Agreement, a “Subsidiary” of any person or
entity means (i) a corporation or other entity whose shares of stock or other
ownership interests having ordinary voting power (other than stock or other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such corporation, or other
persons or entities performing similar functions for such person or entity, are
owned, directly or indirectly, by such person or entity or (ii) a corporation or
other entity in which such person or entity owns, directly or indirectly, more
than 50% of the equity interests at such time.
 
SECTION 2.02.     Authorization of Agreements, Etc.  
 
(a)           The execution and delivery by the Company of this Agreement and
the other Loan Documents, and the performance by the Company of its obligations
hereunder and
 

 
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thereunder, the issuance, sale and delivery of the Securities have been duly
authorized by all requisite corporate action and will not (i) violate any
provision of law, any order of any court or other agency of government,
(ii) violate the Certificate of Incorporation or the By-laws of the Company or
any Subsidiary, each as amended, (iii) violate any provision of any indenture,
agreement or other instrument to which the Company, any Subsidiary or any of its
properties or assets is bound, or (iv) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument.
 
(b)           The Securities have been duly authorized and, when issued in
accordance with this Agreement, will be free and clear of all liens, charges,
restrictions, claims and encumbrances imposed by or through the Company.  The
issuance, sale and delivery of the Securities are not subject to any preemptive
right of shareholders of the Company or any Subsidiary or to any right of first
refusal or other right in favor of any person other than the Purchasers.  When
the Warrants are exercised in accordance with the terms therein, the underlying
common shares issued thereunder will be duly authorized, validly issued, fully
paid and non-assesable.
 
SECTION 2.03.    Validity.  Each of this Agreement and the other Loan Documents
have been duly executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company enforceable in accordance with
their terms, except
 
(a)           as may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights; and (b) general principles of equity that
restrict the availability of equitable and legal remedies.
 
SECTION 2.04.    Authorized Capital Stock.  The authorized capital stock of the
Company consists of 100,000,000 shares of common stock, $0.01 par value per
share and 4,500,000 shares of preferred stock, $0.01 par value per share. As of
the date of this Agreement 23,519,069 shares of common stock and zero shares of
preferred stock were validly issued and outstanding, fully paid and
non-assessable.  Except as disclosed in SEC Reports (as defined below), there
are no outstanding options, warrants and convertible securities of the Company,
and any other rights to acquire securities of the Company.  All outstanding
securities of the Company are validly issued, fully paid and non-assessable.   
 
SECTION 2.05.    SEC Filings, Other Filings and Regulatory Compliance.  The
Company has filed all proxy statements, reports and other documents required to
be filed by it under the Exchange Act.  The Company has delivered or made
accessible to the Purchasers true, complete and accurate copies of:  (a) the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2007, (b) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2008, (c) the Company’s definitive proxy statement dated April
11, 2008 relating to its 2008 Annual Meeting of Stockholders, and (d) all the
Company’s Current Reports on Form 8-K filed since December 31, 2007
(collectively, the “SEC Reports”).  Each SEC Report was, at the time of its
filing, in substantial compliance with the requirements of its respective form
and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.  The
SEC Reports when filed, complied in all material respects with all applicable
 

 
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requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, if and to
the extent applicable, and the rules and regulations of the Securities and
Exchange Commission thereunder applicable to the SEC Reports.  Each balance
sheet included in the SEC Reports (including any related notes and schedules)
fairly presents in all material respects the consolidated financial position of
the Company as of its date, and each of the other financial statements included
in the SEC Reports (including any related notes and schedules) fairly presents
in all material respect the consolidated results of operations of the Company
for the periods or as of the dates therein set forth in accordance with
generally accepted accounting principles (“GAAP”).  Such financial statements
included in the SEC Reports were, at the time they were filed, consistent with
the books and records of the Company and its Subsidiaries in all material
respects and complied as to form in all material respects with then applicable
accounting requirements and with the rules and regulations of the SEC with
respect thereto.  The Company keeps accounting records in which all material
assets and liabilities, and all material transactions, including off-balance
sheet transactions, of the Company are recorded in accordance with GAAP.
 
SECTION 2.06.    Listing.  The Company’s common stock is listed for trading on
the NASDAQ Capital Market and, except as disclosed in the SEC Reports, satisfies
all requirements for the continuation of such listing.  Except as disclosed in
SEC Reports, the Company has not received any currently effective notice that
its common stock will be delisted from NASDAQ Capital Market or that its common
stock does not meet all requirements for listing.
 
SECTION 2.07.    Governmental Approvals.  Subject to the accuracy of the
representations and warranties of the Purchasers set forth herein, no
registration or filing with, or consent or approval of or other action by, any
federal, state or other governmental agency or instrumentality, including,
without limitation, the SEC or NASDAQ, is or will be necessary for the valid
execution, delivery and performance by the Company of this Agreement, the
issuance, sale and delivery of the Securities, other than filing a Form D with
the SEC and filings pursuant to state securities laws (all of which filings have
been made by the Company, other than those which are required or permitted to be
made after the Closing and which will be duly made on a timely basis) in
connection with the sale of the Securities.
 
SECTION 2.08.    Offering of the Securities.  Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
the offer, sale and issuance of the Securities will be exempt from the
registration requirements of the Securities Act, and will have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable federal and
state securities laws.
 
SECTION 2.09.    No Integrated Offering.  The Company, nor any Subsidiary, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would cause the offering of the Securities pursuant to
this Agreement or any related agreements to be integrated with prior offerings
by the Company for purposes of the Securities Act which would prevent the
Company from selling the Securities pursuant to Rule 506 under the Securities
Act, or any applicable exchange-related stockholder approval provisions, nor
will the Company nor any Subsidiary take any action or steps that would cause
the offering of the Securities to be integrated with other offerings.
 

 
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SECTION 2.10.    Material Changes.  Except as set forth in Schedule 2.10, since
December 31, 2007, there has not been (i) any change in the business, assets,
liabilities, condition (financial or otherwise), properties, operations or
prospects of the Company or any Subsidiaries, which individually or in the
aggregate has had, or could reasonably be expected to have a material adverse
effect on the business, assets, liabilities, condition (financial or otherwise),
properties, operations or prospects of the Company or any Subsidiary, taken as a
whole (a “Material Adverse Effect”); (ii) any resignation or termination of any
officer, key employee or group of employees of the Company or any Subsidiary;
(iii) any material change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise; (iv) any damage, destruction or loss, whether
or not covered by insurance, which has had, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect; (v) any
waiver by the Company or any Subsidiary of a valuable right or of a material
debt owed to it; (vi) any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business; (vii) any material change in any
compensation arrangement or agreement with any employee, officer, or director of
the Company; (viii) any declaration or payment of any dividend or other
distribution of the assets of the Company; (ix) any debt, obligation or
liability incurred, assumed or guaranteed by the Company, except those for
immaterial amounts and for current liabilities incurred in the ordinary course
of business; (x) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets owned by the Company or any
Subsidiary; (xi) any change in any material agreement to which the Company or
any Subsidiary is a party or by which it is bound which either individually or
in the aggregate has had, or could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; or (xii) any other event or
condition of any character that, either individually or in the aggregate, has
had, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
 
SECTION 2.11.    Litigation.  Except as disclosed in Schedule 2.11 attached
hereto, there is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company or any Subsidiary
that questions the validity of this Agreement or the right of the Company to
enter into it, or to consummate the transactions contemplated hereby, or that
could reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect on the Company.  The foregoing includes, without
limitation, actions pending or, to the Company’s knowledge, threatened involving
the prior employment of any of the Company’s employees or their use in
connection with the Company’s business of any information or techniques
allegedly proprietary to any of their former employers.  Neither the Company nor
any of its Subsidiaries is a party to or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or governmental
authority.  Except as disclosed in Schedule 2.11 attached hereto, there is no
action, suit, proceeding or investigation by the Company or any Subsidiary
currently pending or which the Company or any of its Subsidiaries currently
intends to initiate, which could reasonably be expected to have a Material
Adverse Effect.
 
SECTION 2.12.    Ownership of Property; Liens.  Except as set forth on Schedule
2.12 attached hereto, the Company and each of its Subsidiaries has good and
marketable title to its properties and assets, and good title to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance
or charge, other than:  (a) those resulting from taxes which have
 

 
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not yet become delinquent; (b) minor liens and encumbrances which it is to the
Company’s belief do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company or any of its
Subsidiaries; and (c) those that have otherwise arisen in the ordinary course of
business.  All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company and its Subsidiaries are in good
operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used.  Except as set forth on Schedule 2.12
attached hereto, the Company and its Subsidiaries are in compliance with all
material terms of each lease to which it is a party or is otherwise bound.
 
SECTION 2.13.    Intellectual Property Rights.  The Company and its Subsidiaries
owns or possesses the licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
necessary to enable it to conduct its business as now operated (the
“Intellectual Property”).  Except as set forth in Schedule 2.13 attached hereto,
there are no material outstanding options, licenses or agreements relating to
the Intellectual Property, nor is the Company or its Subsidiaries bound by or a
party to any material options, licenses or agreements relating to the patents,
patent applications, patent rights, inventions, know-how, trade secrets,
trademarks, trademark applications, service marks, service names, trade names or
copyrights of any other person or entity.  Except as set forth in Schedule 2.13
attached hereto, there is no claim or action or proceeding pending or, to the
Company’s knowledge, threatened that challenges the right of the Company or its
Subsidiaries with respect to any Intellectual Property.  Except as set forth in
Schedule 2.13 attached hereto, to the knowledge of the Company, the Company’s
and its Subsidiaries’ Intellectual Property does not infringe upon any
intellectual property rights of any other person which, if the subject of an
unfavorable decision, ruling or finding would have a Material Adverse Effect.
 
SECTION 2.14.    Insurance.  The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company and its Subsidiaries believe to
be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged.
 
SECTION 2.15.    Compliance with Other Instruments.  Neither the Company nor any
of its Subsidiaries is in violation or default of (x) any term of its Charter or
Bylaws, or (y) of any provision of any indebtedness, mortgage, indenture,
contract, agreement or instrument to which it is party or by which it is bound
or of any judgment, decree, order or writ, which violation or default, in the
case of this clause (y), has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  The
execution, delivery and performance of and compliance with the Loan Documents by
the Company to which it is a party, and the issuance and sale of the Securities
will not, with or without the passage of time or giving of notice, result in any
such material violation, or be in conflict with or constitute a default under
any such term or provision or result in the suspension, revocation, impairment,
forfeiture or nonrenawal of any permit, license, authorization or approval
applicable to the Company or its Subsidiaries, its businesses or operations or
any of its assets or properties.
 
SECTION 2.16.    Tax Returns and Payments.  The Company and its Subsidiaries
have timely filed all tax returns (federal, state and local) required to be
filed by it.  All taxes shown to
 

 
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be due and payable on such returns, any assessments imposed, and all other taxes
due and payable by the Company and its Subsidiaries on or before the Closing,
have been paid or will be paid prior to the time they become
delinquent.  Neither the Company nor any of its Subsidiaries has been advised:
(a) that any of its returns, federal, state or other, have been or are being
audited as of the date hereof; or (b) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes.  Neither the Company nor
any of its Subsidiaries has knowledge of any liability of any tax to be imposed
upon its properties or assets as of the date of this Agreement that is not
adequately provided for.  The statements in this Section 2.16 are qualified by
Schedule 2.16.
 
SECTION 2.17.    Environmental and Safety Laws.  Neither the Company nor any of
its Subsidiaries is in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, which violation
has had, or could reasonably be expected to have, either individually or in the
aggregate with all other such violations, a Material Adverse Effect and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.
 
SECTION 2.18.    ERISA.  Based upon the Employee Retirement Income Security Act
of 1974 (“ERISA”), and the regulations and published interpretations
thereunder:  (i) neither the Company nor any of its Subsidiaries has engaged in
any Prohibited Transactions (as defined in Section 406 of ERISA and Section 4975
of the Internal Revenue Code of 1986, as amended (the “Code”)); (ii) the Company
and its Subsidiaries have met all applicable minimum funding requirements under
Section 302 of ERISA in respect of its plans; (iii) neither the Company nor any
of its Subsidiaries has any knowledge of any event or occurrence which would
cause the Pension Benefit Guaranty Corporation to institute proceedings under
Title IV of ERISA to terminate any employee benefit plan(s); (iv) neither the
Company nor any of its Subsidiaries has any fiduciary responsibility for
investments with respect to any plan existing for the benefit of persons other
than the Company’s or such Subsidiary’s employees; and (v) neither the Company
nor any of its Subsidiaries has withdrawn, completely or partially, from any
multi-employer pension plan so as to incur liability under the Multiemployer
Pension Plan Amendments Act of 1980.
 
SECTION 2.19.    Brokers.  The Company and its Subsidiaries have not employed,
and are not subject to the valid claim of, any broker, finder, consultant or
other intermediary in connection with the transactions contemplated hereby who
might be entitled to a fee or commission from the Company or its Subsidiaries in
connection with such transactions.
 
SECTION 2.20.    Labor Relations.  No labor or employment dispute exists or, to
the knowledge of the Company, is imminent or threatened, with respect to any of
the employees or consultants of the Company or any Subsidiary that has, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
SECTION 2.21.    Customers.  Neither the Company nor any Subsidiary has received
any actual notice that any of its top ten (10) customers has ceased, or intends
to cease, to use its services, or has substantially reduced, or intends to
substantially reduce, the use of such services at any time except as set forth
on Schedule 2.21.
 

 
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SECTION 2.22.    Solvency.  Based on the financial condition of the Company as
of the date hereof and after the transactions contemplated by this Agreement,
(i) the fair saleable value of the Company assets exceeds the amount that will
be required to be paid on or in respect of the Company’s existing debts and
other liabilities (including known and contingent liabilities) as they mature;
(ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business for the current fiscal year as now conducted and as proposed to
be conducted, including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debts
when such amounts are required to be paid.
 
SECTION 2.23.    Representations Complete.  The representations and warranties
made by the Company in this Agreement, and the statements made in any
certificates furnished by the Company pursuant to this Agreement, taken as a
whole, do not contain and will not contain, as of their respective dates and as
of the Closing, any untrue statement of a material fact or omit to state any
material fact necessary in order to make such statements, taken as a whole, in
light of the circumstances under which they were made, not misleading.
 
ARTICLE III

 
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
 
Each Purchaser severally, and not jointly, represents and warrants to the
Company that:
 
SECTION 3.01.    Requisite Power and Authority.  The Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out their provisions.  All action on
Purchaser’s part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing.   Upon
their execution and delivery, this Agreement will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except
 
 
(a)           as limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights; and (b) general principles of equity that
restrict the availability of equitable and legal remedies.
 
SECTION 3.02.    Investment Representations.  Purchaser understands that the
Securities are being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon Purchaser’s representations
contained in the Agreement. The Purchaser confirms that it has received or has
had full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Securities to be
purchased by it under this Agreement. The Purchaser further confirms that it has
had an opportunity to ask questions and receive answers from the Company
regarding the Company and its Subsidiaries’ business, management and financial
affairs and the terms and conditions of the offering, and the Securities and to
obtain additional information necessary to verify any information furnished to
the Purchaser or to which the Purchaser had access.
 

 
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SECTION 3.03.    Purchaser Bears Economic Risk.  The Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company and its Subsidiaries so that it
is capable of evaluating the merits and risks of its investment in the Company
and its Subsidiaries and has the capacity to protect its own interests. The
Purchaser must bear the economic risk of this investment until the Securities
are sold pursuant to: (i) an effective registration statement under the
Securities Act; or (ii) an exemption from registration with respect to such
sale.
 
SECTION 3.04.    Acquisition for Own Account.  The Purchaser is acquiring the
Securities for the Purchaser’s own account for investment only, and not with a
view towards or for resale in connection with their distribution in violation of
the Securities Act.
 
SECTION 3.05.    Purchaser Can Protect Its Interest.  The Purchaser represents
that by reason of its, or of its management’s, business and financial
experience, the Purchaser has the capacity to evaluate the merits and risks of
its investment in the Securities and to protect its own interests in connection
with the transactions contemplated in this Agreement.  Purchaser is aware of no
publication or any advertisement in connection with the transactions
contemplated in the Agreement.  Purchaser has obtained counsel and advice from
its own legal, tax, and other advisers in connection with the transactions
contemplated by the Loan Documents and is not relying on any such counsel or
advice from the Company or any of its representatives.
 
SECTION 3.06.     Accredited Investor.  Purchaser represents that it is an
“accredited investor” within the meaning of Regulation D under the Securities
Act.
 
SECTION 3.07.     Legends.
 
(a)           The Notes shall bear substantially the following legend:
 
“THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.  ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION
STATEMENT UNDER THE ACT AND AS REQUIRED BY BLUE SKY LAWS IS IN EFFECT AS TO SUCH
TRANSFER OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  THE SECURITIES
REPRESENTED BY THIS NOTE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
SUBORDINATION AGREEMENT, DATED AS OF JULY 25, 2008, BY AND BETWEEN COMERICA BANK
AND THE HOLDER HEREOF (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME
TO TIME) (THE “SUBORDINATION AGREEMENT”).  IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS OF THE SUBORDINATION AGREEMENT AND THIS PROMISSORY NOTE, THE TERMS OF
THE SUBORDINATION AGREEMENT SHALL GOVERN AND CONTROL.”
 
(b)           The Warrants shall bear substantially the following legend:
 

 
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“THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL (IF REQUIRED
BY THE COMPANY) REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION
UNDER APPLICABLE STATE SECURITIES LAWS.”
 
ARTICLE IV

 
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
 
The obligation of each Purchaser to purchase and pay for the Securities being
purchased by it on the Closing Date is, at its option, subject to the
satisfaction, on or before the Closing Date of the following conditions:
 
SECTION 4.01.     Agreement.  This Agreement shall have been duly executed by
the Company and each other Purchaser.
 
SECTION 4.02.     Notes.  The Notes shall have each duly issued, executed and
delivered by the Company to each Purchaser.
 
SECTION 4.03.     Warrants.  The Warrants shall have each duly issued, executed
and delivered by the Company to each Purchaser.
 
SECTION 4.04.    Subordination Agreement.  That certain Subordination Agreement,
dated as of the date hereof, by and between, Comerica Bank (“Comerica”) and the
other Purchaser hereto (as amended, supplemented or otherwise modified from time
to time) (the “Subordination Agreement”) shall have been duly executed and
delivered by Comerica and the Purchasers.  A copy of the Subordination Agreement
is attached hereto as Exhibit C.
 
SECTION 4.05.   Comerica Consent.  The Purchasers will have received a consent
duly executed by an authorized signatory on behalf of Comerica, whereby Comerica
consents to the transactions contemplated by the Loan Documents and waives any
limitation or restriction set forth in that certain Loan and Security Agreement,
entered into as of March 28, 2008, by and between Comerica and the Company (as
amended, supplemented or otherwise modified from time to time) (the “Comerica
Loan Agreement”) to the Company issuing the Securities hereunder and the
Purchasers extending the loans contemplated hereby (the “Comerica Consent”).  A
copy of the Comerica Consent is attached hereto as Exhibit D.
 
SECTION 4.06.    Legal Opinion.  The Purchasers will have received an opinion of
the Company’s counsel, dated as the Closing Date, with respect to legal matters
customary for transactions of this type, in a form reasonably acceptable to the
Purchasers.
 
SECTION 4.07.    Representations and Warranties to be True and Correct.  The
representations and warranties contained in Article II will be true, complete
and correct on and as
 

 
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of the Closing with the same effect as though such representations and
warranties had been made on and as of such date (except to the extent that the
representation or warranty speaks to a specific date), and the Chief Executive
Officer or the Chief Financial Officer of the Company will have certified to
such effect to the Purchasers in writing.
 
SECTION 4.08.    Performance.  The Company will have performed and complied in
all material respects with all covenants and agreements contained herein
required to be performed or complied with by it prior to or at the Closing Date
and the Chief Executive Officer or the Chief Financial Officer of the Company
will have certified to the Purchasers in writing to such effect and to the
further effect that all of the conditions set forth in this Article IV have been
satisfied.
 
SECTION 4.09.   All Proceedings to be Satisfactory».  All corporate and other
proceedings to be taken by the Company and its Subsidiaries in connection with
the transactions contemplated hereby and all documents incident thereto will be
satisfactory in form and substance to the Purchasers and their counsel, and the
Purchasers and their counsel will have received all such counterpart originals
or certified or other copies of such documents as they reasonably may request.
 
SECTION 4.10.    Supporting Documents.  The Purchasers and their counsel will
have received copies of the following documents:
 
(i)           (A) the Certificate of Incorporation of the Company, as amended,
certified as of a recent date by the Secretary of State of the State of
Delaware, and (B) a certificate of said Secretary dated as of a recent date as
to the due incorporation and good standing of the Company, the payment of all
excise taxes by the Company and listing all documents of the Company on file
with said Secretary;
 
(ii)           a certificate of the Secretary or an Assistant Secretary of the
Company dated as of the Closing Date and certifying:  (A) that attached thereto
is a true and complete copy of the Bylaws of the Company as in effect on the
date of such certification; (B) that attached thereto is a true and complete
copy of all resolutions adopted by the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents, the issuance, sale and delivery of the Securities, and
that all such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by this
Agreement; (C) that the Certificate of Incorporation of the Company has not been
amended since the date of the last amendment referred to in the certificate
delivered pursuant to clause (i)(A) and (i)(B) above; and (D) to the incumbency
and specimen signature of each officer of the Company executing this Agreement,
any of the Securities, or any other related ancillary document thereto and any
certificate or instrument furnished pursuant hereto, and a certification by
another officer of the Company as to the incumbency and signature of the officer
signing the certificate referred to in this clause (ii); and
 
(iii)           such additional supporting documents and other information with
respect to the operations and affairs of the Company as the Purchasers or their
counsel reasonably may request.
 

 
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ARTICLE V

 
COVENANTS OF THE COMPANY
 
The Company agree that, so long as any Notes are outstanding, except to the
extent compliance in any case or cases is waived in writing by the Required
Holders:
 
SECTION 5.01.     Financial Statements, Reports, Notices, Etc.  The Company will
furnish to each Purchaser:
 
(a)           within ninety (90) days after the end of each fiscal year of the
Company a consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal year and the related consolidated statements of income
for the fiscal year then ended, prepared in accordance with GAAP and audited or
certified by a firm of independent public accountants selected by the Audit
Committee of the Board of Directors of the Company;
 
(b)           within sixty (60) days after the end of each fiscal quarter in
each fiscal year a consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of income unaudited but
prepared in accordance with generally accepted accounting principles and
certified by the Chief Financial Officer of the Company, such consolidated
balance sheet to be as of the end of such fiscal quarter and such consolidated
statements of income to be for such fiscal quarter and for the period from the
beginning of the fiscal year to the end of such fiscal quarter;
 
(c)           promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the Company sends or makes
available to its stockholders or files with the SEC;
 
(d)           promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, investigations and inquiries of the type described
in Section 2.11 of this Agreement that could materially adversely affect the
Company or any of its Subsidiaries (subject to the Purchasers receiving the
information signing an acceptable non-disclosure agreement before the Company
discloses any material non-public or competitively sensitive information (the
foregoing requirement only applicable if prior to the disclosure of such
information the Company requests the execution of such document by the
applicable Purchasers));
 
(e)           promptly give notice to the Purchasers of the occurrence of any
Event of Default under this Agreement;
 
(f)           promptly give notice to the Purchasers of any event having a
Material Adverse Effect (subject to the Purchasers receiving the information
signing an acceptable non-disclosure agreement before the Company discloses any
material non-public or competitively sensitive information (the foregoing
requirement only applicable if prior to the disclosure of such information the
Company requests the execution of such document by the applicable Purchasers));
 
(g)           promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of the
Company and its
 

 
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Subsidiaries as the Required Holders may reasonably request (subject to the
Purchasers receiving the information signing an acceptable non-disclosure
agreement before the Company discloses any material non-public or competitively
sensitive information (the foregoing requirement only applicable if prior to the
disclosure of such information the Company requests the execution of such
document by the applicable Purchasers));
 
Notwithstanding this Section 5.01, so long as the Company is required to make
filings pursuant to the Exchange Act and makes such filings in a timely manner,
the Company will be deemed to have furnished to the Purchasers the financial
statements and other reports required by this Section 5.01; provided, however,
that the foregoing shall not apply to clauses (d), (e) and (f) above.
 
SECTION 5.02.    Corporate Existence; Maintenance of Business.  The Company will
preserve and maintain its existence.  The Company will cause each of its
Subsidiaries to preserve and maintain its existence where the failure to do so
could reasonably be expected to have a Material Adverse Effect.  The Company
will, and will cause each of its Subsidiaries to, preserve and keep in force and
effect all licenses, permits, franchises, approvals, patents, trademarks, trade
names, trade styles, copyrights, and other proprietary rights necessary to the
conduct of its business where the failure to do so could reasonably be expected
to have a Material Adverse Effect.
 
SECTION 5.03.    Properties, Insurance.  The Company and its Subsidiaries will
maintain as to its properties and business, with financially sound and reputable
insurers, insurance against such casualties and contingencies and of such types
and in such amounts as is customary for companies similarly situated.
 
SECTION 5.04.     Use of Proceeds.  The Company will use the proceeds from the
sale of the Securities as set forth on Schedule 5.04 attached hereto.  
 
SECTION 5.05.    Compliance with Laws.  The Company and its Subsidiaries will
comply with all applicable laws, rules, regulations and orders, noncompliance
with which could materially adversely affect its business or condition,
financial or otherwise.
 
SECTION 5.06.    Keeping of Records and Books of Account.  The Company and its
Subsidiaries will keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions of the Company and
its Subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business will be made.
 
SECTION 5.07.    Dividends and Certain Other Restricted Payments.  The Company
will not, nor will it permit any of its Subsidiaries to directly or indirectly
declare or pay any dividends, other than (i) dividends paid to the Company or
any of its wholly-owned Subsidiaries or (ii) dividends paid in connection with
preferred stock currently issued and outstanding by the Company.
 
SECTION 5.08.    Capital Expenditures.  The Company will not, nor will it permit
any of its Subsidiaries to, incur any Capital Expenditures other than in the
ordinary course consistent
 

 
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with past practice or otherwise not in an amount to exceed $250,000 in any
twelve-month period.  For purposes of this Agreement, “Capital Expenditures”
means, with respect to any person or entity for any period, the aggregate amount
of all expenditures (whether paid in cash or accrued as a liability) by such
person or entity during that period for the acquisition or leasing (pursuant to
a capital lease) of fixed or capital assets or additions to property, plant, or
equipment (including replacements, capitalized repairs, and improvements) which
should be capitalized on the balance sheet of such person or entity in
accordance with GAAP.
 
SECTION 5.09.    Mergers, Consolidations and Asset Sales.  The Company will not,
nor will it permit any of its Subsidiaries to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any
substantial part of its capital stock or assets.  Provided that no Event of
Default has occurred, nothing contained in this Section 5.09 shall be deemed to
prohibit the Company and its Subsidiaries from (i) the sale of inventory in the
ordinary course of business or excess or obsolete inventory in an aggregate
maximum amount not to exceed $250,000 in any fiscal year, (ii) licenses and
similar arrangements for the use of the property of Company or its Subsidiaries
in the ordinary course of business; (iii) sales or other dispositions of
worn-out or obsolete equipment; (iv) sales or other dispositions of other assets
of Company or its Subsidiaries that do not in the aggregate exceed $250,000
during any fiscal year; or (v) engaging in the transactions described on
Schedule 5.09.
 
SECTION 5.10.    Acquisitions.  The Company will not, nor will it permit any of
its Subsidiaries to, directly or indirectly, acquire all or any substantial part
of the assets or business of any other entity or division thereof.
 
SECTION 5.11.    Prepayment of Indebtedness.  The Company will not, nor will it
permit any of its Subsidiaries, to prepay any indebtedness for borrowed money;
provided, however, that this Section 5.11 will not prohibit the Company from
prepaying the Notes pursuant to the terms of this Agreement or paying the
amounts owed to Comerica pursuant to the Comerica Loan Agreement.
 
SECTION 5.12.    Incurrence of Indebtedness.  The Company will not create,
incur, assume, guarantee, suffer to exist or be or remain liable with respect to
any Indebtedness, or permit any Subsidiary so to do, whether secured or
unsecured, or assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligations of any other person or
entity other than (i) Indebtedness of the Company in favor of the Purchasers
arising under this Agreement or any other Loan Document; (ii) Indebtedness of
the Company in favor of Comerica arising under the Comerica Loan Agreement,
(iii) Indebtedness set forth on the Company’s consolidated unaudited balance
sheets as of March 31, 2008 as disclosed by the Company on Form 10-Q filed with
the SEC on May 15, 2008, (iv) Indebtedness as  disclosed on Schedule 5.12, (v)
unsecured trade debt in the ordinary course of business; (vi) Indebtedness
incurred to finance the purchase of equipment and/or inventory in the ordinary
course of business not to exceed $250,000 in the aggregate in any fiscal year of
the Company; (vii) any unsecured debt that is subordinated in writing to the
debt owing by the Company to the Purchasers on terms reasonably acceptable to
the Purchasers (and identified as being such by the Company and the Purchasers);
and (viii) refinancing and renewals of any the items set forth above, provided
that the principal amount is not increased or the terms modified to impose more
burdensome terms upon the Company or its Subsidiary, as the case may be.  For
purposes of this Section 5.12 and
 

 
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as otherwise used in this Agreement “Indebtedness” means (a) all indebtedness
for borrowed money or the deferred purchase price of property or services,
including without limitation reimbursement and other obligations with respect to
surety bonds and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease obligations that
are property classified as a liability on a balance sheet in conformity with
generally accepted accounting principles, (d) all obligations, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire any capital stock of
the Company, (e) all Contingent Obligations, (f) all obligations arising under
any interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect an entity or person against fluctuation in interest rates,
currency exchange rates or commodity prices, and (g) all obligations arising
under the Credit Card Services Sublimit and Foreign Exchange Sublimit.  For
purposes of the immediately preceding sentence, “Contingent Obligations” means,
as applied to any entity or person, any direct or indirect liability, contingent
or otherwise, of that entity or person with respect to (a) any indebtedness,
lease, dividend, letter of credit or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that entity or person,
or in respect of which that entity or person is otherwise directly or indirectly
liable; (b) any obligations with respect to undrawn letters of credit, corporate
credit cards or merchant services issued for the account of that entity or
person; and (c) all obligations arising under any interest rate, currency or
commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect an entity or
person against fluctuation in interest rates, currency exchange rates or
commodity prices; provided, however, that the term “Contingent Obligation” shall
not include endorsements for collection or deposit in the ordinary course of
business.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such entity or person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.  For purposes of this Section 5.12,
the terms Credit Card Services Sublimit and Foreign Exchange Sublimit shall have
the meaning as set forth in the Comerica Loan Agreement as in effect on the date
hereof.
 
SECTION 5.13.    Change in the Nature of Business.  The Company will not, nor
will it permit any of its Subsidiaries to, engage in any business or activity
other than the general nature of the business engaged in by it as of the Closing
Date or discontinue its engagement in any business or activity engaged in by it
as of the Closing Date except within the reasonable business judgment of the
Board of Directors of the Company.  
 
SECTION 5.14.    Encumbrances.  The Company will not create, incur, assume or
allow any mortgage, lien, deed of trust, charge, pledge, security interest, or
other encumbrance (the foregoing collectively referred to herein as “Liens”)
with respect to its property, including its Intellectual Property, or assign or
otherwise convey any right to receive income, including the sale of any
accounts, or permit any of its Subsidiaries so to do, except for (i) any Liens
existing on the Closing Date and disclosed on Schedule 5.14; (ii) Liens for
taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings and for
which the Company maintains adequate reserves; (iii) Liens not
 

 
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to exceed $250,000 in the aggregate (A) upon or in any equipment acquired or
held by Company or any of its Subsidiaries to secure the purchase price of such
equipment or indebtedness incurred solely for the purpose of financing the
acquisition or lease of such equipment, or (B) existing on such equipment at the
time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, and the proceeds of such
Equipment; (iv) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in the
first three clauses immediately above, provided that any extension, renewal or
replacement shall be limited to the property encumbered by the existing Lien
(including the effect of any after-acquired property clause) and the principal
amount of the indebtedness being extended, renewed or refinanced does not
increase; (v) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under this Agreement; (vi)
non-exclusive licenses to the Company’s Intellectual Property granted in the
ordinary course of business, and (vii) Liens in favor of financial institutions
arising in connection with Company’s deposit accounts held at such institutions
to secure standard fees for deposit services charged by such financial
institutions.
 
SECTION 5.15.    Access to Facilities.  As long as any principal, interest and
fees with respect to the Notes remain outstanding, each of the Company and each
of its Subsidiaries will permit any representatives designated by the Purchasers
(or any successor of the Purchasers), upon reasonable advance notice and during
normal business hours reasonably convenient to the Company, its Subsidiaries
and/or representatives of the Company and/or any of its Subsidiaries that are
responsible for the maintenance of such records at such person’s expense and
accompanied by a representative of the Company and/or the applicable Subsidiary,
to (a) visit and inspect any of the properties of the Company or any of its
Subsidiaries, (b) examine the corporate and financial records of the Company or
any of its Subsidiaries (unless such examination is not permitted by federal,
state or local law or by contract) and make copies thereof or extracts
therefrom, and (c) discuss the affairs, finances and accounts of the Company or
any of its Subsidiaries with the directors, officers and independent accountants
of the Company or any of its Subsidiaries.  Notwithstanding the foregoing,
neither the Company nor any of its Subsidiaries will provide any competitively
sensitive or material, non-public information to the Purchasers unless the
Purchasers sign a confidentiality agreement and otherwise complies with
Regulation FD, under the federal securities laws.
 
SECTION 5.16.    Intellectual Property Rights.  The Company shall register or
cause to be registered (to the extent not already registered) with the United
States Patent and Trademark Office or the United States Copyright Office, as the
case may be, those registrable intellectual property rights now owned or
hereafter developed or acquired by Company, to the extent that the Company, in
its sole reasonable business judgment, deems it appropriate to so protect such
intellectual property.  Company shall (i) protect, defend and maintain the
validity and enforceability of its Intellectual Property, to the extent it deems
it appropriate in its reasonable business judgment, (ii) use commercially
reasonable efforts to detect infringements in its Intellectual Property to the
extent it deems it appropriate in its reasonable business judgment, and (iii)
not allow any material trademarks, patents or copyrights to be abandoned,
forfeited or dedicated to the public.
 
SECTION 5.17.    Taxes.  The Company and its Subsidiaries will promptly pay and
discharge, or cause to be paid and discharged, when due and payable, all lawful
taxes,
 

 
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assessments and governmental charges or levies imposed upon the income, profits,
property or business of the Company and its Subsidiaries; provided, however,
that any such tax, assessment, charge or levy need not be paid if the validity
thereof shall currently be contested in good faith by appropriate proceedings
and if the Company and/or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto, and provided, further, that the Company
and its Subsidiaries will pay all such taxes, assessments, charges or levies
forthwith upon the commencement of proceedings to foreclose any lien which may
have attached as security therefor.
 
ARTICLE VI

 
EVENT OF DEFAULT
 
If any of the following events (each an “Event of Default”) shall occur and be
continuing:
 
(a)           The Company will fail to pay any installment of principal due on
any Note on the date such installment is due;
 
(b)           The Company will fail to pay any interest due on any Note within
five (5) calendar days of the date such payment is due;
 
(c)           Any representation or warranty made by the Company in this
Agreement, or by the Company (or any officers of the Company) in any
certificate, instrument or written statement contemplated by or made or
delivered pursuant to or in connection with this Agreement will prove to have
been incorrect when made in any material respect;
 
(d)           the Company fails to perform or observe any other term, covenant
or agreement contained in this Agreement, the Notes, the Warrants or any other
document, instrument or agreement entered into in connection with this Agreement
(the foregoing documents each as amended, supplemented or otherwise modified
from time to time collectively  referred to herein as the “Loan Documents”) to
which it is a party and any such failure remains unremedied for
ten (10) calendar days after written notice thereof will have been given to the
Company by the holders of more than 50% of the sum of the aggregate unpaid
principal amount of the Notes (referred to herein as the “Required Holders”);
 
(e)           The Company will fail to pay any Indebtedness in excess of an
aggregate of $250,000 for borrowed money (other than as evidenced by the Notes)
owing by the Company or any interest or premium thereon, when due (or, if
permitted by the terms of the relevant document, within any applicable grace
period), whether such Indebtedness will become due by scheduled maturity, by
required prepayment, by acceleration, by demand or otherwise, or will fail to
perform (with such failure not being waived) any term, covenant or agreement on
its part to be performed under any agreement or instrument evidencing or
securing or relating to any Indebtedness in excess of an aggregate of $250,000
owing by the Company when required to be performed (or, if permitted by the
terms of the relevant document, within any applicable grace period), if the
effect of such failure to pay or perform is to accelerate, or to permit the
holder or holders of such Indebtedness, or the trustee or trustees under any
such agreement or instrument to accelerate, the maturity of such Indebtedness;
 

 
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(f)           The Company will be involved in financial difficulties as
evidenced (i) by its admitting in writing its inability to pay its debts
generally as they become due; (ii) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in effect, or by its
authorizing, by appropriate proceedings of its Board of Directors or other
governing body, the commencement of such a voluntary case which is not dismissed
within fifteen (15) days; (iii) by its filing an answer or other pleading
admitting or failing to deny the material allegations of a petition filed
against it commencing an involuntary case under said Title 11, or seeking,
consenting to or acquiescing in the relief therein provided, or by its failing
to controvert timely the material allegations of any such petition; (iv) by the
entry of an order for relief in any involuntary case commenced under said Title
11; (v) by its seeking relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or reorganization
of debtors or to the modification or alteration of the rights of creditors, or
by its consenting to or acquiescing in such relief; (vi) by the entry of an
order by a court of competent jurisdiction (a) finding it to be bankrupt or
insolvent, (b) ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors, or (c) assuming
custody of, or appointing a receiver or other custodian for, all or a
substantial part of its property; or (vii) by its making an assignment for the
benefit of, or entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all or a
substantial part of its property;
 
(g)           Any judgment, writ, warrant of attachment or execution or similar
process will be issued or levied against the Company or any of their respective
property or other assets for more than $250,000.00 in the aggregate for all such
judgments, writs, or similar process and such judgment, writ, or similar process
will not be released, vacated or fully bonded within forty five (45) days after
its issue or levy; or
 
(h)           If there occurs a material adverse change in Company’s business or
financial condition taken as a whole;
 
then, and in any such event, the Required Holders may, by notice to the Company,
declare the entire unpaid principal amount of the Notes, all interest accrued
and unpaid thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such accrued interest and all such amounts will become and be forthwith due and
payable (unless there will have occurred an Event of Default under clause (f) of
this Article VI in which case all such amounts will automatically become due and
payable), without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Company.
 
ARTICLE VII
 
MISCELLANEOUS
 
SECTION 7.01.    Expenses.  Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby.  Notwithstanding the
foregoing, the Company shall promptly pay upon demand the reasonable fees and
disbursements of Purchasers’ counsel incurred in connection with any amendments,
modifications, supplements or waivers in connection with this Agreement or any
other Loan Document.
 

 
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SECTION 7.02.    Survival of Agreements.  All covenants, agreements,
representations and warranties made in this Agreement and the other Loan
Documents or any certificate or instrument delivered to the Purchasers pursuant
to or in connection with this Agreement or the other Loan Documents will survive
the execution and delivery of this Agreement, the other Loan Documents, and the
issuance, sale and delivery of the Securities.
 
SECTION 7.03.    Indemnification.  The Company agrees to indemnify, hold
harmless, reimburse and defend the Purchasers, each of the Purchasers’ officers,
directors, managers, agents, attorneys, affiliates, employees, control persons,
controlling entities and principal shareholders (collectively the “Purchaser
Indemnitees”), against any claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon any Purchaser Indemnitee which results, arises out of or is based upon: (i)
any misrepresentation by the Company or breach of any warranty by the Company in
this Agreement or any other Loan Document or in any exhibits or schedules
attached hereto or thereto, in each case, in any material respect; or (ii) any
breach or default in performance by the Company or any of its Subsidiaries of
any covenant or undertaking to be performed by Company or any of its
Subsidiaries under this Agreement or any other Loan Document.
 
SECTION 7.04.    Parties in Interest.  All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not.  Without limiting the
generality of the foregoing, all representations, covenants and agreements
benefiting the Purchasers will inure to the benefit of any and all subsequent
holders from time to time of the Securities.
 
SECTION 7.05.    Notices.  All notices, requests, consents and other
communications hereunder will be in writing and will be delivered in person,
mailed by certified or registered mail, return receipt requested, or sent by
facsimile or recognized overnight courier service, addressed as follows:
 
if to the Company:

Proxim Wireless Corporation
1561 Buckeye Drive
Milpitas, CA 95035
Attn: Pankaj Manglik
Facsimile: (408) 383-7680

with a copy to:

David L. Renauld
Proxim Wireless Corporation
881 North King Street, Suite 100
Northampton, MA 01060
Facsimile: (413) 584-1425

 
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If to any Purchaser:

Lloyd I. Miller, III
4550 Gordon Drive
Naples, Florida, 34102
Facsimile:  (239) 262-8025

with a copy to:

Paul N. Silverstein, Esq.
Kenneth L. Rothenberg, Esq.
Andrews Kurth LLP
450 Lexington Avenue
New York, NY 10017
fax:  (212) 850-2929

SECTION 7.06.   Governing Law.  THIS AGREEMENT AND EACH LOAN DOCUMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  ANY ACTION BROUGHT BY EITHER
PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND EACH LOAN DOCUMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF
NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK.  BOTH
PARTIES AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND WAIVE TRIAL BY
JURY.
 
SECTION 7.07.    Entire Agreement.  This Agreement, including the schedules and
exhibits hereto and the other Loan Documents, constitutes the sole and entire
agreement of the parties with respect to the subject matter hereof.  All
schedules and exhibits hereto are hereby incorporated herein by
reference.  There are no other agreements of the parties and no party is relying
on any representations of the other not expressly set forth herein or any
ancillary document related hereto or thereto.  
 
SECTION 7.08.    Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
 
SECTION 7.09.   Due Diligence. The parties hereto acknowledge and agree that the
Purchasers’ due diligence review of any information related to the transactions
contemplated hereby and any information received by the Purchasers in connection
therewith or otherwise in connection with the transactions contemplated herein
shall not in any manner limit the Purchasers’ right to rely on the
representations, warranties, indemnification obligations and other covenants of
the Company set forth herein and in the other Loan Documents.
 
SECTION 7.10.    Successors and Assigns.  Purchasers may sell and assign all or
any portion of its interest in the Notes provided that the Purchasers provide
notice to the Company and such sale complies with applicable law, and all of the
other terms and conditions of this Agreement and the other Loan
Documents.  Purchasers may grant a participation in all or any
 

 
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portion of its interest in the Notes without giving notice to the Company
provided that such participation grant complies with applicable law.  The
Company may not delegate its obligations under this Agreement or the other Loan
Documents without the prior written consent of each Purchaser.
 
SECTION 7.11.    Amendments and Waivers; Exercise of Rights.  No amendment of
any provision of this Agreement shall be effective unless it is in writing and
signed by the Company and the Required Holders.  No waiver of any provision of
this Agreement, nor consent to any departure by either party from it, shall be
effective unless it is in writing and signed by the affected party or, in the
case of the Purchasers, by the Required Holders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.  No failure on the part of a party to exercise, and no delay in
exercising, any right or remedy under the Loan Documents shall operate as a
waiver by such party, nor shall any single or partial exercise of any right or
remedy under the Loan Documents preclude any other or further exercise thereof
or the exercise of any other right or remedy.  The rights and remedies of each
party provided herein (a) are cumulative and are in addition to, and are not
exclusive of, any rights or remedies provided by law and (b) are not conditional
or contingent on any attempt by such party to exercise any of its rights or
remedies under any other related document or against the other party or any
other entity.
 
SECTION 7.12.    Severability.  If any provision of this Agreement will be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement will not be affected
thereby.
 
SECTION 7.13.    Titles and Subtitles.  The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
 
SECTION 7.14.    Jointly Drafted. This Agreement and the other Loan Documents
shall be deemed to have been jointly drafted by the parties hereto and thereto
and no provision of it shall be interpreted or construed for or against another
party because such party actually or purportedly prepared or requested such
provision, any other provision or the Agreement or Loan Documents as a whole.
 
SECTION 7.15.    Further Assurances.  Company agrees and agrees to cause its
Subsidiaries to (i) execute and deliver, or cause to be executed and delivered,
all such other and further agreements, documents and instruments and (ii) take
or cause to be taken all such other and further actions as the Required Holders
may reasonably request to effectuate the intent and purposes, and carry out the
terms, of this Agreement.  
 
[Signature page follows]
 

 
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IN WITNESS WHEREOF, the Company and the Purchasers have executed this Securities
Purchase Agreement as of the day and year first above written.
 

 
PROXIM WIRELESS CORPORATION, as
Company
     
By: /s/ David L. Renauld
 
Name:  David L. Renauld
 
Title: Vice President

 
PURCHASERS:
 
LLOYD I. MILLER, III
 
By: /s/ Lloyd I. Miller, III
Name: Lloyd I. Miller, III

MILFAM II L.P.

By:  Milfam LLC
Its:  General Partner

By: /s/ Lloyd I. Miller, III
Name:  Lloyd I. Miller, III
Title:  Manager