EXHIBIT 10.39
APPENDIX C
AMENDED AND RESTATED
LOAN AGREEMENT
THIS LOAN AGREEMENT DATED AS OF THE 17TH DAY OF MAY, 2001, AS AMENDED
AS OF AUGUST 7, 2001, EFFECTIVE AS OF MAY 17, 2001, BY AND BETWEEN LANCER
OFFSHORE, INC., A BRITISH VIRGIN ISLANDS CORPORATION AND EACH PARTY HERETO
MAKING A LOAN PURSUANT TO THIS AGREEMENT AS OF THE DATE HEREOF AND FROM TIME TO
TIME THEREAFTER (INDIVIDUALLY "EACH LENDER" AND COLLECTIVELY THE "LENDER") AND
WORLD WIRELESS COMMUNICATIONS, INC., A NEVADA CORPORATION, HAVING AN ADDRESS AT
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (THE
"BORROWER").
WHEREAS, THE LENDER IS WILLING TO LEND TO BORROWER FUNDS TO ENABLE
BORROWER TO CONDUCT ITS BUSINESS OPERATIONS; AND
WHEREAS, BORROWER WISHES TO BORROW FUNDS FROM LENDER IN ORDER TO
CONDUCT SUCH OPERATIONS;
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE I
OBLIGATIONS
1.1 (A) SIMULTANEOUSLY WITH THE EXECUTION AND THE DELIVERY OF THIS
AGREEMENT, LANCER OFFSHORE, INC. AGREES TO LEND TO BORROWER THE AGGREGATE SUM OF
$2,250,000, OF WHICH (I) THE SUM OF $1,125,000 SHALL BE PAID TO BORROWER UPON
THE EXECUTION AND THE DELIVERY OF THIS AGREEMENT AND (II) THE SUM OF $1,125,000
SHALL BE PAID TO BORROWER ON JULY 15, 2001, PROVIDED THAT BORROWER HAS RAISED
THE SUM OF $2,000,000 IN EQUITY FROM PERSONS OTHER THAN ▇▇▇▇▇▇▇ ▇▇▇▇▇ AND
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HIS AFFILIATES, INCLUDING, WITHOUT LIMITATION, LANCER OFFSHORE INC., LANCER
PARTNERS, L.P., AND THE ORBITER FUND LTD.(SUCH LOAN, TOGETHER WITH ANY OTHER
AMOUNTS LOANED PURSUANT TO THIS AGREEMENT BY ANY LENDER FROM TIME TO TIME,
INCLUDING THAT SPECIFIED IN SECTION 1.1 (B) HEREOF, WITH THE CONSENT OF THE
PARTIES HERETO, UP TO A TOTAL SUM OF $5,000,000, SHALL BE REFERRED TO
COLLECTIVELY AS THE "LOAN"). THE LOAN SHALL BE USED SOLELY BY BORROWER IN THE
OPERATION OF ITS BUSINESS AS DETERMINED BY THE PRESIDENT OF BORROWER, SUBJECT TO
SUPERVISION THEREOF BY BOARD OF DIRECTORS OF BORROWER. THE LOAN SHALL BE REPAID
ON SEPTEMBER 15, 2001 UNLESS IT IS MANDATORILY CONVERTED INTO SHARES OF
BORROWER'S COMMON STOCK BEFORE THAT DATE AS PROVIDED IN SECTION 1.5 HEREOF.
(B) ON AUGUST 7, 2001 LANCER PARTNERS L.P. AGREES TO LEND TO
BORROWER THE AGGREGATE SUM OF $875,000, OF WHICH (I) THE SUM OF $350,000 SHALL
BE PAID TO BORROWER ON AUGUST 7, 2001 AND (II) THE SUMS OF $275,000 SHALL BE
PAID TO BORROWER ON OR ABOUT SEPTEMBER 15, 2001, (BUT NO LATER THAN SEPTEMBER
20, 2001), AND $250,000 ON OR ABOUT OCTOBER 15, 2001 (BUT NO LATER THAN OCTOBER
20, 2001), PROVIDED THAT BORROWER HAS RAISED THE SUM OF $1,500,000 IN EQUITY
FROM PERSONS OTHER THAN ▇▇▇▇▇▇▇ ▇▇▇▇▇ AND HIS AFFILIATES, INCLUDING, WITHOUT
LIMITATION, LANCER OFFSHORE INC., LANCER PARTNERS, L.P., AND THE ORBITER FUND
LTD, ON OR BEFORE SEPTEMBER 15, 2001 THE LOAN SHALL BE USED SOLELY BY BORROWER
IN THE OPERATION OF ITS BUSINESS AS DETERMINED BY THE PRESIDENT OF BORROWER,
SUBJECT TO SUPERVISION THEREOF BY BOARD OF DIRECTORS OF BORROWER. THE INITIAL
$350,000 PRINCIPAL AMOUNT OF THE LOAN SHALL BE REPAID ON SEPTEMBER 15, 2001, AND
THE SUBSEQUENT TRANCHES OF $275,000 AND $250,000 OF THE LOAN SHALL BE REPAID ON
DECEMBER 15, 2001, UNLESS SUCH AMOUNTS ARE
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MANDATORILY CONVERTED INTO SHARES OF BORROWER'S COMMON STOCK BEFORE THAT DATE AS
PROVIDED IN SECTION 1.5 HEREOF.
1.2 THE LOAN SHALL BEAR SIMPLE INTEREST AT THE RATE OF 15% PER ANNUM
PAYABLE ON THE MATURITY DATE OF THE LOAN ( UNLESS THE LOAN IS MANDATORILY
CONVERTED INTO SHARES OF BORROWER'S COMMON STOCK, IN WHICH EVENT SUCH INTEREST
SHALL THEN BE DUE AND PAYABLE), AND SHALL INCLUDE ANY ADDITIONAL EXPENSES
PAYABLE HEREUNDER OR UNDER, THE NOTE (AS DEFINED IN SECTION 1.3 HEREOF).
1.3 SIMULTANEOUSLY WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
BORROWER SHALL DELIVER TO LENDER AN EXECUTED ORIGINAL OF THE NOTE IN THE FORM OF
EXHIBIT A ATTACHED HERETO FOR THE AMOUNT LOANED TO BORROWER BY ANY LENDER TO
DATE, AND BORROWER SHALL DELIVER SUCH ADDITIONAL NOTES TO EVIDENCE ANY FUTURE
BORROWING FROM ANY LENDER FROM TIME TO TIME (INDIVIDUALLY A "NOTE" AND
COLLECTIVELY THE "NOTES").
1.4 SIMULTANEOUSLY WITH THE EXECUTION AND THE DELIVERY OF THIS
AGREEMENT, BORROWER SHALL DELIVER TO LENDER AN EXECUTED ORIGINAL OF THE WARRANTS
IN THE FORM OF EXHIBIT B ATTACHED IN CONSIDERATION FOR THE AMOUNT LOANED TO
BORROWER BY LENDER, AND BORROWER SHALL DELIVER SUCH ADDITIONAL REQUIRED WARRANTS
IN CONNECTION WITH ANY FUTURE BORROWING HEREUNDER (INDIVIDUALLY A "WARRANT" AND
COLLECTIVELY THE "WARRANTS").
1.5 (A) THE LOAN SHALL BE MANDATORILY CONVERTED INTO SHARES OF THE
COMMON STOCK OF BORROWER AT THE RATE OF ONE SHARE PER EACH $0.20 PRINCIPAL
AMOUNT OF DEBT, INCLUDING INTEREST (SUBJECT TO ADJUSTMENT FOR STOCK DIVIDENDS,
STOCK SPLITS AND REVERSE STOCK SPLITS, IF ANY) IMMEDIATELY UPON (I) THE APPROVAL
OF SUCH CONVERSION BY BORROWER'S SHAREHOLDERS AT A MEETING OF SHAREHOLDERS HELD
FOR SUCH PURPOSE (AMONG OTHER PURPOSES) AND (II) BORROWER'S RECEIPT OF
$2,000,000 IN EQUITY FROM PERSONS OTHER THAN ▇▇▇▇▇▇▇ ▇▇▇▇▇ AND HIS AFFILIATES,
LANCER OFFSHORE, INC., LANCER PARTNER L.P. OR THE ORBITER FUND LTD. ON OR BEFORE
DECEMBER 31, 2001.
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(B) THE SHARES OF BORROWER'S COMMON STOCK ISSUABLE UPON THE
EXERCISE OF THE WARRANTS SHALL BE NOT ISSUED PRIOR TO THE APPROVAL OF SUCH
ISSUANCE BY BORROWER'S SHAREHOLDERS AT A MEETING OF SHAREHOLDERS HELD FOR SUCH
PURPOSE (AMONG OTHER PURPOSES).
1.6 SIMULTANEOUSLY WITH THE EXECUTION AND THE DELIVERY OF THIS
AGREEMENT, LENDER AND BORROWER WILL EXECUTE AND DELIVER THE AMENDED AND RESTATED
PLEDGE/SECURITY AGREEMENT ATTACHED HERETO AS EXHIBIT C (THE "PLEDGE/SECURITY
AGREEMENT").
1.7 SIMULTANEOUSLY WITH THE EXECUTION AND THE DELIVERY OF THIS
AGREEMENT, LENDER AND BORROWER WILL EXECUTE AND DELIVER THE REGISTRATION RIGHTS
AGREEMENT ATTACHED HERETO AS EXHIBIT D (THE "REGISTRATION RIGHTS AGREEMENT").
1.8 SIMULTANEOUSLY WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
A LENDER OTHER THAN LANCER OFFSHORE, INC., EACH LENDER WILL EXECUTE AND DELIVER
THE PLEDGEE REPRESENTATIVE AGREEMENT ATTACHED TO THE LOAN AGREEMENT AS EXHIBIT
E.
1.9 ANY PERSON MAKING A LOAN TO BORROWER PURSUANT TO THIS AGREEMENT
AFTER MAY 17, 2001 SHALL BECOME A PARTY TO THE AGREEMENT BY EXECUTING AND
DELIVERING THE SIGNATURE PAGE HERETO, AND, SIMULTANEOUSLY THEREWITH, EXECUTING
AND DELIVERING A COPY OF THE AMENDED AND RESTATED PLEDGE/SECURITY AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT AND THE PLEDGEE REPRESENTATIVE AGREEMENT.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EACH LENDER
EACH LENDER REPRESENTS AND WARRANTS TO BORROWER THAT:
2.1 POWER AND AUTHORITY. EACH LENDER IS A CORPORATION, LIMITED
LIABILITY COMPANY OR PARTNERSHIP DULY ORGANIZED, VALIDLY EXISTING ENTITY IN GOOD
STANDING UNDER THE LAWS OF ITS STATE OF FORMATION; HAS ALL REQUISITE POWER AND
AUTHORITY TO CARRY ON THE BUSINESS IN WHICH IT
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IS ENGAGED; OWNS ITS ASSETS; AND HAS THE POWER AND AUTHORITY TO EXECUTE AND
DELIVER THIS AGREEMENT AND TO PERFORM ALL OF ITS RESPECTIVE OBLIGATIONS
HEREUNDER.
2.2 AUTHORIZATION. THIS AGREEMENT HAS BEEN DULY AND VALIDLY AUTHORIZED,
EXECUTED AND DELIVERED BY EACH LENDER; AND THIS AGREEMENT CONSTITUTES THE VALID
AND BINDING OBLIGATION OF EACH LENDER AND IS ENFORCEABLE AGAINST IT IN
ACCORDANCE WITH ITS TERMS EXCEPT AS THE ENFORCEABILITY THEREOF MAY BE LIMITED BY
BANKRUPTCY, INSOLVENCY, REORGANIZATION, FRAUDULENT CONVEYANCE, MORATORIUM AND
OTHER SIMILAR LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND BY GENERAL
PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER ENFORCEMENT IS CONSIDERED IN A
PROCEEDING IN EQUITY OR AT LAW).
2.3 NO VIOLATIONS. NEITHER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, NOR THE PERFORMANCE OF ANY OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER
WILL VIOLATE (OR, WITH THE PASSAGE OF TIME, WILL VIOLATE) ANY MATERIAL TERM,
COVENANT, CONDITION, OR PROVISION OF ANY CONTRACT (WRITTEN OR UNWRITTEN) OR ANY
DOCUMENT, CERTIFICATE OF INCORPORATION, BY-LAW, JUDGMENT, DECREE, ORDER, OR
REGULATION OF ANY COURT OR GOVERNMENTAL OR REGULATORY AUTHORITY BY WHICH ANY
LENDER IS BOUND OR SUBJECT.
2.4 BROKERS AND FINDERS. NEITHER ANY LENDER NOR ANY OF ITS OFFICERS,
DIRECTORS OR EMPLOYEES HAS EMPLOYED ANY BROKER OR FINDER OR INCURRED ANY
LIABILITY FOR ANY BROKERAGE FEES, COMMISSIONS OR FINDERS' FEES IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BORROWER
3.1 CORPORATE ORGANIZATION; POWER AND AUTHORITY. BORROWER IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE STATE OF
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NEVADA AND HAS FULL CORPORATE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS IT
IS NOW BEING CONDUCTED AND TO OWN THE PROPERTIES AND ASSETS IT NOW OWNS; IS DULY
QUALIFIED OR LICENSED TO DO BUSINESS AS A FOREIGN CORPORATION IN GOOD STANDING
IN EACH JURISDICTION IN WHICH BORROWER'S FAILURE TO QUALIFY TO DO BUSINESS WILL
HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS, PROSPECTS, OPERATIONS,
PROPERTIES, ASSETS OR CONDITION (FINANCIAL OR OTHERWISE) OF BORROWER. THE COPIES
OF THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF BORROWER HERETOFORE DELIVERED
TO LENDER ARE COMPLETE AND CORRECT COPIES OF SUCH INSTRUMENTS AS PRESENTLY IN
EFFECT.
3.2 AUTHORIZATION BORROWER HAS FULL CORPORATE POWER AND AUTHORITY TO
ENTER INTO THIS AGREEMENT AND TO CARRY OUT THE TRANSACTIONS CONTEMPLATED HEREBY.
THE BOARD OF DIRECTORS OF BORROWER HAS TAKEN ALL ACTION REQUIRED BY LAW,
BORROWER'S CERTIFICATE OF INCORPORATION, ITS BY-LAWS OR OTHERWISE TO BE TAKEN
BY THEM TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT
LIMITATION, THE ISSUANCE OF THE NOTES AND THE WARRANTS, AND THIS AGREEMENT IS A
VALID AND BINDING AGREEMENT OF BORROWER ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT THAT SUCH ENFORCEMENT MAY BE SUBJECT TO BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS NOW OR HEREAFTER IN EFFECT
RELATING TO CREDITORS' RIGHTS.
3.3 NO VIOLATIONS. NEITHER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, NOR THE PERFORMANCE OF ANY OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER
WILL VIOLATE (OR, WITH THE PASSAGE OF TIME, WILL VIOLATE) ANY MATERIAL TERM,
COVENANT, CONDITION, OR PROVISION OF ANY CONTRACT (WRITTEN OR UNWRITTEN) OR ANY
DOCUMENT, CERTIFICATE OF INCORPORATION, BY-LAW, JUDGMENT,
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DECREE, ORDER, OR REGULATION OF ANY COURT OR GOVERNMENTAL OR REGULATORY
AUTHORITY BY WHICH BORROWER IS BOUND OR SUBJECT.
3.4 CAPITALIZATION. AS OF MAY 17, 2001, THE AUTHORIZED CAPITAL STOCK OF
BORROWER CONSISTED OF 50,000,000 SHARES OF COMMON STOCK, $.001 PAR VALUE PER
SHARE, OF WHICH 31,222,181 SHARES WERE ISSUED AND OUTSTANDING, AND, 1,000,000
SHARES OF PREFERRED STOCK, PAR VALUE $.001 PER SHARE, OF WHICH NO SHARES WERE
ISSUED AND OUTSTANDING. ALL ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF
BORROWER ARE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, AND ALL SECURITIES OF
THE BORROWER HAVE BEEN ISSUED IN COMPLIANCE WITH ALL APPLICABLE STATE AND
FEDERAL SECURITIES LAWS. AS OF THE DATE HEREOF, BORROWER HAD OUTSTANDING (A)
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR BORROWER COMMON STOCK, (B)
OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE OR SUBSCRIBE FOR COMMON STOCK OR
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR COMMON STOCK OF BORROWER, OR (C)
CONTRACTS, COMMITMENTS, AGREEMENTS, UNDERSTANDINGS OR ARRANGEMENTS OF ANY KIND
RELATING TO THE ISSUANCE OF ANY COMMON STOCK OF THE BORROWER, ANY SUCH
CONVERTIBLE OR EXCHANGEABLE SECURITIES OR ANY SUCH OPTIONS, WARRANTS OR RIGHTS,
TOTALING 2,286,287 SHARES, AND (D) CONTINGENT COMMITMENTS TO ISSUE WARRANTS TO
HARVARD MANAGEMENT COMPANY, AND REEF MANAGEMENT CORP.
3.5 FINANCIAL STATEMENTS; SEC FILINGS. (A) BORROWER HAS HERETOFORE
DELIVERED TO LENDER AN AUDITED FINANCIAL STATEMENT OF THE COMPANY AND ITS
SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2000 (THE "FINANCIAL STATEMENT"),
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED. THE FINANCIAL STATEMENT AND THE NOTES
THERETO ARE TRUE, COMPLETE AND ACCURATE AND FAIRLY PRESENT THE ASSETS,
LIABILITIES AND FINANCIAL CONDITION OF BORROWER AS AT THE DATE THEREOF,
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AND SUCH STATEMENT OF INCOME AND THE NOTES THERETO ARE TRUE, COMPLETE AND
ACCURATE AND FAIRLY PRESENT THE RESULTS OF OPERATIONS FOR THE PERIOD THEREIN
REFERRED TO ALL IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
CONSISTENTLY APPLIED THROUGHOUT THE PERIOD INVOLVED.
(B) BORROWER HAS HERETOFORE DELIVERED TO EACH LENDER A COPY OF
THE FORM 10-Q FILED BY BORROWER WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
THE QUARTER ENDED MARCH 31, 2001, RECEIPT OF WHICH IS ACKNOWLEDGED, AND EACH
LENDER HAS HAD THE OPPORTUNITY TO REVIEW ALL OF THE QUARTERLY AND ANNUAL REPORTS
FILED BY BORROWER WITH THE SECURITIES AND EXCHANGE COMMISSION AS OF THE DATE
HEREOF.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES. BORROWER HAS GOOD, VALID AND
MARKETABLE TITLE TO ALL THE PROPERTIES AND ASSETS WHICH IT PURPORTS TO OWN
(REAL, PERSONAL AND MIXED, TANGIBLE AND INTANGIBLE), INCLUDING, WITHOUT
LIMITATION, ALL THE PROPERTIES AND ASSETS REFLECTED IN THE FINANCIAL STATEMENT
AND ALL THE PROPERTIES AND ASSETS PURCHASED BY BORROWER SINCE THE DATE OF THE
FINANCIAL STATEMENT. EXCEPT AS SET FORTH IN THE FINANCIAL STATEMENT OR REFLECTED
THEREIN AS A CAPITAL LEASE, ALL SUCH PROPERTIES AND ASSETS ARE FREE AND CLEAR OF
ALL TITLE DEFECTS OR OBJECTIONS, LIENS, CLAIMS, CHARGES, SECURITY INTERESTS OR
OTHER ENCUMBRANCES OF ANY NATURE WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
LEASES, CHATTEL MORTGAGES, CONDITIONAL SALES CONTRACTS, COLLATERAL SECURITY
ARRANGEMENTS AND OTHER TITLE OR INTEREST RETENTION ARRANGEMENTS, AND ARE NOT, IN
THE CASE OF REAL PROPERTY, SUBJECT TO ANY RIGHTS OF WAY, BUILDING USE
RESTRICTIONS, EXCEPTIONS, VARIANCES, RESERVATIONS OR LIMITATIONS OF ANY NATURE
WHATSOEVER EXCEPT, WITH RESPECT TO ALL SUCH PROPERTIES AND ASSETS, (A) LIENS
SHOWN ON THE FINANCIAL STATEMENT AS SECURING
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SPECIFIED LIABILITIES OR OBLIGATIONS AND LIENS INCURRED IN CONNECTION WITH THE
PURCHASE OF PROPERTY AND/OR ASSETS, IF SUCH PURCHASE WAS EFFECTED AFTER THE DATE
OF THE FINANCIAL STATEMENT, WITH RESPECT TO WHICH NO DEFAULT EXISTS; (B) MINOR
IMPERFECTIONS OF TITLE, IF ANY, NONE OF WHICH IS SUBSTANTIAL IN AMOUNT,
MATERIALLY DETRACTS FROM THE VALUE OR IMPAIRS THE USE OF THE PROPERTY SUBJECT
THERETO, OR IMPAIRS THE OPERATIONS OF BORROWER AND WHICH HAVE ARISEN ONLY IN THE
ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST PRACTICE SINCE THE DATE OF
THE FINANCIAL STATEMENT; AND (C) LIENS FOR CURRENT TAXES NOT YET DUE. WITH
RESPECT TO THE PROPERTY AND ASSETS IT LEASES, BORROWER IS IN COMPLIANCE WITH
SUCH LEASES, AND BORROWER HOLDS VALID LEASEHOLD INTERESTS IN SUCH PROPERTY AND
ASSETS FREE OF ANY LIENS, ENCUMBRANCES AND SECURITY INTERESTS OF ANY PARTY OTHER
THAN THE LESSORS OF SUCH PROPERTY AND ASSETS.
3.7 LITIGATION. THERE IS NO ACTION, SUIT, INQUIRY, PROCEEDING OR
INVESTIGATION BY OR BEFORE ANY COURT OR GOVERNMENTAL OR OTHER REGULATORY OR
ADMINISTRATIVE AGENCY OR COMMISSION PENDING OR, TO THE BEST KNOWLEDGE OF
BORROWER, THREATENED AGAINST OR INVOLVING BORROWER, WHICH CHALLENGES THE
VALIDITY OF THIS AGREEMENT OR ANY ACTION TAKEN OR TO BE TAKEN BY BORROWER
PURSUANT TO THIS AGREEMENT OR IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY; AND BORROWER DOES NOT KNOW OR HAVE ANY REASON TO KNOW OF ANY VALID BASIS
FOR ANY SUCH ACTION, PROCEEDING OR INVESTIGATION.
3.8 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. NO CONSENT,
APPROVAL OR AUTHORIZATION OF, OR DECLARATION, FILING OR REGISTRATION WITH, ANY
GOVERNMENTAL OR REGULATORY AUTHORITY IS REQUIRED TO BE OBTAINED OR MADE BY
BORROWER IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT
THAT APPROVAL OF BORROWER'S SHAREHOLDERS AT A
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MEETING OF SHAREHOLDERS IS REQUIRED PRIOR TO, AND AS A CONDITION TO, THE
ISSUANCE OF ANY SHARES OF BORROWER'S COMMON STOCK UPON THE MANDATORY CONVERSION
OF THE LOAN OR THE EXERCISE OF THE WARRANTS.
3.9 BROKERS AND FINDERS. NEITHER BORROWER NOR ANY OF ITS OFFICERS,
DIRECTORS OR EMPLOYEES HAS EMPLOYED ANY BROKER OR FINDER OR INCURRED ANY
LIABILITY FOR ANY BROKERAGE FEES, COMMISSIONS OR FINDERS' FEES IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EXCEPT FOR ANY LIABILITY
WHICH BORROWER HAS TO STERLING TECHNOLOGY PARTNERS AND SHAMROCK PARTNERS, LTD.
RELATING THERETO.
3.10 SUBSIDIARIES. BORROWER DOES NOT OWN, DIRECTLY OR INDIRECTLY, ANY
CAPITAL STOCK OR OTHER EQUITY SECURITIES OF ANY OTHER CORPORATION OR HAVE ANY
DIRECT OR INDIRECT EQUITY OR OWNERSHIP INTEREST IN ANY OTHER BUSINESS, EXCEPT IN
ITS WHOLLY-OWNED SUBSIDIARIES AND OTHER ENTITIES LISTED IN SECTION 3.10 OF THE
DISCLOSURE SCHEDULE.
3.11 TAXES. BORROWER HAS FILED ALL TAX RETURNS THAT ARE REQUIRED TO
HAVE BEEN FILED IN ANY JURISDICTION, AND HAS PAID ALL TAXES SHOWN TO BE DUE AND
PAYABLE ON SUCH RETURNS AND ALL THE TAXES AND ASSESSMENTS LEVIED UPON IT OR ITS
PROPERTIES, ASSETS, INCOME OR FRANCHISES, TO THE EXTENT SUCH TAXES AND
ASSESSMENTS HAVE BECOME DUE AND PAYABLE AND BEFORE THEY HAVE BECOME DELINQUENT,
EXCEPT FOR TAXES AND ASSESSMENTS THE AMOUNT, APPLICABILITY OR VALIDITY OF WHICH
IS CURRENTLY BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND WITH
RESPECT TO WHICH BORROWER HAS ESTABLISHED ADEQUATE RESERVES. TO THE BEST OF
BORROWER'S KNOWLEDGE, THERE ARE NO TAX EXAMINATIONS IN PROGRESS INVOLVING
BORROWER FOR ANY FISCAL PERIOD OR PERIODS, AND NO NOTICE OF ANY CLAIM FOR TAXES,
WHETHER PENDING OR THREATENED, HAS BEEN RECEIVED, AND NO REQUESTS FOR WAIVERS OF
THE TIME TO ASSESS ANY SUCH TAXES ARE PENDING.
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3.12 AFFILIATE TRANSACTIONS. EXCEPT AS SET FORTH ON SECTION 3.12 OF THE
DISCLOSURE SCHEDULE, BORROWER IS NOT PARTY TO ANY CONTRACT WITH ANY AFFILIATE OF
BORROWER. "AFFILIATE" SHALL MEAN, WITH RESPECT TO BORROWER, ANY PERSON OR ENTITY
THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON
CONTROL WITH BORROWER. FOR PURPOSES OF THIS DEFINITION, "CONTROL" OF AN ENTITY
SHALL MEAN THE POWER, DIRECTLY OR INDIRECTLY, EITHER TO (I) VOTE 10% OR MORE OF
THE SECURITIES HAVING ORDINARY VOTING POWER FOR THE ELECTION OF DIRECTORS OF
SUCH ENTITY OR (II) DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES
OF SUCH ENTITY, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT
OR OTHERWISE. SECTION 3.12 OF THE DISCLOSURE SCHEDULE SETS FORTH A COMPLETE AND
ACCURATE LIST OF ALL OF THE AFFILIATES OF BORROWER.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notices. All notices or other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as duly given on (a) the date of delivery, if delivered in person, by
nationally recognized overnight delivery service or by facsimile or (b) three
days after mailing if mailed from within the continental United States by
registered or certified mail, return receipt requested to the party entitled to
receive the same, if to the Borrower, World Wireless Communications, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a
copy to Law Offices of ▇▇▇▇▇▇▇ ▇. Field, 240 Madison Avenue, New York, New York,
Attn: ▇▇▇▇▇▇▇ ▇. Field, Esq.; and if to a Lender, at its address as set forth in
the books and records of the Borrower. Any party may change his or its address
by giving notice to the other party stating his or its new address. Commencing
on the 10th day after the giving of such notice, such newly designated address
shall be such party's address for the purpose of all notices or other
communications required or permitted to be given pursuant to this Agreement.
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4.2 Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Colorado, without regard to its conflicts of law principles. All
parties hereto (i) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Denver, Colorado, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in Denver, Colorado in any such suit, action or proceeding, but such
consent shall not constitute a general appearance or be available to any other
person who is not a party to this Agreement. All parties hereto agree that the
mailing of any process in any suit, action or proceeding in accordance with the
notice provisions of this Agreement shall constitute personal service thereof.
4.3 Entire Agreement; Waiver of Breach. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
4.4 Binding Effect; Assignability. This Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors and permitted assigns. This
Agreement and the rights of the parties hereunder shall not be assigned except
with the written consent of all parties hereto.
4.5 Captions. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
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4.6 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
4.7 Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
4.8 Amendments. This Agreement may not be amended except in a writing
signed by all of the parties hereto.
4.9 Survival of Representations and Warranties. The representations and
warranties of each party hereto shall survive the execution and the delivery of
this Agreement until one year from the date hereof.
4.10 VOTE FOR STOCKHOLDER APPROVAL. EACH OF LANCER OFFSHORE, INC. AND
LANCER PARTNERS L.P. UNCONDITIONALLY AGREES TO VOTE ALL OF THE SHARES OF THE
COMMON STOCK OF BORROWER OWNED OF RECORD OR BENEFICIALLY BY EACH OF THEM, AND TO
CAUSE ▇▇▇▇▇▇▇ ▇▇▇▇▇, AND THE ORBITER FUND LTD. TO VOTE ALL OF THE SHARES OF
COMMON STOCK OF BORROWER OWNED OF RECORD OR BENEFICIALLY BY EACH OF THEM, AND
ANY OTHER LENDER ALSO AGREES TO VOTE ALL OF THE SHARES OF COMMON STOCK OF
BORROWER OWNED OF RECORD OR BENEFICIALLY BY ANY OF THEM, AT THE NEXT ANNUAL
MEETING OF THE STOCKHOLDERS OF BORROWER, AND AT ANY SPECIAL STOCKHOLDERS MEETING
HELD THEREAFTER, TO APPROVE (I) THE MANDATORY CONVERSION OF ALL OF THE NOTES
INTO SHARES OF THE COMMON STOCK OF BORROWER (PROVIDED THAT SUCH MANDATORY
CONVERSION SHALL NOT OCCUR UNTIL THE SATISFACTION OF THE EQUITY CONDITION SET
FORTH IN SECTION
13
1.5 HEREOF), AND (II) THE ISSUANCE OF SHARES OF THE COMMON STOCK OF BORROWER
ISSUABLE UPON THE EXERCISE OF ALL OF THE WARRANTS OWNED BY EACH OF THE FOREGOING
PERSONS.
WORLD WIRELESS COMMUNICATIONS, INC.
BY: /s/
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
BORROWER
LOAN AMOUNT LENDER
$2,250,000 INITIALLY LANCER OFFSHORE, INC.
BY: /s/
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
$850,000 INITIALLY LANCER PARTNERS L.P.
BY: /s/
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK ISSUABLE UPON
ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE OR TRANSFER
THEREOF MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
No.T__
WORLD WIRELESS COMMUNICATIONS, INC.
Common Stock Purchase Warrant
World Wireless Communications, Inc., a Nevada corporation (the
"Company"), hereby certifies that, for value received,__________, or registered
permitted assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time before 5:30 P.M.,
Central Mountain time, on _______, 2006,__________________ (________) shares of
fully paid and nonassessable shares of Common Stock, $.001 par value, of the
Company, at a purchase price per share of $0.30 (such purchase price per share
as adjusted from time to time as herein provided is referred to herein as the
"Purchase Price"). The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company issued pursuant to the loan agreement, including the exhibits thereto,
between Lancer Offshore, Inc. and the Company dated as of May 17, 2001, as
amended (the "Loan Agreement"), a copy of which is on file at the principal
office of the Company.
As used herein the following terms, unless the context otherwise
requires have the following respective meanings:
(a) The term "Company" shall include World Wireless Communications,
Inc. and any
1
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.001
par value per share, as authorized on the date of the Agreement and any other
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1 Full Exercise. This Warrant may be exercised in full by the holder
hereof by surrender of this Warrant, with the form of subscription at the end
hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment, in cash or by certified or official bank check payable
to the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock for which this Warrant is then exercisable by the
Purchase Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised in part by
surrender of this Warrant in the manner and at the place provided in Section 1.
1 except that the amount payable by the holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subscription at the end hereof by (b) the
Purchase Price then in effect. On any such partial exercise the Company at its
expense will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of like tenor, in the name of the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock for which such Warrant or Warrants may still be
exercised.
1.3. Trustee for Warrantholders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. Delivery of Stock Certificates. etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the holder hereof, or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be
2
entitled, cash equal to such fraction multiplied by the then current market
value of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled to
receive, without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or
similar corporate rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person or party, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, the
holder of this Warrant, on the exercise hereof as provided in Section 1 at any
time after the consummation of such reorganization, consolidation or merger or
the effective date of such dissolution as the case may be, shall receive, in
lieu of the Common Stock issuable on such exercise prior to such consummation or
such effective date, the stock and other securities and property (including
cash) to which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately
3
prior thereto, all subject to further adjustment thereafter as provided in
Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrants after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust company having
its principal office in Denver, Colorado, as trustee for the holder or holders
of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Adjustment for Issue or Sale of Common Stock at Less Than The Purchase
Price in Effect.
5.1 General. If the Company shall, at any time or from time to time,
issue any additional shares of Common Stock (other than shares of Common Stock
excepted from the provisions of this Section 5 by Section 5.4) for a Net
Consideration Per Share less than $0.20 per share during the one-year period
ending May 16, 2002, then, and in each such case:
(a) the Purchase Price shall be lowered to an amount
determined by multiplying such Purchase Price then in effect by a fraction:
(1) the numerator of which shall be (a) the number of
shares of Common Stock outstanding (excluding treasury shares, but including for
this purpose shares of Common Stock issuable upon the exercise of the Warrants)
immediately prior to the issuance of such additional shares of Common Stock,
plus (b) the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Company for the total number of such
additional shares of Common Stock so issued would purchase at the Purchase Price
in effect immediately prior to such issuance, and
(2) the denominator of which shall be (a) the number
of shares of Common Stock outstanding (excluding treasury shares, but including
for this purpose shares of Common Stock issuable upon the exercise of the
Warrants) immediately prior to the issuance of such additional shares of Common
Stock, plus (b) the number of such additional shares of Common Stock so issued;
and
4
(b) the holder of this Warrant shall thereafter, on the
exercise hereof as provided in Section 1, be entitled to receive the number of
shares of Common Stock determined by multiplying the number of shares of Common
Stock which would otherwise (but for the provisions of this Section 5. 1) be
issuable on such exercise by the fraction of which (i) the numerator is the
Purchase Price which would otherwise (but for the provisions of this Section 5.
1) be in effect, and (ii) the denominator is the Purchase Price in effect on the
date of such exercise.
5.2 Definitions, etc. For purposes of this Section 5 and Section 7:
The issuance of any warrants, options or other subscription or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock (or the issuance of
any warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance at such time of such Common
Stock if the Net Consideration Per Share which may be received by the Company
for such Common Stock (as hereinafter determined) shall be less than $0.20 per
share at the time of such issuance and, except as hereinafter provided, an
adjustment in the Purchase Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made upon each such issuance in
the manner provided in Section 5. 1. Any obligation, agreement or undertaking to
issue warrants, options, or other subscription or purchase rights at any time in
the future shall be deemed to be an issuance at the time such obligation,
agreement or undertaking is made or arises. No adjustment of the Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made under Section 5.1 upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible securities if any adjustment shall previously
have been made upon the issuance of any such warrants, options or other rights
or upon the issuance of any convertible securities (or upon the issuance of any
warrants, options or any rights therefor) as above provided. Any adjustment of
the Purchase Price and the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to this Section 5.2 which relates to
warrants, options or other subscription or purchase rights with respect to
shares of Common Stock shall be disregarded if, as, and to the extent that such
warrants, options or other subscription or purchase rights expire or are
canceled without being exercised, so that the Purchase Price effective
immediately upon such cancellation or expiration shall be equal to the Purchase
Price that otherwise would have been in effect at the time of the issuance of
the expired or canceled warrants, options or other subscriptions or purchase
rights, with such additional adjustments as would have been made to that
Purchase Price had the expired or canceled warrants, options or other
subscriptions or purchase rights not been issued.
For purposes of this Section 5.2, the "Net Consideration Per Share"
which may be received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount
equal to the
5
total amount of consideration, if any, received by the Company for the issuance
of such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that would be
issued if all such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities were exercised, exchanged or converted.
(B) The "Net Consideration Per Share" which may be received by
the Company shall be determined in each instance as of the date of issuance of
warrants, options, subscriptions or other purchase rights, or convertible or
exchangeable securities without giving effect to any possible future price
adjustments or rate adjustments which may be applicable with respect to such
warrants, options, subscriptions or other purchase rights or convertible
securities.
For purposes of this Section 5, if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in this Section 5
consists of property other than cash, such consideration shall be deemed to have
the same value as shall be determined in good faith by the Board of Directors of
the Company.
This Section 5.2 shall not apply under any of the circumstances
described in Section 5.4.
5.3. Extraordinary Events. In the event that the Company shall (i)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 5.3. The
holder of this Warrant shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5.3) be issuable on such
exercise by a fraction of which (i) the numerator is the Purchase Price which
would otherwise (but for the provisions of this Section 5.3) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5.4. Excluded Shares. Section 5. 1 shall not apply to the (i) issuance
of up to 3,200,000 shares of Common Stock, or options therefor, to directors,
officers, employees, advisors and consultants of the Company on and after the
date of the issuance of this Warrant pursuant to any stock option, stock
purchase, stock ownership or compensation
6
plan approved by the compensation committee of the Company's Board of Directors,
(ii) issuance of shares of Common Stock upon the exercise of all options and
warrants to purchase Common Stock outstanding as of the date of the issuance of
this Warrant or upon conversion of debt outstanding as of such date, or (iii)
except in the case of the issuance of shares of Common Stock (or securities of
any kind convertible into such shares) at a price of less than $0.20 per share
during the one-year period ending May 16, 2002, the issuance of shares of Common
Stock (or securities of any kind convertible into such shares) pursuant to any
offering of securities of the Company, from time to time, on or before December
31, 2002, to raise up to a total of $35,000,000 of gross proceeds pursuant to
any private placement or public offering transaction or transactions, or both.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Treasurer or Chief Financial Officer or, if the holder of a Warrant so requests,
independent certified public accountants selected by the Company to compute such
adjustment or readjustment in accordance with the terms of the Warrants and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by the
Company for any additional shares of Common Stock issued or sold or deemed to
have been issued or sold, (b) the number of shares of Common Stock outstanding
or deemed to be outstanding, and (c) the Purchase Price and the number of shares
of Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such issue or sale and as adjusted and readjusted as
provided in this Warrant. The Company will forthwith mail a copy of each such
certificate to each holder of a Warrant, and will, on the written request at any
time of any holder of a Warrant, furnish to such holder a like certificate
setting forth the Purchase Price at the time in effect and showing how it was
calculated.
7
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of
any class or securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares
of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issue of Common Stock on the conversion of
the Notes and the exercise of the Warrants), then and in each such event the
Company will mail or cause to be mailed to each registered holder of a Warrant a
notice specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant and the persons or class of persons to whom
such proposed issue or grant is to be offered or made. Such notice shall be
mailed at least 20 days prior to the date specified in such notice on which any
such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling
8
in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction of any Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company hereby appoints Interwest Transfer Co.,
Inc., with offices in Salt Lake City, Utah, as its agent for the purpose of
issuing Common Stock on the exercise of the Warrants pursuant to Section 1,
exchanging Warrants pursuant to Section 10, and replacing Warrants pursuant to
Section 11, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
The Company may change such agent and designate a new agent in the United States
for the above-described purposes by written notice to each holder of a Warrant.
13. Remedies. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that a holder of this Warrant may suffer
irreparable harm and that such terms may be specifically enforced by a decree by
a court of competent jurisdiction for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability. This Warrant is issued upon the following terms, to all
of which each holder or owner hereof by the taking hereof consents and agrees:
(a) subject to compliance with all applicable securities laws, title to
this Warrant may be transferred by endorsement (by the holder hereof executing
the form of assignment at the end hereof) and delivery in the same manner as in
the case of a negotiable instrument transferable by endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
15. Notices. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of
9
delivery, if delivered in person, by nationally recognized overnight delivery
service or by facsimile or (b) three days after mailing if mailed from within
the continental United States by registered or certified mail, return receipt
requested to the party entitled to receive the same, if to the Company, World
Wireless Communications, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇., ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Law Offices of ▇▇▇▇▇▇▇ ▇.
Field, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇.
Field, Esq., and if to the Holder of a Warrant, at the address of such Holder
shown on the books of the Company. Any party may change his or its address by
giving notice to the other party stating his or its new address. Commencing on
the 10th day after the giving of such notice, such newly designated address
shall be such party's address for the purpose of all notices or other
communications required or permitted to be given pursuant to this Agreement.
16. Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Colorado, determined without regard to its conflicts of law principles. All
parties hereto (i) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Denver, Colorado, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in Denver, Colorado, in any such suit, action or proceeding, but
such consent shall not constitute a general appearance or be available to any
other person who is not a party to this Agreement. All parties hereto agree that
the mailing of any process in any suit, action or proceeding in accordance with
the notice provisions of this Agreement shall constitute personal service
thereof.
17. Entire Agreement; Waiver of Breach. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
18. Severability. If any provision of this Agreement shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
19. Amendment. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
20. Expiration. The right to exercise this Warrant shall expire at 5:30
P.M., Central Mountain time, on __________, 2006.
10
21. Attorneys Fees and Costs. In the event of any litigation arising under
or relating to this Warrant, the prevailing party in such dispute shall be
entitled to recover its costs and expenses, including reasonable attorney fees,
from the other.
22. Restrictions on Transferability; Restrictive Legend. The holder
acknowledges that the shares of Common Stock issuable upon exercise of this
Warrant are subject to restrictions under applicable Federal and state
securities laws. Each certificate representing shares of Common Stock issued
shall, upon the exercise of this Warrant, bear the following legend in addition
to such other restrictive legends as may be required by law or by the Loan
Agreement:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws, and no sale or transfer thereof may be effected without an
effective registration statement or an opinion of counsel for the holder,
satisfactory to the company, that such registration is not required under the
act and any applicable state securities laws."
23. Restrictions on Exercise. Notwithstanding anything contained in this
Warrant to the contrary, this Warrant cannot be exercised, and no shares of the
Company's Common Stock shall be issued, until the issuance of shares of the
Company's Common Stock upon the exercise hereof is approved by the Company's
shareholders at a meeting of such shareholders.
Dated: , 2001
---------------
WORLD WIRELESS
COMMUNICATIONS, INC.
By: /s/
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
11
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: World Wireless Communications, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder shares of
Common Stock of World Wireless Communications, Inc. and herewith makes payment
of $ therefor, and requests that the certificates for such shares be issued
in the name of, and delivered to whose address is
---------------------------------------------
(Street Address)
---------------------------------------------
(City, State and Zip Code)
---------------------------------------------
Dated:
-----------------
------------------------------------
(Signature)
Signature must conform to name of
holder specified on the face of the
Warrant)
------------------------------------
(Print Name)
------------------------------------
(Street Address)
------------------------------------
(City, State and Zip Code)
------------------------------------
(Person's Social Security Number
or Tax Identification Number)
12
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________________________________ the right represented by the
within Warrant to purchase shares of Common Stock of World Wireless
Communications, Inc. to which the within Warrant relates, and appoints
____________________________as its attorney to transfer such right on the books
of World Wireless Communications, Inc. with full power of substitution in the
premises.
Dated:
----------------
------------------------------------
(Signature)
Signature must conform to name of
holder specified on the face of the
Warrant)
------------------------------------
(Print Name)
------------------------------------
(Street Address)
------------------------------------
(City, State and Zip Code)
------------------------------------
(Person's Social Security Number
or Tax Identification Number)
Signed in the presence of:
------------------------------
13
EXHIBIT C
AMENDED AND RESTATED
PLEDGE/SECURITY AGREEMENT
THIS PLEDGE/SECURITY AGREEMENT, dated as of the 17th day of
May, 2001, as amended as of August 7, 2001, effective as of May 17, 2001, by and
between World Wireless Communications, Inc., a Nevada corporation ("Pledgor"),
Lancer Offshore, Inc. and each of the other holders of the Senior Secured Notes
(the "Notes") purchased pursuant to the Confidential Private Placement
Memorandum of Pledgor dated May 17, 2001, as amended, who is listed on Schedule
1 and whose separate signature page is attached hereto, as the same may be
amended from time to time (collectively known as "Pledgee" or the "Holders").
WHEREAS, Pledgor wishes to raise a minimum of $1,125,000 and a
maximum of $5,000,000 through a sale of the units consisting of the Senior
Secured Notes and warrants to purchase common stock of the Company (the "Units")
pursuant to the Confidential Private Placement Memorandum dated May 17, 2001, as
amended (the "Memorandum");
WHEREAS, Pledgee desires to obtain a security interest in
certain property owned by Pledgor; and
WHEREAS, as an inducement to Pledgee's purchase of the Units
from Pledgor, Pledgor has agreed to grant to Pledgee a security interest in and
to the Pledged Collateral (as hereinafter defined).
1
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and for other good and valuable
consideration, the adequacy and receipt for which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Interpretations. Nothing herein expressed or
implied is intended or shall be construed to confer upon any person other than
Pledgee any right, remedy or claim under or by reason hereof. All covenants,
stipulations and agreements herein contained by or on behalf of Pledgee shall be
for the sole and exclusive benefit of Pledgee.
Section 1.2 Obligations Secured. The obligations secured
hereby are the obligations of Pledgor to Pledgee under the Notes sold by Pledgor
to Pledgee pursuant to the Memorandum, in the maximum principal amount thereof
outstanding from time to time, up to a maximum amount of $5,000,000 thereunder,
and any additional amounts payable by or chargeable to Pledgor thereunder or
hereunder (the "Obligations").
ARTICLE II
PLEDGE AND ADMINISTRATION OF PLEDGED COLLATERAL
Section 2.1 Pledged Collateral.
(a) Pledgor hereby pledges to Pledgee, and creates in Pledgee
for its benefit, a security interest, for such time as the Obligations shall
remain outstanding, in and to all of Pledgor's right, title and interest in and
to
(i) the property listed in Exhibit 1 attached hereto
(and signed by Pledgor), including, without limitation, any securities described
therein (which securities are
2
collectively referred to as the "Pledged Securities"), now owned by Pledgor, and
all machinery, equipment, automobiles, accounts receivable, inventory,
securities of any kind, and general intangibles acquired by Pledgor on or after
the date of this Agreement; and
(ii) all products and proceeds from the pledged
property.
The property pledged in Section 2.1(a)(i) hereof, the Pledged
Securities and the products thereof and the proceeds of all such items are
hereinafter collectively referred to as the "Pledged Collateral." The security
interest granted by Pledgor to Pledgee in and to the Pledged Collateral shall be
free and clear of all security interests and restrictions on transfer of any
kind except as provided in this Agreement or as may be imposed by applicable
law.
(b) Simultaneously with the execution and delivery of this
Agreement, Pledgor shall make, execute, acknowledge, file, record and deliver to
Pledgee any documents reasonably requested by Pledgee to perfect its
first-in-priority security interest in the Pledged Collateral. Simultaneously
with the execution and delivery of this Agreement, Pledgor shall make, execute,
acknowledge, file, record and deliver to Pledgee such documents and instruments,
including, without limitation, financing statements, certificates, affidavits
and forms as may, in the reasonable opinion of Pledgee, be necessary to
effectuate, complete or perfect, or to continue and preserve, the
first-in-priority security interest of Pledgee in the Pledged Collateral, and
Pledgee shall hold such documents and instruments as secured party, subject to
the terms and conditions contained herein.
Section 2.2 Rights; Interests; Etc. (a) So long as no Event of
Default (as hereinafter defined) shall have occurred and be continuing:
3
(i) Pledgor shall be entitled to exercise any and all
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms hereof; and
(ii) Pledgor shall be entitled to receive and retain
any and all payments paid or made in respect of the Pledged Collateral.
(b) Upon the occurrence and during the continuance of an Event
in Default:
(i) Subject to Section 2.2 (b) (iii) hereof, all
rights of Pledgor to exercise the rights which it would otherwise be entitled to
exercise pursuant to Section 2.2 (a) (i) hereof and to receive payments which it
would otherwise be authorized to receive and retain pursuant to Section 2.2 (a)
(ii) hereof shall be suspended, and all such rights shall thereupon become
vested in Pledgee who shall thereupon have the sole right to exercise such
rights and to receive and hold as Pledged Collateral such payments; provided,
however, that if Pledgee shall become entitled and shall elect to exercise its
right to realize on the Pledged Collateral pursuant to Article V hereof, then
all cash sums received by Pledgee, or held by Pledgor for the benefit of Pledgee
and paid over pursuant to Section 2.2 (b) (ii) hereof, shall be applied against
any outstanding Obligations.
(ii) All interest, dividends, income and other
payments and distributions which are received by Pledgor contrary to the
provisions of Section 2.2(b)(i) hereof shall be received in trust for the
benefit of Pledgee, shall be segregated from other property of Pledgor and shall
be forthwith paid over to Pledgee;
(iii) notwithstanding anything contained herein to
the contrary. Pledgor shall retain any voting rights it may have with respect to
any of the Pledged Securities until such time as Pledgee is entitled and elects
to exercise its rights to realize on the Pledged Securities pursuant to Article
V hereof.
4
(c) Each of the following events shall constitute a default
under this Agreement (each an "Event of Default"):
(i) any default, whether in whole or in part, shall
occur in the payment to Pledgee of principal, interest or other item comprising
the Obligations as and when due, which default shall continue for a period of 10
days after the receipt of written notice thereof by Pledgor;
(ii) any default, whether in whole or in part, shall
occur in the due observance or performance of any other covenant, term or
provision to be performed under this Agreement by Pledgor, or the Loan
Agreement, and all exhibits thereto, of even date herewith, which default is not
described in any other subsection of this Section, and such default shall
continue for a period of 10 days after the receipt of written notice thereof by
Pledgor; provided, however, that if Pledgor shall have commenced to cure such
default within such 10-day period and shall proceed continuously in good faith
and with due diligence to cure such default, then such period instead shall be
thirty (30) days;
(iii) Pledgor shall (1) make a general assignment for
the benefit of its creditors, (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties, (3) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code,
(4) file with or otherwise submit to any governmental authority any petition,
answer or other document seeking (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of debtors, dissolution or liquidation, (5) file or otherwise submit
5
any answer or other document admitting or failing to contest the material
allegations of a petition or other document filed or otherwise submitted against
it in any proceeding under any such applicable law, or (6) be adjudicated a
bankrupt or insolvent by a court of competent jurisdiction; or
(iv) any case, proceeding or other action shall be
commenced against Pledgor for the purpose of effecting, or an order, judgment or
decree shall be entered by any court of competent jurisdiction approving (in
whole or in part) anything specified in of Section 2.2(c) (iii) hereof, or any
receiver, trustee, assignee, custodian, sequestrator, liquidator or other
official shall be appointed with respect to Pledgor, or shall be appointed to
take or shall otherwise acquire possession or control of all or a substantial
part of the assets and properties of Pledgor, and any of the foregoing shall
continue unstayed and in effect for any period of 60 days.
ARTICLE III
ATTORNEY-IN-FACT; PERFORMANCE
Section 3.1 Pledgee Appointed Attorney-in-Fact. Upon the
occurrence of an Event of Default and only as long as such Event of Default
shall be continuing, Pledgor hereby appoints Pledgee Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of Pledgor
or otherwise, from time to time in Pledgee's discretion to take any action and
to execute any instrument which Pledgee reasonably may deem necessary to
accomplish the purposes of this Agreement, including, without limitation, to
receive and collect all instruments made payable to Pledgor representing any
payment in respect of the Pledged Collateral or any part thereof and to give
full discharge for the same.
Section 3.2 Pledgee May Perform. If Pledgor fails to perform
any agreement contained herein, Pledgee, at its option, may itself perform, or
cause performance of, such
6
agreement, and the reasonable expenses of Pledgee incurred in connection
therewith shall be payable by Pledgor under Section 8.3.
Section 3.3 Appointment of Agent. The Holders shall appoint
from time to time by a Pledgee Representative Agreement, in the form attached to
the Loan Agreement between the parties hereto as Exhibit 3, one Pledgee to act
as their authorized representative for the benefit of all of the Holders (the
"Pledgee Representative"), and to perform all of the acts of Pledgee permitted
or required hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Authorization; Enforceability. Each of the parties
hereto represents and warrants that it has taken all action necessary to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; and upon execution and delivery, this
Agreement shall constitute a valid and binding obligations of the respective
party, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights or by the principles governing the
availability of equitable remedies.
Section 4.2 Ownership of Pledged Collateral. Pledgor warrants
and represents that Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or other charge
or encumbrance except for the security interest created by this Agreement.
Section 4.3 Validity of Security Interest. Pledgor warrants
and represents that the pledge of the Pledged Collateral pursuant to this
Agreement creates a valid and perfected first priority pledge and security
interest in the Pledged Collateral.
7
Section 4.4 Due Organization. Pledgor warrants and represents
that it (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, (ii) has the corporate power and
authority necessary to entitle it to use its corporate name and to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted or proposed to be conducted; (iii) is duly qualified and in
good standing to do business as presently conducted or proposed to be conducted;
and (iv) is duly qualified and in good standing to do business in every
jurisdiction where the nature of the business conducted or the property owned or
leased by it requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business or financial condition
of such corporation.
ARTICLE V
DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
Section 5.1 Event Default and Remedies.
(a) If an Event of Default described in Section 2.2(c)(i),
(ii) and (v) occurs and is continuing, then in each such case the Pledgee
Representative or the Holders of not less than a majority in principal amount of
the Notes may declare the principal amount to be due and payable immediately, by
a notice in writing to the Company, and upon any such declaration, such
principal amount shall become immediately due and payable. If an Event of
Default described in Sections 2.2(c)(iii) or (iv) occurs and is continuing, then
the principal amount of all the Notes shall automatically become immediately due
and payable without declaration or other act on the part of any Holder.
8
(b) Upon the occurrence of an Event of Default, the Pledgee
Representative, in its sole discretion shall be entitled to receive all
distributions with respect to the Pledged Collateral, to cause the Pledged
Collateral to be transferred into the name of Pledgee or its nominee, to dispose
of the Pledged Collateral, and to realize upon any and all rights in the Pledged
Collateral then held by Pledgee.
Section 5.2 Method of Realizing Upon the Pledged Collateral;
Other Remedies. Upon the occurrence of an Event of Default, in addition to any
rights and remedies available at law or in equity, the following provisions
shall govern Pledgee's right to realize upon the Pledged Collateral:
(a) Any item of the Pledged Collateral may be sold for cash or
other value in any number of lots at brokers board, public auction or private
sale and may be sold without demand, advertisement or notice (except that
Pledgee shall give Pledgor ten (10) business days prior written notice of the
time and place or of the time after which a private sale may be made (the "Sale
Notice"), which notice shall be in any event commercially reasonable. At any
sale or sales of the Pledged Collateral, Pledgor may bid for and purchase the
whole or any part of the Pledged Collateral and, upon compliance with the terms
of such sale, may hold, exploit and dispose of the same without further
accountability to Pledgee. Pledgor will execute and deliver, or cause to be
executed and delivered, such instruments, documents, assignments, waivers,
certificates, and affidavits and supply or cause to be supplied such further
information and take such further action as Pledgee reasonably shall require in
connection with any such sale.
(b) Any cash being held by Pledgee as Pledged Collateral and
all cash proceeds received by Pledgee in respect of, sale of, collection from,
or other realization upon all or any part of the Pledged Collateral shall be
applied as follows:
9
(i) to the payment of all amounts due the Pledgee
Representative and the Holders for the expenses reimbursable to it or them
hereunder or owed to it pursuant to Section 8.3 hereof;
(ii) to the payment of the amounts then due and
unpaid for principal of and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably among all the Holders in
accordance with the ratio of the principal amount of the Notes held by a Holder
to the total principal amount of all of the Notes then outstanding, without
preference or priority of an kind, according to the amounts due and payable on
such for principal and interest, respectively; and
(iii) the balance, if any, to the person or persons
entitled thereto, including, without limitation, Pledgor.
(c) It is understood that if all or any part of the Pledged
Collateral is sold as a private sale, Pledgee will sell such Collateral to the
person making the highest bid for such Pledged Collateral, provided that Pledgee
shall not be required to conduct an auction or otherwise solicit any specific
number of offers for the Pledged Collateral or any part thereof.
(d) In addition to all of the rights and remedies which
Pledgor and Pledgee may have pursuant to this Agreement, Pledgor and Pledgee
shall have all of the rights and remedies provided by law, including, without
limitation, those under the Uniform Commercial Code and as set forth in Section
5(e) hereof.
(e) (i) If Pledgor fails to pay such amounts due upon the
occurrence of an Event of Default which is continuing, then forthwith upon the
Pledgee Representative's demand
10
the Pledgee Representative, in any capacity as it may determine, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against Pledgor or any other obligor upon the Notes and collect the monies
adjudged or decreed to be payable in the manner provided by law out of the
property of Pledgor or any other obligor upon such Notes, wherever situated.
(ii) Pledgor agrees that it shall be liable for any
expenses incurred by the Pledgee Representative and the Holders in connection
with enforcement, collection and preservation of the Notes, including, without
limitation, legal fees and expenses, and such amounts shall be deemed included
under Section 8.3 hereof.
(iii) All rights of action and claims under this
Agreement may be prosecuted and enforced by the Pledgee Representative without
the possession of any of the Notes or the production thereof in any proceeding
relating thereto, any such proceeding instituted by the Pledgee Representative
may be brought in any capacity as it may determine and any recovery of judgment
shall, after provision for the payment of the legal fees and expenses and other
expenses paid or incurred by the Pledgee Representative as permitted hereunder,
be for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
Section 5.3 Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relating to Pledgor or any other obligor upon the
Notes or the property of Pledgor or of such other obligor or their creditors,
the Pledgee Representative (irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by declaration or
otherwise
11
and irrespective of whether the Pledgee Representative shall have made any
demand on Pledgor for the payment of overdue principal, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal of the Notes and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Holders (including any claim for the legal fees and
expenses and other expenses paid or incurred by the Pledgee Representative
permitted hereunder and of the holders allowed in such judicial proceeding), and
(ii) to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Pledgee Representative and, in the
event that the Pledgee Representative shall consent to the making of such
payments directly to the Holders, to pay to the Agent any amounts for expenses
due it hereunder.
(b) Nothing herein contained shall be deemed to authorize the
Pledgee Representative to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the rights of any holder thereof or to authorize the Pledgee
Representative to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.4 Duties Regarding Pledged Collateral. Pledgee shall
have no duty as to the collection or protection of the Pledged Collateral or any
income thereon or as to the
12
preservation of any rights pertaining thereto, beyond the safe custody and
reasonable care of any of the Pledged Collateral actually in Pledgee's
possession.
Section 5.5 Limitation on Suits.
(a) No holder of the Notes shall have any right to institute
any proceeding, judicial or otherwise, with respect to the Notes for any other
remedy hereunder, if the Pledgee Representative has instituted a proceeding
pursuant to Section 5.2(e) hereof.
(b) Except as otherwise provided herein, every right and
remedy given by this Agreement or by law to the Pledgee Representative or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Pledgee Representative or by the Holders, as the case may be.
Section 5.6 Additional Remedies upon Default. Notwithstanding
anything contained in this Agreement to the contrary, if Pledgor defaults in the
payment of principal or interest on any Note at the maturity date of any Note,
in addition to any interest rate penalty provided in the Note:
(a) Pledgor shall transfer to Pledgee 1,000,000 shares of the
common stock of Pledgor, subject to applicable securities laws restrictions, for
each 30-day period during which such default shall be in existence (the "Default
Shares"), commencing with the month in which such default first occurs and
continuing until such default is cured or otherwise satisfied, but in no event
shall Pledgor be required to issue more than 12,500,000 shares pursuant to this
Section 5.6 (a). The representations and warranties of Pledgee set forth in
Section 3 of Pledgee's Subscription Agreement shall be true and correct with
respect to such Default Shares on the date of each such transfer; and
13
(b) Pledgee shall have the right to convert the full amount of
the Pledgee's interest in the Obligations hereunder and under the Notes into
shares of common stock of Pledgor at the rate of one share for each $0.20 of the
amount of the Obligations (with any fraction rounded up to the next whole share)
in full satisfaction of all of Pledgee's interest in the Obligations hereunder
and Pledgor's obligations under the Obligations and the Notes in full by sending
Pledgor written notice to such effect within 30 days after the maturity date.
ARTICLE VI
AFFIRMATIVE COVENANTS
Pledgor covenants and agrees that, from the date hereof and
until the Obligations have been fully paid and satisfied, unless Pledgee shall
consent otherwise in writing (as provided in Section 8.4 hereof):
Section 6.1 Existence, Properties, Etc.
(a) Pledgor shall do, or cause to be done, all things, or
proceed with due diligence with any actions or courses of action, that may be
necessary (i) to maintain its due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve and
keep in full force and effect all qualifications, licenses and registrations in
those jurisdictions in which the failure to do so could have a Material Adverse
Effect (as defined in this Section 6.1(a)); and (b) Pledgor shall not do, or
cause to be done, any act impairing its corporate power or authority (i) to
carry on its business as now conducted, and (ii) to execute or deliver this
Agreement, or any other loan instrument delivered pursuant to the Confidential
Private Placement Memorandum of Pledgor dated May 17, 2001, as amended (which
other loan instruments collectively shall be referred to the "Loan Instruments")
to which it is or will be a party, or perform any of its obligations hereunder
or thereunder. For purposes of this Agreement, the term "Material Adverse
Affect" shall mean any material and adverse affect, whether
14
individually or in the aggregate, upon (a) Pledgor's assets, business,
operations, properties or condition, financial or otherwise, (b) the ability of
Pledgor to make payment as and when due of all or any part of the Obligations,
or (c) the Pledged Collateral.
Section 6.2 Payment of Debts, Taxes, Etc. Pledgor shall pay,
or cause to be paid, all of its indebtedness and other liabilities and perform,
or cause to be performed, all of its obligations in accordance with the
respective terms thereof, and pay and discharge, or cause to be paid or
discharged, all taxes, assessments and other governmental charges and levies
imposed upon it, upon its income or receipts or upon any of its assets and
properties on or before the last day on which the same may be paid without
penalty, as well as pay all other lawful claims (whether for services, labor,
materials, supplies or otherwise) as and when due; provided, however, that it
shall not constitute a breach of this Section if Pledgor fails to perform any
such obligation or to pay any such indebtedness or other liability (except for
the Obligations), tax, assessment, or governmental or other charge, levy or
claim (i) that is being contested in good faith and by proper proceedings
diligently pursued and (ii) if the effect of such failure to pay or perform will
not (A) accelerate the maturity thereof, or of any other debt or obligation of
Pledgor, or (B) subject any part of the assets and properties of Pledgor to sale
or forfeiture.
Section 6.3 Accounts and Reports. Pledgor shall maintain a
standard system of accounting in accordance with generally accepted accounting
principles consistently applied and provide, at its sole expense, to Pledgee the
following:
(a) as soon as available and in any event within 90 days
after the end of each fiscal year of Pledgor,
commencing with the fiscal year ending December 31,
2001, a balance sheet of Pledgor as at the end of
that fiscal year and the
15
related statements of earnings, shareholders' equity
and cash flow for such fiscal year, all with
accompanying notes, in reasonable detail and stating
in comparative form the figures as at the end of and
for the previous fiscal year, prepared in accordance
with generally accepted accounting principles
consistently applied, and audited by a firm of
independent certified public accountants of
recognized standing designated by Pledgee in writing
(including, without limitation, Deloitte & Touche
LLP) to audit Pledgor's books;
(b) as soon as available, and in any event within 60 days
after the end of each three-month period of each of
its fiscal years (commencing with the quarter ending
June 30, 2001), a balance sheet of Pledgor as at the
end of such three-month period and the related
statements of earnings, shareholders' equity and cash
flow for such period, all with accompanying notes, in
reasonable detail and stating in comparative form the
figures as at the end of and for the previous fiscal
year's applicable period, prepared in accordance with
generally accepted accounting principles consistently
applied, and compiled by a firm of independent
certified public accountants of recognized standing
designated by Pledgee in writing (including, without
limitation, Deloitte & Touche LLP) to review
Pledgor's books;
(c) AS SOON AS AVAILABLE, A COPY OF ANY NOTICE OR OTHER
COMMUNICATION ALLEGING ANY NONPAYMENT OR OTHER
MATERIAL BREACH OR DEFAULT, OR ANY FORECLOSURE OR
OTHER ACTION RESPECTING ANY MATERIAL PORTION OF
16
ITS ASSETS AND PROPERTIES, RECEIVED RESPECTING ANY OF
THE INDEBTEDNESS OF PLEDGOR IN EXCESS OF $25,000
(OTHER THAN THE OBLIGATIONS), OR ANY DEMAND OR OTHER
REQUEST FOR PAYMENT UNDER ANY GUARANTY, ASSUMPTION,
PURCHASE AGREEMENT OR SIMILAR AGREEMENT OR
ARRANGEMENT RESPECTING THE INDEBTEDNESS OR
OBLIGATIONS OF OTHERS IN EXCESS OF $25,000, INCLUDING
ANY RECEIVED FROM ANY PERSON ACTING ON BEHALF OF THE
HOLDER OR BENEFICIARY THEREOF; and
(d) within 30 days after the making of each submission or
filing, a copy of any report, registration statement,
proxy statement, financial statement, notice or other
document, whether periodic or otherwise, submitted to
the shareholders of Pledgor, or submitted to or filed
by Pledgor with any governmental authority involving
or affecting (i) any registration of Pledgor or its
securities, (ii) Pledgor that could have a Material
Adverse Effect, (iii) the Obligations, (iv) any part
of the Pledged Collateral or (v) any of the
transactions contemplated in this Agreement or the
Loan Instruments, including, without limitation,
those submitted or filed pursuant to the Securities
Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended.
17
Section 6.4 Compliance with Applicable Laws; Operations.
Pledgor promptly and fully shall comply with, conform to and obey all current
applicable laws and all future applicable laws in all material respects as the
same shall take effect, the non-compliance with or violation of which could have
a Material Adverse Effect. In any event, Pledgor shall procure, store,
manufacture, distribute and dispose of all inventory and use and operate all
machinery, equipment and real estate in full compliance with and conformity to
all applicable laws in all material respects, including, without limitation, (i)
all applicable permits, license, authorizations, consents or approvals of
authorities and (ii) all applicable laws pertaining to employment, zoning,
pollution, hazardous materials, toxic substances, public health or safety,
occupational health or safety or the environment.
Section 6.5 Maintenance and Insurance.
(a) Pledgor shall maintain or cause to be maintained, at its
own expense, all of its assets and properties in good working order and
condition, making all necessary repairs thereto and renewals and replacements
thereof.
(b) Pledgor shall maintain or cause to be maintained, at its
own expense, insurance in form, substance and amounts (including deductibles),
which Pledgor deems reasonably necessary to Pledgor's business, (i) adequate to
insure all assets and properties of Pledgor, which assets and properties are of
a character usually insured by persons engaged in the same or similar business
against loss or damage resulting from fire, flood, hurricanes or other risks
included in an extended coverage policy, (ii) against public liability and other
tort claims that may be incurred by Pledgor, (iii) as may be required by the
Loan Instruments or applicable law and (iv) as may be reasonably requested by
Pledgee, all with adequate, financially sound and reputable insurers, and all
naming Pledgee as an additional insured and loss payee under a standard
mortgagee's endorsement as Pledgee's interest may appear.
18
Section 6.6 Contracts and Other Collateral. Pledgor shall
perform all of its obligations under or with respect to each instrument,
receivable, contract and other intangible included in the Pledged Collateral to
which Pledgor is now or hereafter will be party on a timely basis and in the
manner therein required, including, without limitation, this Agreement; and
Pledgor shall enforce all of its rights under all such instruments, agreements
and other receivable on a timely basis to the full extent permitted by
applicable law.
Section 6.7 Defense of Collateral, Etc. Pledgor shall defend
and enforce its right, title and interest in and to any part of (a) the Pledged
Collateral, and (b) if not included within the Pledged Collateral, those assets
and properties whose loss could have a Material Adverse Effect, Pledgor shall
defend Pledgee's right, title and interest in and to each and every part of the
Pledged Collateral, each against all manner of claims and demands on a timely
basis to the full extent permitted by applicable law.
ARTICLE VII
NEGATIVE COVENANTS
Pledgor covenants and agrees that, from the date hereof until
the Obligations have been fully paid and satisfied, unless Pledgee shall consent
otherwise in writing (as provided in Section 8.4 hereof):
Section 7.1 Indebtedness. Pledgor shall not directly or
indirectly permit, create, incur, assume, permit to exist, increase, renew or
extend on or after the date hereof any indebtedness on its part, including
commitments, contingencies and credit availabilities, or apply for or offer or
agree to do any of the foregoing, except that Pledgor may incur or permit to
exist: (a) indebtedness owed to Pledgee; (b) indebtedness incurred in the
ordinary course of business,
19
including, without limitation, to suppliers, distributors, carriers,
materialmen, laborers, counsel, accountants, advisors, sellers or lessors of
machinery and equipment and real estate acquired or leased in connection with
Pledgor's business; and (c) other indebtedness expressly subordinated to the
Obligations by such creditor executing the standard form subordination agreement
of the Pledgee attached hereto as Exhibit 2 (the "Subordination Agreement"), or
otherwise as may be acceptable to Pledgee in its sole discretion and as to which
it consents in writing. Pledgor shall not prepay or acquire, in whole or in
part, any of its indebtedness except to Pledgee as permitted by agreement or
consent or where any prepayments do not exceed the sum of $100,000 in any
calendar year of Pledgor. The indebtedness permitted under clauses (b) and (c)
hereof incurred after the date of this Agreement shall not exceed in the
aggregate $5,000,000.
Section 7.2 Liens and Encumbrances. Pledgor shall not directly
or indirectly make, create, incur, assume or permit to exist any assignment,
pledge, mortgage, security interest or other lien or encumbrance of any nature
in, to or against any part of the Pledged Collateral, or offer or agree to do
so, or own or acquire or agree to acquire any asset or property of any character
subject to any of the foregoing encumbrances (including any conditional sale
contract or other title retention agreement), or assign, pledge or in any way
transfer or encumber its right to receive any income or other distribution or
proceeds from any part of the Pledged Collateral, or enter into any
sale-leaseback financing respecting any part of the Pledged Collateral as
lessee, or cause or assist the inception or continuation of any of the
foregoing; provided, however, that the foregoing restrictions shall not prohibit
(to the extent otherwise not prohibited by this Agreement):
(a) liens for taxes, assessments, governmental charges, levies
or claims described in Section 6.2, if payment thereof shall not then be
required to be made by this Section 7.2;
20
(b) liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not then
required to be paid under Section 6.2, so long as there shall have been set
aside on the books of Pledgor such reserve, if any, as shall be required by
generally accepted accounting principles;
(c) liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance, statutory
obligation or social security legislation, or for any purpose at the time
required by law as a condition precedent to the transaction of business or the
exercise of any of the privileges or licenses of Pledgor;
(d) liens incurred in respect of attachments discharged within
30 days from the making thereof or judgments or awards in force for less than 30
days or with respect to which Pledgor in good faith shall be prosecuting an
appeal or proceeding for review and with respect to which a stay of execution
upon appeal or proceeding for review shall have been secured if required;
(e) the security interests and other liens and encumbrances
granted from time to time to Pledgee;
(f) with respect to indebtedness permitted under Section 7.1,
liens incurred in respect of any financing of Pledgor's machinery, equipment and
automobiles owned by Pledgor on the date hereof with a bank or other financial
institution, provided (A) that the loan instruments evidencing such financing
for such item expressly provide that any lien arising from such financing is
subordinate to the first security interest hereunder and, in the event of a
default thereunder, no collection of the principal, interest and other charges
and expenses thereunder will be made until the full payment of the Obligations,
or otherwise as may be acceptable to
21
Pledgee in its sole discretion and as to which it consents in writing; and (B)
notwithstanding anything contained in this Agreement to the contrary, in the
case of the financing of Pledgor's inventory, accounts receivable, purchase
orders, or product sales or service agreements with a bank or other financial
institution, such lender shall be entitled to a first security interest in such
assets and shall be entitled to collect full payment of the obligations incurred
by Pledgor thereunder at all times, regardless of the Obligations;
(g) liens incurred in respect of indebtedness on the Pledged
Collateral which are subordinated to the Obligations by such creditor(s)
executing the Subordination Agreement; and which are subordinated to the
Obligations, or otherwise as may be acceptable to Pledgee in its sole discretion
and as to which it consents in writing; and
(h) with respect to indebtedness permitted under section 7.1,
liens incurred in respect of indebtedness on machinery, equipment and
automobiles purchased or leased by Pledgor after the date of the execution and
delivery of this Agreement by Pledgor at the closing of the offering made
pursuant to the Memorandum.
Section 7.3 Securities Issuance. Pledgor shall not issue any
of its stock for $0.20 per share or less, nor shall Pledgor issue any note,
warrant, debenture or other security which may convert or be exercised to
acquire Pledgor's stock for $0.20 per share or less, except in the case of
securities issued pursuant to the Memorandum or unless the antidilution clause
contained in the Loan Instruments is applicable.
Section 7.4 License Agreements. Notwithstanding anything
contained in this Agreement to the contrary:
(a) Pledgor shall be entitled to enter into one or more
license agreements covering any of its products in any field of use on
reasonable commercial terms as determined by Pledgor in its sole discretion,
free and clear of any liens, encumbrances or claims of any kind, and
22
Pledgee hereby consents thereto without the need for any further action on its
part with respect thereto, provided that (i) any such license agreement does not
exceed the greater of 10 years or the unexpired term of any patent, (ii) Pledgor
gives Pledgee written notice of Pledgor's execution and delivery of any license
agreement within 30 days after the execution and the delivery of the same and
(iii) Pledgor does not grant the licensee any security interest in any patent or
patent application with respect thereto; and
(b) Pledgee agrees to execute and deliver such instruments and
take such action as Pledgor may reasonably request in writing to assure that any
license rights granted by Pledgor are free and clear of any liens, encumbrances
or claims of any kind.
Section 7.5 Expenses.
(a) Pledgor shall not directly or indirectly incur a monthly
burn rate equal to $250,000, commencing with September, 2001 and continuing
during each month thereafter until the Obligations are satisfied, which shall
mean that sum of the excess of (i) Pledgor's expenditures for operations
(including, without limitation, compensation and other payroll expenses,
inventory, supplies and outside services, including accounting, legal and other
advisory fees and expenses) less (ii) the amount of Pledgor's revenues received,
in each case determined on a cash basis, shall not exceed the sum of $250,000
effective as of September 1, 2001.
(b) Pledgor shall curtail its expenditures for any
discretionary items, such as skyboxes for sporting events and similar items,
effective as of August 7, 2001.
23
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by facsimile
or (b) three days after mailing if mailed from within the continental United
States by registered or certified mail, return receipt requested to the party
entitled to receive the same, if to Pledgor, World Wireless Communications,
Inc.,5670 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with
a copy to Law Offices of ▇▇▇▇▇▇▇ ▇. Field, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. Field, Esq., and if to a Pledgee, at the
addresses shown on the books of Pledgor. Any party may change its address by
giving notice to the other party stating its new address. Commencing on the 10th
day after the giving of such notice, such newly designated address shall be such
party's address for the purpose of all notices or other communications required
or permitted to be given pursuant to this Agreement.
Section 8.2 Severability. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Agreement, and
this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
Section 8.3 Expenses. In the event of an Event of Default,
Pledgor will pay to Pledgee the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel, which Pledgee or the
Pledgee Representative may incur in connection with (i) the custody or
preservation of, or the sale, collection from, or other realization upon, any of
the Pledged Collateral, (ii) the exercise or enforcement of any of the rights of
Pledgee hereunder or (iii) the failure by Pledgor to perform or observe any of
the provisions hereof.
24
Section 8.4 Waivers, Amendments, Etc.. Pledgee's delay or
failure at any time or times hereafter to require strict performance by Pledgor
of any undertakings, agreements or covenants shall not waive, affect, or
diminish any right of Pledgee under this Agreement to demand strict compliance
and performance herewith. Any waiver by Pledgee of any Event of Default shall
not waive or affect any other Event of Default, whether such Event of Default is
prior or subsequent thereto and whether of the same or a different type. None of
the undertakings, agreements and covenants of Pledgor contained in this
Agreement, and no Event of Default, shall be deemed to have been waived by
Pledgee, nor may this Agreement be amended, changed or modified, unless such
waiver, amendment, change or modification is evidenced by an instrument in
writing specifying such waiver, amendment, change or modification and signed by
the Holders of at least 75% of the principal amount of the Notes then
outstanding.
Section 8.5 Continuing Security Interest. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i)
remain in full force and effect until payment in full of the Obligations or the
conversion of all of the Notes as provided therein, and (ii) be binding upon
Pledgor and its successors and (iii) inure to the benefit of Pledgee and its
successors and permitted assigns. Upon the payment or satisfaction in full of
the Obligations, or such conversion of the Notes, Pledgor shall be entitled to
the return, at its expense, of such of the Pledged Collateral as shall not have
been sold, returned in accordance with Section 5.2 hereof or otherwise applied
pursuant to the terms hereof.
Section 8.6 Applicable Law; Jurisdiction. This Agreement and
the rights of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of Utah, without regard to its conflicts
of law principles. Pledgee and Pledgor hereto (i) agree that any legal suit,
action or proceeding arising out of or relating to this Agreement shall be
instituted
25
only in a federal or state court in Salt Lake City, Utah or in the State of
Colorado, (ii) waive any objection which they may now or hereafter have to the
laying of the venue of any such suit, action or proceeding, and (iii)
irrevocably submit to the jurisdiction of any federal or state court in Salt
Lake City, Utah or in the State of Colorado, in any such suit, action or
proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement. Pledgee and
Pledgor hereto agree that the mailing of any process in any suit, action or
proceeding in accordance with the notice provisions of this Agreement shall
constitute personal service thereof.
Section 8.7 Entire Agreement. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof.
Section 8.8 Number and Gender. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
Section 8.9 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. In addition, this Agreement may
contain more than one counterpart of the signature page and this Agreement may
be executed by the affixing of such signature pages executed by the parties to
one copy of the Agreement; all of such counterpart signature pages shall be read
as though one, and they shall have the same force and effect as though all of
the signers had signed a single signature page.
26
Section 8.10 Rights to Participate in Board and Committee
Meetings. Commencing with the date of the Closing, Borrower shall give ▇▇▇▇▇ ▇.
▇▇▇▇▇ full visitation rights at all meetings of the Board of Directors of
Borrower and at all meetings of any committee thereof whether held in person or
by conference call. Pledgor agrees to provide ▇▇▇▇▇ ▇. ▇▇▇▇▇ with the same
notice and information that it gives to its directors in connection with any
such meeting.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WORLD WIRELESS COMMUNICATIONS, INC.
PLEDGOR
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
PLEDGEE:
Each Holder listed on Schedule 1
attached hereto as reflected in the
signature pages attached hereto
from time to time at the end of
such Schedule
27
IN WITNESS WHEREOF, the undersigned Pledgee has signed this
Agreement as of the date first above written.
PLEDGEE:
---------------------------------------
Signature of Individual Pledgee
---------------------------------------
Print Name of Individual
or, if applicable,
---------------------------------------
Name of Partnership, Corporation,
Trust or other Entity
By:
-----------------------------------
Authorized Person
---------------------------------------
Print Name of Signer
---------------------------------------
Title
---------------------------------------
STREET OR MAILING ADDRESS
---------------------------------------
CITY, STATE, ZIP CODE
28
EXHIBIT E
PLEDGEE REPRESENTATIVE AGREEMENT
This Agreement is entered into effective as of May 17, 2001 by and
among the parties set forth below (individually a "Noteholder," and collectively
the "Noteholders").
1. RECITALS. The Noteholders each hold a Promissory Note from World
Wireless Communications, Inc., a Nevada corporation (the"Borrower"), totaling
the original principal amount of at least $1,475,000 of even date herewith (the
"Notes"). Each Note is secured by a security interest in certain assets of the
Borrower pursuant to a Pledge/Security Agreement dated as of May 17, 2001 as
amended as of August 7, 2001 (the "Pledge Agreement"). The parties desire to
appoint and authorize one Noteholder to enforce their rights under the Notes
and/or the Pledge Agreement in accordance with the terms and conditions set
forth herein.
2. APPOINTMENT. ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Manager of Lancer Offshore, Inc., is
hereby appointed as the Noteholders' "Pledgee Representative," as defined and
identified in the Pledge Agreement. By execution and delivery of this Agreement,
each Noteholder appoints ▇▇▇▇▇▇▇ ▇▇▇▇▇, the President of Lancer Offshore, Inc.,
as its true and lawful attorney-in fact in connection with all matters relating
to the Notes and/or the Pledge Agreement. This appointment is coupled with an
interest and is irrevocable.
3. AUTHORITY. The Pledgee Representative shall have the following
powers and authority:
a. all rights, powers and authority as expressly set forth in the
Pledge Agreement;
b. the right to institute any action to enforce the Noteholders'
rights under the Pledge Agreement and/or the Notes, as the trustee of an express
trust for all of the Noteholders, individually and as the agent of the
Noteholders, or in such other capacity as Pledgee Representative may determine;
c. the right to negotiate and settle any disputed arising under or
relating to the Notes and/or Pledge Agreement, and the enforcement thereof, on
such terms and conditions as the Pledgee Representative deems proper; and
d. the right to negotiate, enter into and enforce the Noteholders'
rights under any Subordination Agreement in favor of the Noteholders with other
creditors of the Borrower.
4. OBLIGATIONS. Any amounts which the Pledgee Representative collects
on behalf of the Noteholders shall be distributed to each Noteholder in portion
to each Noteholder's interest in the principal outstanding under the Notes. The
Pledgee Representative shall distribute
all amounts collected under the Notes and/or the Pledge Agreement within five
business days of collecting such amounts.
5. EXPENSES; INDEMNIFICATION. Each Noteholder, severally but not
jointly, agrees to reimburse the Pledgee Representative for any expenses
incurred in enforcing the Noteholders' rights under the Notes and/or the Pledge
Agreement, including reasonably attorney fees, which reimbursements may be
offset against amounts distributable to the Noteholders. Each Noteholder,
severally but not jointly, agrees to indemnify and hold harmless the Pledgee
Representative from any and all actions taken under this Agreement, other than
any action attributable to the Pledgee Representative's bad faith, fraud or
gross negligence. Any indemnification obligation may be offset against the
amounts collected under the Note and/or the Pledge Agreement.
6. RESIGNATION OR REPLACEMENT OF THE PLEDGEE REPRESENTATIVE. The
Pledgee Representative may resign at any time by giving the Noteholders at least
20 days prior written notice of such resignation. The Noteholders may remove the
Pledgee Representative upon a vote of the holders of a majority of the principal
balance then owned under the Notes. A replacement Pledgee Representative shall
be appointed upon a vote of the holders of a majority of the principal balance
then owed under the Notes. The Pledgee Representative, its affiliates and
assigns, may vote on the same basis as all the other Noteholders in any such
vote. Upon such resignation or removal, the Pledgee Representative shall be
released and discharged from all further obligations and liabilities hereunder.
7. MISCELLANEOUS.
a. Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as duly given on (i) the date of delivery, if delivered in person,
by nationally recognized overnight delivery services or by facsimile or (ii)
three days after mailing if mailed from within the continental United States by
registered or certified mail, return receipt requested to the party entitled to
receive the same, if to the Borrower, World Wireless Communications, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to
Law Offices of ▇▇▇▇▇▇▇ ▇. Field, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attn.: ▇▇▇▇▇▇▇ ▇. Field, Esq.; and if to a Lender, at his or its address as set
forth in the books and records of the Lender. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
b. Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Colorado, without regard to its conflicts of law principals. All
parties hereto (i) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Denver, Colorado, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the
jurisdiction of any federal or state court in Denver, Colorado in any such
suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this
Agreement. All parties hereto agree that the mailing of any process in any suit,
action or proceeding in accordance with the notice provisions of this Agreement
shall constitute personal service thereof.
c. Entire Agreement; Waiver of Breach. This Agreement constitutes
the entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
d. Binding Effect; Assignability. This Agreement and all the terms
and provisions hereof shall be binding upon and shall inure to the benefit of
the parties and their respective heirs, successors and permitted assigns. This
Agreement and the rights of the parties hereunder shall not be assigned except
with the written consent of all parties hereto.
e. Captions. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
f. Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
g. Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
h. Amendments. This Agreement may not be amended except in a writing
signed by all of the parties hereto.
i. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the parties have read and executed this Agreement
affective as of the date first above written.
LANCER OFFSHORE, INC.
By: /s/ By:
-------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
LANCER PARTNERS L.P.
By: /s/ By:
-------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT 2
SUBORDINATION AGREEMENT
This Subordination Agreement (this "Agreement"), dated as of
_____________, _____ is made among World Wireless Communications, Inc., a Nevada
corporation ("Borrower"), Lancer Offshore, Inc. as the Pledgee and each party
hereto making a loan pursuant to the Loan Agreement between the Borrower and
Lancer Offshore, Inc. dated as of May 17, 2001, as amended (individually a
"Lender" and collectively the "Lenders") under the promissory note evidencing
the Senior Debt (as hereafter defined), and ___________________ ("Subordinated
Creditor"). The defined term "Lenders" shall include any successor or
replacement senior lender or lenders of the Borrower.
In order to induce Lenders to lend money to Borrower in such amounts,
for such periods and such terms as Lenders and Borrower may agree upon, as a
condition to such loans, and in consideration of any loan so made, Lenders,
Borrower, and Subordinated Creditor agree as follows:
1. As used herein, and unless otherwise defined herein, the following
terms shall have the following respective meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined) except as
the context shall otherwise require:
"Event of Default" shall mean an event which, with notice or
lapse of time or both, automatically accelerates the maturity of the
Senior Debt, or which permits either of the Lenders to accelerate the
maturity of the Senior Debt.
"Indefeasibly Paid in Full" or any similar term or phrase when
used in this Agreement with respect to Senior Debt shall mean the final
payment in full of all Senior Debt in cash.
"Insolvency Proceeding" shall mean (i) any assignment for the
benefit of creditors by Borrower or any other marshaling of the assets
and liabilities of Borrower; or (ii) the institution by or against
Borrower of any proceedings in insolvency, bankruptcy, receivership,
liquidation, arrangement, reorganization, dissolution, winding up or
other similar case or proceeding whether voluntary or involuntary.
"Senior Agreement" shall mean the Loan Agreement dated as of
May 17, 2001, as amended, between Borrower and Lancer Offshore, Inc.
dated as of May 17, 2001, as such agreement may be modified, amended,
supplemented, restated, replaced, exchanged or refinanced from time to
time in accordance with the terms thereof; in connection with any such
replacement or refinancing, "Senior Agreement" shall mean the
agreement(s)
1
evidencing the obligations to the successor or replacement senior
lender(s) thereunder and "Lenders" shall mean such successor or
replacement senior lender(s). The Senior Agreement shall be deemed to
be in effect hereunder for so long as Borrower has any obligation to
Lenders thereunder or Lenders have any unexpired commitment to Borrower
thereunder.
"Senior Debt" shall mean all indebtedness, obligations, and
liabilities of every nature of Borrower, including any subsidiary
guarantees for the benefit of Lenders (including any successor or
replacement senior lender), whether now existing or hereafter incurred,
direct, indirect, or acquired, absolute or contingent, secured or
unsecured, together with any extensions, renewals or modifications of
any thereof, and shall include, without limitation, all obligations and
liabilities of Borrower for the payment of principal, interest,
penalties, fees (including, without limitation, reasonable attorneys'
fees and disbursements and fees of in-house counsel) and other amounts
under or in respect of the Senior Agreement, including, without
limitation, interest payments arising after the initiation of any
Insolvency Proceeding whether or not such interest is an allowed claim
in any Insolvency Proceeding.
"Standstill Notice" shall mean a written notice given by the
either of the Lenders to Subordinated Creditor of the occurrence of an
Event of Default.
"Subordinated Debt" shall mean all indebtedness, obligations,
and liabilities of Borrower to Subordinated Creditor, whether now
existing or hereafter incurred, direct, indirect, or acquired, absolute
or contingent, secured or unsecured, together with all modifications,
amendments, extensions, renewals, and refundings thereof or of any part
of any thereof, and shall include, without limitation, the principal
amount of indebtedness under the Subordinated Note, any right to
interest from Borrower on account thereof, and any other charges and
claims provided for thereunder.
"Subordinated Note" shall mean the Promissory Note dated
____________, executed by Borrower in favor of Subordinated Creditor in
the original principal amount of $________________.
2. Subordinated Creditor represents and warrants to the Lenders that:
(i) as of the date of this Agreement, Borrower is indebted to Subordinated
Creditor under the Subordinated Note in the aggregate principal amount of
$________ and that there is no other Subordinated Debt currently outstanding
between Borrower and Subordinated Creditor; (ii) it has not, either singly or
collectively, sold, assigned, transferred or otherwise disposed of any right it
or they may have to repayment of the Subordinated Debt or any security thereof;
(iii) Subordinated Creditor is a duly organized ______________, formed and
existing under the laws of ___________, having full power and authority to own
its properties and to carry on its business as now conducted; (iv) Subordinated
Creditor has the requisite power and authority to enter into and perform its
obligations under this Agreement; (v) this Agreement has been duly executed
2
and delivered by Subordinated Creditor and is a valid, legal and binding
obligation of Subordinated Creditor, subject to principles of equity and rights
applicable to the rights of creditors generally, including bankruptcy laws; and
(vi) the officer or officers who have executed this Agreement on behalf of such
Subordinated Creditor are duly empowered and authorized to do so.
3. To the extent and in the manner set forth in this Agreement,
notwithstanding anything to the contrary contained in the Subordinated Note and
any related loan agreement, the Subordinated Debt and all rights and remedies of
Subordinated Creditor with respect thereto (including without limitation any
lien securing payment thereof) is, and shall continue to be, subject and
subordinate to the Senior Debt.
4. Borrower and Subordinated Creditor hereby covenant and agree as
follows:
(a) Borrower shall not make and Subordinated Creditor shall not
receive, directly or indirectly, any payment, advance, credit, security or new
or further evidence of any kind whatsoever on account of or with respect to the
Subordinated Debt or any part thereof; provided, however, that Subordinated
Creditor may receive from Borrower regularly scheduled installments of interest
under the Subordinated Note (but no prepayments) on the stated dates of payment
thereof so long as no Standstill Notice is then in effect.
(b) Upon the maturity of any Senior Debt, whether by lapse of
time, acceleration or otherwise, all amounts due or to become due in connection
therewith shall first be Indefeasibly Paid in Full before any direct or indirect
payment is made by or on behalf of Borrower or received by Subordinated Creditor
on account of any Subordinated Debt.
(c) Upon the occurrence of an Event of Default and during any
period that a Standstill Notice is in effect, no direct or indirect payment
shall be made on behalf of Borrower or received by Subordinated Creditor on
account of the Subordinated Debt. A Standstill Notice issued upon any payment
default or acceleration of the Senior Debt shall remain in effect until Lenders
receive Indefeasible Payment in Full, as provided in paragraph 4(b) above. The
Lenders will use commercially reasonable efforts to give Subordinated Creditor
written notice upon the waiver and/or cure of the Event(s) of Default that gave
rise to a Standstill Notice (without liability or penalty incurred by either of
the Lenders for any failure to give such notice). After the Subordinated
Creditor receives written notice of waiver and/or cure of the Event(s) of
Default from the Lenders, the Borrower shall be free to continue to make regular
interest payments to Subordinated Creditor as they come due, including those
payments that are in arrears.
(d) In the event that all or any portion of the Subordinated Debt
shall have been declared to be due and payable by Subordinated Creditor, such
declaration shall not be effective without both of the Lenders' written consent
until the earliest to occur of: (i) an Insolvency Proceeding; or (ii) the
default at scheduled maturity of, or the acceleration of the maturity of, any
Senior Debt.
3
(e) Subordinated Creditor may not commence suit or take any other
action to seek or enforce collection of any Subordinated Debt after the
Subordinated Creditor gives Lenders written notice that Subordinated Creditor
has declared the Subordinated Debt to be due and payable. Any and all proceeds
of or recoveries from enforcement proceedings by Subordinated Creditor shall be
subject to all the provisions of this Agreement, including, without limitation,
the provision of paragraph 9 hereof. The terms of this paragraph 4(e) are
subject to the limitations contained in paragraph 6 herein.
(f) Subordinated Creditor may not initiate or cooperate in the
commencement of any Insolvency Proceeding.
(g) Subordinated Creditor may not purchase, and shall not permit
any affiliate of Subordinated Creditor to purchase, any goods or services from
Borrower except for cash and without incurring trade debt.
(h) Subordinated Creditor may not exercise, and shall not permit
any affiliate of Subordinated Creditor to exercise, any right of offset against
Borrower, until after the withdrawal of the Standstill Notice, and then subject
to the requirements of paragraph 9 hereof.
(i) Subordinated Creditor shall immediately notify Lenders of any
default or breach of the Subordinated Debt.
(j) The provisions of paragraph 4 shall continue to be effective
until such time (if any) as the Senior Debt has been Indefeasibly Paid in Full.
5. Borrower and Subordinated Creditor agree as follows:
(a) Upon any distribution of assets of Borrower and its
subsidiaries to creditors of Borrower upon or in connection with an Insolvency
Proceeding, any payment or distribution of any kind (whether in cash, property,
or securities) which otherwise would be payable or deliverable upon or with
respect to the Subordinated Debt shall be paid or delivered directly to the
Lenders for application (in case of cash) to, or as collateral (in case of
non-cash property or securities) for, the payment or prepayment of the Senior
Debt until the Senior Debt has been Indefeasibly Paid in Full.
(b) If any Insolvency Proceeding is commenced by or against
Borrower, Lenders are hereby irrevocably authorized and empowered, but shall
have no obligation, to: (i) demand, ▇▇▇ for, collect and receive every payment
or distribution referred to in paragraph 5.1 above and give acquittance
therefor; and (ii) file claims and proofs of claim and take such other action
(including, without limitation, any voting rights in the Insolvency Proceeding
related to the Subordinated Debt and enforcing any security interest or other
lien securing payment of the Subordinated Debt) as it may deem necessary or
advisable for the exercise of any of the rights or interests of Lenders
hereunder.
4
(c) If any Insolvency Proceeding is commenced by or against
Borrower, Subordinated Creditor shall duly and promptly take such action as
Lenders may request to: (i) collect the Subordinated Debt for account of
Lenders, and file appropriate claims or proofs of claim in respect of the
Subordinated Debt; (ii) execute and deliver to Lenders such powers of attorney,
assignments or other instruments as Lenders may request in order to enable it to
enforce any and all claims with respect to the Subordinated Debt and any
security interests and other liens securing payment of the Subordinated Debt;
and (iii) collect and receive any and all payments and distributions which may
be payable or deliverable upon or with respect to the Subordinated Debt.
(d) If any Insolvency Proceeding is commenced by or against
Borrower or otherwise, Subordinated Creditor agrees not to: (i) contest, or join
in any proceeding contesting, the creation, existence, validity, priority or
perfection of any lien or security interest securing payment of the Senior Debt;
(ii) without the prior written consent of Lenders, assert any rights or claims
to adequate protection payments for the Subordinated Debt in any Insolvency
Proceeding; (iii) object to or contest, or join in any proceeding objecting to
or contesting, any "post petition financing" arrangement or agreement between
the Lenders and Borrower, including, without limitation, Borrower's use of "cash
collateral" in any Insolvency Proceeding; (iv) assert any position or claim that
is adverse to the interests of the Lenders in connection with any rights in or
payments under the Senior Debt; (v) waive any rights to make an election under
11 U.S.C. Section 1111(b); (vi) seek participation or membership in any
creditor's committee in any Insolvency Proceeding without the both of the
Lenders' prior written consent; or (vii) oppose, or join in any proceeding
opposing the sale or disposition of any property or collateral of the Borrower,
if the Lenders have both consented to such sale or disposition.
6. To the extent that Subordinated Creditor now has or hereafter
obtains a lien or security interest in any assets of Borrower:
(a) Such lien or security interest shall be at all times subject
and subordinate to any lien or security interest which Lenders now has or
hereafter obtains in such assets of Borrower without regard to the time or
manner in which the respective liens and security interests of the parties
hereto may have been created or perfected; and
(b) Except upon the written consent of the Lenders, Subordinated
Creditor may not at any time exercise any rights or remedies with respect to or
otherwise enforce any lien or security interest it now has or hereafter obtains
in Borrower's assets, or apply any assets covered by any such lien or security
interest to any claim now or hereafter existing against Borrower.
7. Borrower and Subordinated Creditor waive notice of acceptance of
this Agreement by Lenders, and Subordinated Creditor waives notice of and
consents to the making of: (i) any loans or other extensions of credit which
Lenders (or any successor or replacement senior lender(s)) may make to Borrower
from time to time; (ii) any renewal, replacement, refinancing or extension
thereof; and (iii) any action which Lenders (or any successor or
5
replacement senior lender(s)) may take or omit in its sole and absolute
discretion with respect thereto.
8. This Subordination Agreement shall constitute a continuing agreement
of subordination and Lenders (or any successor or replacement senior lender(s))
may, from time to time and without notice to Subordinated Creditor, lend money
to or make other financing arrangements with Borrower in reliance hereon.
9. In the event that any payment or distribution, or any security,
proceeds thereof or property or funds payable as adequate protection for use,
sale or lease of such security, is received by Subordinated Creditor (other than
those payments that Subordinated Creditor is entitled to receive pursuant to the
provisions of and under the conditions specified by paragraph 4(a) of this
Agreement), such property shall be received and held in trust for the benefit of
Lenders, shall be segregated from other funds and property held by Subordinated
Creditor, and shall be immediately paid over to Lenders in the form received
(together with any endorsements or documents as may be necessary to effectively
negotiate or transfer such property) for application (in case of cash) to, or as
collateral (in case of non-cash property or securities) for, the payment or
prepayment of the Senior Debt.
10. Subordinated Creditor authorizes Lenders (or any successor or
replacement senior lender(s)), without notice or demand and without affecting or
impairing Subordinated Creditor's obligations hereunder, from time to time to:
(i) renew, compromise, extend, increase, accelerate or otherwise change the time
for payment of, or otherwise change any of the other terms of the Senior Debt or
any part thereof, including, without limitation, to increase or decrease the
rate of interest thereon; (ii) take and hold security for the payment of the
Senior Debt and exchange, enforce, waive, release, and fail to perfect any such
security; (iii) apply such security and direct the order or manner of sale
thereof as Lenders (or any successor or replacement senior lender(s)) in its
sole discretion may determine; (iv) release and substitute any one or more
endorsers, warrantors, Borrower, or other obligor. Lenders may assign their
respective rights under this Agreement in whole or in part.
11. Subordinated Creditor acknowledges and agrees that it shall have
the sole responsibility for obtaining from Borrower such information concerning
Borrower's financial condition or business operations as Subordinated Creditor
may require, and that Lenders have no duty at any time to disclose to
Subordinated Creditor any information relating to the business, operations, or
financial condition of Borrower. Borrower acknowledges and agrees that
Subordinated Creditor and Lenders may freely share any information regarding
Borrower.
12. Subordinated Creditor shall deliver to Lenders a copy of the
executed Senior Subordinated Note which shall bear a conspicuous legend reading
substantially as follows:
"THIS PROMISSORY NOTE IS SUBORDINATED TO ANY PRESENT OR FUTURE
DEBT OWING FROM THE MAKER TO THE HOLDERS OF THE MAKER'S
PROMISSORY NOTE DATED MAY 17, 2001 IN THE ORIGINAL PRINCIPAL
6
AMOUNT OF AT LEAST $1,125,000 (THE "SENIOR NOTES") AND MAY BE
ENFORCED ONLY IN ACCORDANCE WITH THAT CERTAIN SUBORDINATION
AGREEMENT AMONG LANCER OFFSHORE, INC., AND WORLD WIRELESS
COMMUNICATIONS, INC. DATED AS OF MAY 17, 2001, AS AMENDED."
Such copy shall be certified in writing as being a true, current, and complete
copy of the original by a responsible officer of Subordinated Creditor. Any
replacement or substituted note shall bear the foregoing legend.
13. Lenders may notify any assignee, trustee or interest trustee in
bankruptcy, receiver, debtor in possession or other person or persons of their
rights under this Agreement.
14. Neither Subordinated Creditor nor Borrower shall amend, extend or
otherwise change the term of any Subordinated Debt without the consent of
Lenders if the effect of such amendment would be to: (i) increase the principal
amount of the Subordinated Debt; (ii) increase the rate of interest payable on
the Subordinated Debt; or (iii) change the maturity date of the Subordinated
Debt or accelerate the time for making any payment on the Subordinated Debt.
15. Any notice relating to this Agreement shall be in writing and shall
be personally served, sent by certified mail, return receipt requested, with
postage prepaid or sent by telecopy to the address of such party set forth on
the signature page of this Agreement. Such notice shall be deemed given and
received on the date so served, mailed or telecopied.
16. This Agreement is intended solely for the purpose of defining the
relative rights of the Lenders and the Subordinated Creditor. Nothing contained
in this Agreement is intended to or shall affect or impair: (i) as between
Borrower, its creditors (other than Lenders) and Subordinated Creditor, the
obligation of Borrower (which is absolute and unconditional) to pay the
Subordinated Debt in accordance with the terms thereof; and (ii) the relative
rights of Subordinated Creditor and creditors of Borrower other than Lenders.
17. Subordinated Creditor and Borrower agree to execute and deliver to
Lenders any additional agreements reasonably deemed necessary by Lenders to
effect or confirm the agreement set forth herein and to effect collection of any
payments which may be made at any time on account of the Subordinated Debt.
18. After the Senior Debt has been Indefeasibly Paid in Full, the
holders of Subordinated Debt shall be subrogated to the rights of holders of
Senior Debt to receive payments or distributions applicable to Senior Debt, to
the extent that distributions otherwise payable to the holders of Subordinated
Debt have been applied to the payment of Senior Debt. Subordinated Creditor
agrees that this Agreement shall not be affected by any action, or failure to
act, by Lenders which results or may result, in impairing or extinguishing any
right of reimbursement, subrogation or other right or remedy of Subordinated
Creditor.
7
19. This Agreement shall be governed by the laws of the State of
Colorado, determined without regard to conflicts of law principles, and the
parties hereto consent to the jurisdiction of the state and federal courts in
and for the State of Colorado in Denver, Colorado in connection with any dispute
arising under or relating to this Agreement. The provisions of this Agreement
are independent of and separable from each other. If any provision of this
Agreement shall for any reason be held by any court or other authority of
competent jurisdiction to be invalid or unenforceable, it is the intent of the
parties that such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision hereof, and that this Agreement shall
be construed as if such invalid or unenforceable provision had never been
contained herein.
20. This Agreement constitutes and expresses the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements, or conditions, whether express, implied, oral or written. This
Agreement shall extend to and be binding upon the successors, assigns, heirs and
legal representative of each of the parties hereto; provided, however, that
Subordinated Creditor may not assign, transfer, pledge, hypothecate, encumber,
or endorse the Subordinated Debt or any part or evidence thereof unless such
transaction is made expressly subject to the terms hereof.
21. In the event Subordinated Creditor or Borrower breaches any of
their obligations hereunder to Lenders, the Lenders shall be entitled to recover
their damages, costs and reasonable attorney fees which result from such breach.
22. Neither this Agreement nor any portion or provisions hereof may be
changed, waived, or amended or in any manner other than by an agreement in
writing signed by the parties to this Agreement. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing any such
counterparts.
23. Borrower agrees to use commercially reasonable efforts to give
Subordinated Creditor copies of any written notice of an Event of Default that
Lenders may provide to Borrower under the Senior Agreement.
24. Subordinated Creditor and any assignee of Lenders, successor or
replacement lender shall reaffirm or reconfirm the provisions of this Agreement
and acknowledge the substitution of parties in writing.
25. Whenever Lenders' consent is required hereunder, such consent may
be given or withheld in the sole and absolute direction of Lender, unless
otherwise noted herein.
8
26. To the extent that Lenders have any liability hereunder, such
liability shall be several and not joint. Any payments to the Lenders hereunder
shall be divided between the Lenders in proportion to their respective amounts
of the Senior Debt or on such other basis as the Lenders may mutually agree in
writing.
IN WITNESS WHEREOF, the parties have read and executed this Agreement
is executed as of the date stated at the top of the first page.
LANCER OFFSHORE, INC. WORLD WIRELESS
COMMUNICATIONS, INC.
By: By:
---------------------------- ---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address where notices are to be sent:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address where notices are to be sent: Address where notices are to be sent:
------------------------------------
------------------------------------
------------------------------------
-------------------------------
[Subordinated Creditor]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address where notices to are to be sent:
-------------------------------
-------------------------------
-------------------------------
9
EXHIBIT D
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
OF
WORLD WIRELESS COMMUNICATIONS, INC.
Agreement made as of the 17th day of May, 2001, as amended as
of August 7, 2001, effective as of May 17, 2001, by and among World Wireless
Communications, Inc., a Nevada corporation currently having its office and
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ Village, Colorado 80111 (the "Corporation"), and each party hereto
making a loan to the Corporation pursuant to the Memorandum (as defined below)
(each of the last named persons shall hereinafter be referred to individually as
a "Noteholder" and collectively as the Noteholders").
WHEREAS, upon the closing of the offering of up to $5,000,000
principal amount of Senior Secured Notes of the Company (the "Notes") and the
Warrants (as defined below) pursuant to the Confidential Private Placement
Memorandum dated May 17, 2001, as amended (the "Offering") (the "Effective
Date"), as defined in the Offering, the Noteholder will (i) own warrants to
purchase a minimum of 562,500, and a maximum of 2,500,000, shares of common
stock, $.001 par value per share, of the Corporation at an exercise price of
$0.30 per share exercisable during a period of five years from the date of the
Effective Date (the "Warrants") and (ii) have
1
the right to receive a minimum of 5,625,000, and a maximum of 25,000,000, shares
of common stock, $.001 par value per share, of the Corporation pursuant to the
mandatory conversion of such stock (shares of such common stock acquired
pursuant to the Offering, together with shares of common subsequently acquired
by the Noteholder pursuant to the Offering, being referred to as the "Shares"
and collectively as the "Stock");
WHEREAS, upon the Effective Date, the Corporation and the
Noteholder desire to provide for certain registration rights for the Stock of
the Corporation or any interest therein now or hereafter acquired by the
Noteholder pursuant to the Offering;
NOW, THEREFORE, effective upon the Effective Date, in
consideration of the mutual covenants and conditions herein contained, each of
the parties hereby agrees as follows:
1. Piggyback Registration Rights.
1.1 (a) If the Corporation shall propose to file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), at any time during the 24-month period after the Effective
Date, either on its own behalf or that of any of its shareholders for an
offering of shares of the capital stock of the Corporation (including shares to
be issued pursuant to the exercise of any warrants, including the Warrants) for
cash or securities, the Corporation shall give written notice
2
as promptly as possible of such proposed registration to the Noteholder and
shall use reasonable efforts to include all of the shares of the Stock owned by
the Noteholder (including shares to be issued pursuant to the exercise of any
warrants, including the Warrants, or upon the mandatory conversion of the Notes
into such Shares) (the "Seller" or "Registering Noteholder") in such
registration statement as such Seller shall request within 10 days after receipt
of such notice from the Corporation, provided, that (A) the Seller furnishes the
Company with a written notice of its irrevocable exercise of the Warrants in
whole or in part within 10 days after the receipt of such notice from the
Corporation, (B) if shares of the Stock are being offered by the Corporation in
an underwritten offering, any shares of the Stock proposed to be included in the
registration statement on behalf of the Seller shall be included in the
underwriting offering on the same terms and conditions as the Stock being
offered by the Corporation, and (C) the Seller shall be entitled to include such
number of shares of the Stock owned by the Seller in such registration
statement, one time only during the applicable period set forth herein (except
that the Seller shall have the right not to exercise such piggyback registration
right set forth herein once, in which case the Seller shall have the right set
forth in this Section 1.1 with respect to the next succeeding registration
statement described in this Section 1.1 proposed to be filed by the Corporation
during such 24-month period); and provided further, that (i) the
3
Corporation shall not be required to include such number or amount of shares
owned by the Seller in any such registration statement if it relates solely to
securities of the Corporation to be issued pursuant to a stock option or other
employee benefit plan, (ii) the Corporation may, as to an offering of securities
of the Corporation by the Corporation, withdraw such registration statement at
its sole discretion and without the consent of the Seller and abandon such
proposed offering and (iii) the Corporation shall not be required to include
such number of shares of the Stock owned by the Seller in such registration
statement if the Corporation is advised in writing by its underwriter or
investment banking firm that it reasonably believes that the inclusion of the
Seller's shares would have an adverse effect on the offering.
(b) A registration filed pursuant to this Section
1.1(a) shall not be deemed to have been effected unless the registration
statement related thereto (i) has become effective under the Securities Act and
(ii) has remained effective for a period of at least nine months (or such
shorter period of time in which all of the Stock registered thereunder has
actually been sold thereunder); provided, however, that if, after any
registration
4
statement filed pursuant to Section 1.1(a) becomes effective and prior to the
time the registration statement has been effective for a period of at least nine
months, such registration statement is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court solely due to actions or omissions to act of the Corporation,
such registration statement shall not be considered one of the registrations
applicable pursuant to Section 1.1(a).
1.2 Delay or Suspension of Registration. Notwithstanding any
other provision of this Section 1 to the contrary, if the Corporation shall
furnish to the Noteholder:
(a) a certificate signed by the President of the
Corporation stating that, in the good faith judgment of a majority of the
members of the entire Board of Directors of the Corporation, it would adversely
and materially affect the Corporation's ability to enter into an agreement with
respect to, or to consummate, a bona fide material transaction to which it is or
would be a party, or the Corporation has a plan to register stock to be sold for
its own account within a 90-day period after the filing of the registration
statement under Section 1.1(a), for the Corporation to use its reasonable best
efforts to effect the registration of the Stock; or
5
(b) both (A) a certificate signed by the President of
the Corporation stating that, in the good faith judgment of a majority of the
members of the entire Board of Directors of the Corporation, a material fact
exists which the Corporation has a bona fide business purpose for preserving as
confidential and (B) an opinion of counsel to the Corporation to the effect that
the registration by the Corporation or the offer or sale by the Noteholder of
the Stock pursuant to an effective registration statement would require
disclosure of the material fact which is referenced in the President's
certificate required under Section 1.2(b)(ii)(A) and which, in such counsel's
opinion, is not otherwise required to be disclosed,
then the Corporation's obligations pursuant to Section 1.2(a) with respect to
any such demand for registration shall be deferred or offers and sales of the
Stock by the Noteholder shall be suspended, as the case may be, until the
earliest of: (1) the date on which, as applicable (a) the Corporation's use of
reasonable best efforts to effect the registration of the Stock would no longer
have such a material adverse effect or (b) the material fact is disclosed to the
public or ceases to be material; (2) 135 days from the date of receipt by the
Noteholder of the materials referred to in Section 1.2(b) (i) and (ii) above;
and (3) such time as the Corporation notifies the Noteholder that it has resumed
use of its reasonable best efforts to effect registration of the Stock or that
offers and sales of the Stock pursuant to an effective registration statement
may be resumed, as the case may be. If the Noteholder receives the materials
referred to in
6
Section 1.2(b)(ii) above while a registration statement for the offer and sale
of the Stock is in effect, the Noteholder agree to terminate immediately any
offer or sale of the Stock. A particular material transaction to which the
Corporation is or would be a party or a particular material fact shall not give
rise to more than one deferral or suspension notice by the Corporation pursuant
to the provisions of this Section 1.2.
1.3 In connection with any registration or qualification
pursuant to the provisions of this Section 1, the Corporation shall, except as
prohibited under the blue sky or securities laws of any jurisdiction under which
a registration or qualification is being effected, pay all filing, registration
and qualification fees of the Securities and Exchange Commission, printing
expenses, fees and disbursements of legal counsel and all accounting expenses,
except that the Seller shall bear the fees and expenses of its own legal
counsel, and the underwriting or brokerage discounts and commissions, expenses
of its brokers or underwriters and fees of the National Association of
Securities Dealers, Inc. attributable to its Stock; provided, however, that the
Corporation shall not be required in the case of any registration hereunder to
make blue sky filings in more than 15 states.
1.4 (a) In each case of registration of shares of Stock under
the Securities Act pursuant to these registration provisions, the Corporation
shall unconditionally indemnify and hold harmless the Seller, each underwriter
(as defined
7
in the Securities Act), and each person who controls any such underwriter within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934 (the Seller and each such underwriter, and each
such person who controls any such underwriter being referred to for purposes of
this Section 1.4, as an "Indemnified Person") from and against any and all
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any registration statement under which such shares of the Stock were registered
under the Securities Act, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto (including, in each case, any
documents incorporated by reference therein), or arising out of any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to the Seller or any underwriter and furnished to the
Corporation or the Noteholder, as the case may be, in writing by the Seller or
such underwriter expressly for use therein; provided that the foregoing
indemnification with respect to a preliminary prospectus shall not inure to the
benefit of any underwriter (or to the benefit of any person controlling such
underwriter) from whom the person asserting
8
any such losses, claims, damages, liabilities or expenses purchased shares of
the Stock to the extent such losses, claims, damages or liabilities result from
the fact that a copy of the final prospectus had not been sent or given to such
person at or prior to written confirmation of the sale of such shares to such
person.
(b) In each case of a registration of shares of the Stock
under the Securities Act pursuant to these registration provisions, the Seller
participating in the registration shall unconditionally indemnify and hold
harmless the Corporation (and its directors and officers), each underwriter and
each person, if any, who controls the Corporation or such underwriter within the
meaning of Section 15 of the Securities Act of Section 20(a) of the Securities
Exchange Act of 1934, to the same extent as the foregoing indemnity from the
Corporation to the Seller but only with reference to information relating to the
Seller and furnished to the Corporation by the Seller for use in the
registration statement, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto. The Seller will use all
reasonable efforts to cause any underwriters of shares of Stock to be sold by
the Seller to indemnify the Corporation on the same terms as the Seller agrees
to indemnify the Corporation, but only with reference to information furnished
in writing by such underwriter for use in the registration statement.
9
(c) In case any action or proceeding shall be brought against
or instituted which involves any Indemnified Person, such Indemnified Person
shall promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing and the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such action or proceeding, any Indemnified Person shall
have the right to obtain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person has agreed to the retention of such counsel at its expense
or (ii) the named parties to any such action or proceeding include both the
Indemnifying Person and the Indemnified Person, and the Indemnified Person has
been advised by counsel that there may be one or more defenses available to such
Indemnified Person which are different from or additional to those available to
the Indemnifying Person (in which case, if the Indemnified Person notifies the
Indemnifying Person that it wishes to employ separate counsel at the expense of
the Indemnifying Person, the Indemnifying Person shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnified
Person). It is understood that the Indemnifying Person shall not be liable for
the fees and expenses of more than one separate firm of attorneys at any time
for all such
10
similarly situated Indemnified Persons. The Indemnifying Person shall not be
liable for any settlement of any action or proceeding effected without its
written consent.
(d) In the event the indemnifications provided for in this
Section 1.4 are unavailable or insufficient, then the Seller shall pay the
amount paid or payable as a result of such losses, claims, damages, liabilities,
actions and expenses.
(e) Notwithstanding anything in this Section 1.4 to the
contrary, the Corporation shall not be liable to the Seller for any losses,
claims, damages or liabilities arising out of or caused by (A) any reasonable
delay (1) in filing or processing any registration statement or any preliminary
or final prospectus, amendment or supplement thereto after the inclusion of the
Seller's Stock in such registration statement, or (2) in requesting such
registration statement be declared effective by the Commission and (B) the
failure of the Commission for any reason to declare effective any registration
statement.
2. MISCELLANEOUS.
2.1 Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as duly given on (a) the date of delivery, if delivered in person,
by nationally recognized overnight delivery service or by facsimile or (b) three
days after mailing if mailed from within the continental United States by
registered or certified
11
mail, return receipt requested to the party entitled to receive the same, if to
the Corporation, World Wireless Communications, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Law
Offices of ▇▇▇▇▇▇▇ ▇. Field, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇▇▇ ▇. Field, Esq.; and if to the Noteholder, at his or its address as set
forth in the books and records of the Corporation. Any party may change his or
its address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
2.2 Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Colorado, without regard to its conflicts of law principles. All
parties hereto (i) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Denver, Colorado, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in Denver, Colorado in any such suit, action or
12
proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement. All parties
hereto agree that the mailing of any process in any suit, action or proceeding
in accordance with the notice provisions of this Agreement shall constitute
personal service thereof.
2.3 Entire Agreement; Waiver of Breach. This Agreement
constitutes the entire agreement among the parties and supersedes any prior
agreement or understanding among them with respect to the subject matter hereof,
and it may not be modified or amended in any manner other than as provided
herein; and no waiver of any breach or condition of this Agreement shall be
deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of any subsequent breach or condition of a like or different nature.
2.4 Binding Effect; Assignability. This Agreement and all the
terms and provisions hereof shall be binding upon and shall inure to the benefit
of the parties and their respective heirs, successors and permitted assigns.
This Agreement and the rights of the parties hereunder shall not be assigned
except with the written consent of all parties hereto.
2.5 Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
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2.6 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
2.7 Severability. If any provision of this Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
2.8 Amendments. This Agreement may not be amended except in a
writing signed by all of the parties hereto.
2.9 Compliance with Securities Laws. Commencing with the
Effective Date, the Corporation will use its best efforts to comply thereafter
with the applicable provisions of the Securities Act and the Securities Exchange
Act of 1934.
2.10 Restrictions on Resale. Notwithstanding anything
contained herein to the contrary, the Seller agrees that, after the registration
statement described in Section 1.1(a) becomes effective, the Seller will not
sell, transfer, pledge or otherwise dispose of more than 15% of the total number
of shares of Common Stock
14
acquired pursuant to the Offering in any one calendar month, commencing with the
month in which such registration statement becomes effective.
2.11 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first above written.
WORLD WIRELESS COMMUNICATIONS, INC.
BY: /s/
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
LANCER OFFSHORE, INC.
BY: /s/
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LANCER PARTNERS L.P.
BY: LANCER MANAGEMENT GROUP LLC,
GENERAL PARTNER
BY: /s/
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▇▇▇▇▇▇▇ ▇▇▇▇▇
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