Waiver and Amendment Agreement between SDS Merchant Fund, L.P. and Vertel Corporation (July 2, 2002)

Summary

This agreement is between SDS Merchant Fund, L.P. and Vertel Corporation. SDS agrees to waive certain rights and remedies related to Vertel's transfer of its stock listing from the Nasdaq National Market to the Nasdaq SmallCap Market, which otherwise would have triggered defaults under previous agreements. SDS also agrees to amend the definition of "Nasdaq" in a related warrant and waives its right to a prepayment premium on a $1,500,000 repayment under a new purchase agreement. The Lock-Up Agreement remains unaffected by this waiver.

EX-4.8 10 dex48.txt NOTE & WARRANT PURCHASE AGREEMENT DATED 8/31/2001 EXHIBIT 4.8 SDS MERCHANT FUND, L.P. c/o SDS Capital Partners, LLC 53 Forest Avenue, Second Floor Old Greenwich, Connecticut 06870 ###-###-#### July 2, 2002 Vertel Corporation 21300 Victory Boulevard Suite 700 Woodland Hills, California 91367 Attention: President and Chief Executive Officer Re: Note and Warrant Purchase Agreement dated as of August 31, 2001 --------------------------------------------------------------- Gentlemen: Reference is hereby made to the (i) Note and Warrant Purchase Agreement (the "2001 Purchase Agreement") dated as of August 31, 2001 between Vertel Corporation (the "Company") and SDS Merchant Fund, L.P. ("SDS"); (ii) the Convertible Promissory Note dated January 3, 2002 issued to SDS (the "Note"); (iii) the Warrant dated August 31, 2001 issued to SDS (the "Warrant"); and (iv) the Lock-Up Agreement between the Company and certain shareholders of the Company dated as of August 31, 2001 (the "Lock-Up Agreement"). Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in the 2001 Purchase Agreement. You have advised us that the Company has transferred the listing of its Common Stock from The Nasdaq National Market to The Nasdaq SmallCap Market (the "Transfer Event"). The Transfer Event constitutes a breach of certain covenants under the 2001 Purchase Agreement and constitutes an event of default and triggering event under the Note. You have requested us to waive our rights under the 2001 Purchase Agreement and Note in connection with the Transfer Event. Accordingly, SDS hereby waives its rights and remedies under Section 3.2 and Section 3.15 of the Purchase Agreement and Section 2.1 and Section 3.7(g)(iii) of the Note. Notwithstanding the foregoing, this Waiver shall in no way affect the terms and provisions of the Lock-Up Agreement. Section 9 of the Warrant defines the term "Nasdaq" to mean The Nasdaq National Market. In connection with the Transfer Event, SDS hereby agrees that the definition of "Nasdaq" in the Warrant shall mean The Nasdaq National Market or The Nasdaq SmallCap Market. Pursuant to Section 2.1(aa) of that certain Note and Warrant Purchase Agreement to be entered into by and between the Company and SDS (the "2002 Purchase Agreement"), the Company is obligated to use $1,500,000 of the proceeds from the sale of a convertible promissory note and accompanying warrant to SDS to repay outstanding indebtedness owed to SDS under the Note. Section 3.7(m) of the Note entitles SDS to a prepayment premium of 115% in the event the Company prepays all or any portion of the Note and to ninety (90) days written notice of prepayment. SDS hereby waives its rights under 3.7(m) of the Note in connection with the Company's prepayment of $1,500,000 of the principal amount of the Note pursuant to the 2002 Purchase Agreement, and the Company shall not be obligated to pay any prepayment premium on such $1,500,000 prepayment. Sincerely, SDS MERCHANT FUND, L.P. By: _____________________________ Name: Steve Derby Title: Managing Member -2-