EX-4.10 SUBORDINATED, CONVERTIBLE NOTE AND WARRANTS AGREEMENT
5G WIRELESS COMMUNICATIONS, INC.
FORM OF
SUBORDINATED, CONVERTIBLE NOTE AND WARRANTS AGREEMENT
THIS NOTE AND WARRANTS AGREEMENT (this "Agreement"), dated
___________, is entered into by and among 5G Wireless Communications,
Inc., a Nevada corporation (the "Company"), and
________________________________ ("Purchaser")
WHEREAS, Purchaser has lent the Company, an aggregate amount of
____________ Dollars ($__________).
WHEREAS, the Company desires to issue a convertible promissory
note (the "Note") to Purchaser. The Note is subordinated to the
Company's Senior Indebtedness (as defined herein) and may, in lieu of
repayment, be converted into equity in the Company.
WHEREAS, the Company wishes to grant Purchaser warrants (the
"Warrants") entitling him to purchase of _______________ Dollars
($__________) of the Company's common stock, par value $0.001 ("Common
Stock") or capital stock sold in an Equity Financing (as defined
below), at the Exercise Price described herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements as set forth herein and for good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
Definitions. For purposes of this Agreement, capitalized terms
not otherwise defined in this Agreement shall have the following
meanings:
"Change of Control" shall mean the sale, conveyance or other
disposition of all or substantially all of the Company's property,
voting stock or business or the Company's merger with or into or
consolidation with any other corporation, limited liability company or
other entity (other than a wholly owned subsidiary of the Company),
provided that the term "Change of Control" shall not include (a) a
merger of the Company effected exclusively for the purpose of changing
the domicile of the Company, (b) an equity financing in which the
Company is the surviving corporation, (c) a transaction in which the
stockholders of the Company immediately prior to the transaction own
fifty percent (50%) or more of the voting power of the surviving
corporation following the transaction.
"Demand Date" means October 8, 2004.
"Equity Financing" means the Company conducts a sale of capital
stock with aggregate gross proceeds received, or to be received, by
the Company of at least Two Million Five Hundred Thousand Dollars
($2,500,000).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time
to time.
"Lien" means, with respect to any asset, any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind in respect
of such asset.
"Material Adverse Effect" means any change, violation,
inaccuracy, circumstance or effect that is materially adverse to the
business, properties, assets (including intangible assets),
liabilities, capitalization or financial condition of the Company and
its Subsidiaries, taken as a whole; provided, however, that the
following shall not be taken into account in determining whether there
has been a Material Adverse Effect: (i) any occurrences relating to
the economy of the United States in general and (ii) changes in
trading prices for the Company's securities or for securities in general.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any
agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"SEC Documents" means the Company's periodic reports filed with
the Securities and Exchange Commission (the "SEC").
"Subsidiary" (or plural, "Subsidiaries") means a Person, whether
incorporated or unincorporated, of which (i) more than fifty percent
(50%) of the securities or other ownership interests, or
(ii) securities or other interests having by their terms ordinary
voting power to elect more than fifty percent (50%) of the board of
directors or others performing similar functions with respect to such
corporation or other organization, is directly owned or controlled by
such Person or by any one or more of its Subsidiaries.
2. Subordinated, Convertible Note and Warrant.
2.1 Subordinated, Convertible Note. The Company shall issue to
Purchaser the Note, substantially in the form attached hereto as
Exhibit A, for the principal amount of ______________ Dollars
($___________). The Note will include the following terms:
(a) the Note shall bear eight percent (8%) interest per annum;
(b) prior to the Demand Date there is a Change of Control,
the outstanding principal amount of the Note plus any accrued but
unpaid interest automatically will convert into shares of Common Stock
effective immediately prior to the Change of Control;
(c) if prior to the Demand Date the Company closes an
Equity Financing, Purchaser shall convert the outstanding principal
amount of the Note plus any accrued but unpaid interest into shares of
capital stock sold in the Equity Financing;
(d) Purchaser may convert the outstanding principal amount
of the Note plus any accrued but unpaid interest into shares of Common
Stock (at the applicable Conversion Price set forth below) voluntarily
at any time;
(e) the Company shall make no principal or interest
payments to Purchaser unless: (i) Purchaser demands payment of the
Note following the Demand Date, or (ii) the Company elects to prepay
the Note;
(f) at anytime following the Demand Date, Purchaser may
demand all of the outstanding principal balance and any accrued and
unpaid interest be due and payable; and
(g) the conversion price shall be (i) for the capital stock
sold in an Equity Financing, the price per share paid by third party
investors at the initial closing of the Equity Financing, or (ii) for
any conversion into Common Stock, the lesser of: (y) the average
closing price of the Common Stock as listed on the OTC Bulletin Board
over the thirty (30) trading days immediately prior to the Closing
Date ($0.____ per share as of _____________), or (z) the average
closing price of the Common Stock as listed on the OTC Bulletin Board
over the thirty (30) trading days immediately prior to the date of a
Change of Control or the date of Purchaser's voluntary exercise of the
Note (as applicable) (respectively, as applicable, the "Conversion
Price"). For the purposes of this section, as may be applicable, the
closing price of the Common Stock shall be the closing price as
reported by the OTC Bulletin Board, the NASDAQ National Stock Market
or other national stock exchange then carrying the listing of the
Company's Common Stock
2.2 Warrants. The Company shall grant a warrant (the
"Warrant"), substantially in the form attached hereto as Exhibit B, to
Purchaser entitling the holder to purchase forty percent (40%) of the
amount invested in the Notes (_______________ Dollars ($______) in
this case) worth of Company capital stock. The "Exercise Price" of
the Warrant shall be equal to the applicable Conversion Price defined above.
2.3 Closing. The consummation of this transaction (the
"Closing") shall take place at the offices of the Company, ▇▇▇▇ ▇▇▇
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such other time and place as the Company and Purchaser mutually agree
in writing. The date on which the Closing takes place is referred to
as the "Closing Date." At the Closing, the Company shall deliver to
Purchaser a duly executed Note and a duly executed Warrant, with each
to be registered in the name of Purchaser.
3. Actions with Respect to Proposed Equity Financing and Bridge
Financing.
3.1 Equity Financing. In the event the Company closes an Equity
Financing prior to the Demand Date and prior to the closing of a
Bridge Financing as defined below, Purchaser shall convert the Note
into, and the Warrant shall be exercisable solely for, shares of
capital stock sold in the Equity Financing. Upon such conversion of
the Note and upon any exercise of the Warrant, Purchaser shall have
the same rights and privileges as those investors participating in the
Equity Financing and shall become a party to any ancillary agreements
executed in connection with the Equity Financing, including, but not
limited to, a registration rights agreement.
3.2 Bridge Financing. The Company is currently negotiating a
bridge financing with certain outside investors (the "Outside
Investors") in which the Company anticipates issuing convertible
promissory notes (the "Bridge Notes") and warrants to purchase Common
Stock (the "Bridge Warrants") in exchange for from $400,000 to
$1,500,000 of new investment (the "Bridge Financing"). It is
anticipated that this Note and Warrants purchased hereunder will
become part of the Bridge Financing (if there is a closing of such
Bridge Financing). In the Event the Bridge Notes or the Bridge
Warrants are issued with terms more favorable to the Outside Investors
(as determined by Purchaser in its sole discretion) than those terms
contained in the Note or the Warrant, as the case may be, the Company
and Purchaser agree that the Note or the Warrant, as the case may be,
automatically shall be amended to reflect and include all the terms of
the Bridge Notes or the Bridge Warrants, as the case may be and that
the investment made hereby shall be deemed part of the Bridge
Financing on all the terms of such Bridge Financing. The Company and
Purchaser immediately shall cancel the Note or the Warrant and reissue
corresponding Bridge Notes and Bridge Warrants (though without any
reduction in the applicable warrant coverage percentage) and the
Company and Purchaser shall execute such further documents as
necessary to make Purchaser fully a party to the Bridge Financing. The
amendment shall also provide that Purchaser will have a continuing
right to participate in all future full or partial restructurings or
modifications or amendments to the Bridge Note and Bridge Warrants.
Purchaser hereby further acknowledges that though it is anticipated
that this investment will convert into the Bridge Financing, Purchaser
is making the investment today without regard to the minimum amount of
investment stated in the proposed Bridge Financing and the Company has
full access and authority to use for general corporate purposes the
amounts invested hereunder.
4. Representations, Warranties and Agreements of the Company.
The Company hereby represents and warrants to, and agrees with,
Purchaser that, except as otherwise disclosed in the SEC Documents,
the following representations and warranties in their entirety:
4.1 Organization and Qualification. The Company is duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Nevada. The Company has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as currently conducted. The Company is
qualified as a foreign corporation and is in good standing in all
states where the conduct of its business or its ownership or leasing
of property requires such qualification, except where the failure to
be so qualified would not have a Material Adverse Effect on the Company.
4.2 Authorization. All corporate action on the part of the
Company necessary for the authorization, execution and delivery of
this Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance and delivery
of the Note and Warrants has been taken or will be taken on or prior
to the Closing. This Agreement constitutes a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the enforcement of creditors' rights
generally, (b) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies,
and (c) to the extent the indemnification provisions contained in this
Agreement may be limited by applicable federal or state securities laws.
4.3 Valid Issuance. The Note, the Warrants and the shares of
Common Stock issuable upon conversion of the Note and exercise of the
Warrants (collectively, the "Securities") have been duly authorized
and, when issued, sold and delivered to Purchaser after payment
therefore in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable, and, assuming the accuracy of the
representations and warranties of Purchaser set forth at Section 4.6
of this Agreement, will be issued in compliance with all applicable
federal and state securities laws and will be free of all Liens or
other encumbrances other than as set forth in the legends contained in
Section 4.8 of this Agreement.
4.4 No Material Adverse Change. Except as set forth in the
Company's SEC Documents and since the last such filing (a) there has
been no material adverse change in the business, properties, results
of operations or financial condition of the Company, whether or not
arising in the ordinary course of business, and (b) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
4.5 Access to Information. Prior to the Closing, the Company
will provide to Purchaser and his professional representatives such
information as such persons from time to time may reasonably request
with respect to the Company and prior to the Closing shall permit
Purchaser and his professional representatives reasonable access,
during regular business hours and upon reasonable notice, to the
properties, books and records of the Company as Purchaser from time to
time may reasonably request.
4.6 Private Offering
Neither the Company nor any authorized Person acting on its behalf
has, in connection with the offer, sale, exchange or issuance of the
Securities, engaged in (i) any form of general solicitation or general
advertising (as those terms are used within the meaning of Rule 502(c)
under the Securities Act), (ii) any action involving a public offering
within the meaning of Section 4(2) of the Securities Act, or (iii) any
action that would require the registration under the Securities Act of
the offering, sale, exchange or issuance of the Securities pursuant to
this Agreement or that would violate applicable state securities or
"blue sky" laws. The Company has not made and will not prior to the
Closing Date make, directly or indirectly, any offer or sale of the
Securities, or of securities of the same or similar class as the
Securities if, as a result, the offer and sale contemplated hereby
would fail to be entitled to exemption from the registration
requirements of the Securities Act. As used herein, the terms "offer"
and "sale" have the meanings specified in Section 2(3) of the
Securities Act.
5. Purchaser hereby represents and warrants to the Company that:
5.1 Purchase Entirely for Own Account. The Securities to be
purchased by Purchaser will be acquired for investment for Purchaser's
own account, and not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and Purchaser has no
present intention of selling, granting any participation in, or
otherwise distributing the same. Purchaser is not a party to any
contract, undertaking, agreement or arrangement with any person to
sell, transfer or otherwise dispose of any of the Securities purchased
by him.
5.2 Reliance Upon Purchaser's Representations. Purchaser
understands that the issuance and sale of the Securities will not be
registered under the Securities Act on the ground that such issuance
and sale will be exempt from registration under the Securities Act
pursuant to Rule 506 of Regulation D and/or Section 4(2) thereof, and
that the Company's reliance on such exemption is based on each
Purchaser's representations set forth herein. Purchaser realizes that
the basis for the exemption may not be present if, notwithstanding
such representations, any Purchaser has in mind merely acquiring the
securities for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. Such Purchaser
has no such present intention.
5.3 Receipt of Information. Purchaser has had an opportunity to
ask questions and receive answers from the Company regarding the terms
and conditions of the issuance and sale of the Securities and the
business, properties, prospects and financial condition of the Company
and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information
furnished to it or to which it had access. The foregoing, however,
does not limit or modify the representations and warranties of the
Company in Section 40 of this Agreement or the right of Purchaser to
rely thereon. No person other that the Company has been authorized to
give any information or to give any representation not contained in
this Agreement in connection with the Offering and, if given or made,
such information or representation must not be relied upon as having
been authorized by the Company.
5.4 Investment Experience. Purchaser is experienced in
evaluating and investing in securities of companies and acknowledges
that it is able to fend for itself, can bear the economic risk of its
investment, and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks
of the investment in the Securities.
5.5 Accredited Investor. Purchaser is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act.
5.6 Restricted Securities. Purchaser understands that the
Securities may not be sold, transferred or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration
statement covering the Securities or an available exemption from
registration under the Securities Act, the Securities must be held
indefinitely. In particular, Purchaser is aware that the Securities
may not be sold pursuant to Rule 144 promulgated under the Securities
Act unless all of the conditions of that Rule are met. Among the
conditions for use of Rule 144 is the availability of current
information to the public about the Company.
6. Restricted Transferability.
6.1 Legends. Each certificate or other document evidencing the
Securities shall be endorsed with the legends set forth below, and
Purchaser covenants that, except to the extent such restrictions are
waived by the Company, Purchaser shall not transfer the shares
represented by any such certificate without complying with the
restrictions on transfer described in the legends endorsed on such
certificate:
(a) The following legend under the Act:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN
STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR
ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL OF 5G WIRELESS COMMUNICATIONS INC.,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE
LAW IS AVAILABLE."
(b) Such other legends as may be required under state
securities laws.
6.2 Indemnification
(a) The Company agrees to indemnify and hold Purchaser
harmless from and against any losses, claims, damages or liabilities
to which Purchaser may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based
upon (i) a material breach of any term of this Agreement, the Note and
the Warrants, or (ii) the material breach of any representation,
warranty or covenant of this Agreement, the Note and the Warrants.
The Company will reimburse Purchaser for any reasonable legal or other
expenses reasonably incurred in investigating, defending or preparing
to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based
upon the breach by Purchaser to comply with his representations,
warranties, covenants and agreements contained in this Agreement.
(b) Purchaser agrees to indemnify and hold the Company
harmless from and against any losses, claims, damages or liabilities
to which the Company may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based
upon a material breach of any representation, warranty or covenant of
this Agreement, the Note and the Warrants. Purchaser will reimburse
the Company for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that Purchaser shall
not be liable in any such case to the extent that such loss, claim,
damage or liability arises out of, or is based upon the breach by the
Company to comply with its representations, warranties, covenants and
agreements contained in this Agreement.
7. Miscellaneous.
7.1 Reasonable Efforts; Other Actions. Subject to the terms and
conditions herein provided and applicable law, the Company and
Purchaser shall use all commercially reasonable efforts promptly to
take, or cause to be taken, all other actions and do, or cause to be
done, all other things necessary, proper or appropriate under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
7.2 Interpretation tc "9.2 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ ▇ . ▇▇▇▇ a
reference is made in this Agreement to Exhibits, such reference shall
be to an Exhibit to this Agreement unless otherwise indicated. The
words "include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without limitation."
In this Agreement, any reference to any event, change, condition or
effect being "material" with respect to any entity or group of
entities means any material event, change, condition or effect related
to the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations or
results of operations of such entity or group of entities. The phrase
"made available" in this Agreement shall mean that the information
referred to has been made available if requested by the party to whom
such information is to be made available. The phrases "the date of
this Agreement", "the date hereof", and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to
_____________. The headings and subheadings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Any reference in
this Agreement to a statutory provision or rule or regulation
promulgated thereunder shall be deemed to include any similar
successor statutory provision or rule or regulation promulgated
thereunder.
7.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement. Neither the Company nor Purchaser shall assign this
Agreement or any rights hereunder or delegate any duties hereunder
without the prior written consent of the other except as otherwise
provided herein.
7.4 Notices. Unless otherwise provided, any notice, request,
demand or other communication required or permitted under this
Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified, or when sent
by Facsimile (with receipt confirmed and promptly confirmed by
personal delivery, U.S. first class mail, or courier), or overnight
courier service, or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed as
follows (or at such other address as a party may designate by notice
to the other):
If to the Company:
5G Wireless Communications, Inc.
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Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Pillsbury Winthrop LLP
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Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
See the address provided by Purchaser on the counter-part signature page.
7.5 Survival. All representations and warranties contained or
provided for herein shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
party benefiting from any such representation or warranty, and shall
survive the Closing to the extent of applicable statutes of limitations.
7.6 Amendments and Waivers. This Agreement may be amended or
modified only by a written instrument signed by the Company and
Purchaser hereunder. The observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the
party against whom such waiver is sought to be enforced. No waiver by
either party of any default with respect to any provision, condition
or requirement hereof shall be deemed to be a continuing waiver in the
future thereof or a waiver of any other provision, condition or
requirement hereof; nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any
such right accruing to it thereafter.
7.7 Severability. If one or more provisions of this Agreement
are held to be unenforceable, invalid or void by a court of competent
jurisdiction, such provision shall be excluded from this Agreement and
the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with
its terms.
7.8 Entire Agreement. This Agreement and the documents referred
to herein contain the entire understanding of the parties with respect
to the matters covered herein and supersedes all prior agreements and
understandings, written or oral, between the parties relating to the
subject matter hereof.
7.9 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California (irrespective of
its choice of law principles); provided, however, that neither this
Agreement nor any provision hereof shall be construed for or against
any party on the basis that such party drafted this Agreement or any
provision hereof.
7.10 Counterparts. This Agreement may be executed by facsimile
copies and in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY
5G Wireless Communications, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇ ▇▇▇
Title: President
PURCHASER
_________________________________
Address:
Telephone:
Facsimile:
E-mail:
EXHIBIT A
FORM OF NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), OR ANY STATE SECURITIES OR BLUE
SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT
WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR
(2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
AND UNDER APPLICABLE STATE SECURITIES AND BLUE SKY LAWS RELATING TO
THE DISPOSITION OF SECURITIES, PROVIDED THAT AN OPINION OF COUNSEL TO
SUCH EFFECT IS PROVIDED TO THE COMPANY IN CONNECTION THEREWITH.
5G WIRELESS COMMUNICATIONS, INC.
FORM OF
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$__________ ___________
Marina Del Rey, California
1. Principal and Interest.
1.1 5G Wireless Communications, Inc., a Nevada corporation
(the "Company"), for value received, hereby promises to pay to the
order of _____________________ (the "Holder") the amount of
_________________ Dollars ($________). This Convertible Subordinated
Promissory Note (the "Note") shall be subject to the terms and
conditions of a certain Subordinated, Convertible Note and Warrant
Agreement, entered into of even date herewith (the "Note and Warrant
Agreement") by and between the Company and the Holder. Terms used
herein and not otherwise defined shall have the meanings given to them
in the Note and Warrant Agreement.
1.2 The Note shall bear interest of eight percent (8%) per
annum. Interest on the Note shall be computed on the basis of a three
hundred sixty-five (365) day year and actual days elapsed. All of the
outstanding principal balance and any accrued and unpaid interest
under the Note shall be due and payable on Holder's demand on the date
that is twelve (12) months from the date hereof (the "Demand Date").
Commencing on the Demand Date, all principal and accrued interest
hereunder shall be payable upon demand. All outstanding principal
will continue to accrue interest until all of the outstanding
principal balance and any accrued but unpaid interest is paid in full.
1.3 Upon conversion of the principal and accrued interest
hereunder into capital stock sold in an Equity Financing (referred to
herein for convenience as the "Capital Stock") or common stock of the
Company (the "Common Stock") pursuant to Section 5 hereof, this Note
shall be terminated in its entirety and surrendered to the Company for
cancellation.
1.4 In the event the Bridge Financing is closed with terms
more favorable to the Outside Investors than those terms contained in
this Note, the Note shall, at the Holder's request, automatically be
converted into a Bridge Note.
2. Events of Default
If any of the events specified in this Section 2 shall occur
(herein individually referred to as an "Event of Default"), the Holder
of the Note may, so long as such condition exists, declare the entire
principal and accrued interest hereon immediately due and payable, by
notice in writing to the Company:
2.1 Default in the payment of the principal and accrued
interest of the Note when due and payable if such default is not cured
by the Company within ten (10) days after the Holder has given the
Company written notice of such default;
2.2 The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it or the
filing by it of a petition or answer or consent seeking reorganization
or release under the federal bankruptcy laws, or any other applicable
federal or state law, or the consent by it to the filing of any such
petition or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Company, or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the taking of corporate action by the
Company in furtherance of any such action;
2.3 If, within sixty (60) days after the commencement of an
action against the Company seeking any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such action shall not
have been resolved in favor of the Company or all orders or
proceedings thereunder affecting the operations or the business of the
Company stayed, or if the stay of any such order or proceeding shall
thereafter be set aside, or if, within sixty (60) days after the
appointment without the consent or acquiescence of the Company of any
trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company, such appointment
shall not have been vacated;
2.4 Any declared default of the Company under any Senior
Indebtedness (as defined below) that gives the holder thereof the
right to accelerate such Senior Indebtedness, and such Senior
Indebtedness is in fact accelerated by the holder;
2.5 Failure by the Company to observe or perform any
obligations of the Company to the Holder of the Note on or with
respect to the transaction evidenced by the Note; or
2.6 The institution of any proceeding for the dissolution
or termination of the Company voluntarily, involuntarily, or by
operation of law.
3. Subordination
The indebtedness evidenced by the Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all the Company's
Senior Indebtedness, as hereinafter defined.
3.1 Senior Indebtedness. As used in the Note, the term
"Senior Indebtedness" shall mean the principal of and unpaid accrued
interest on: (i) all indebtedness of the Company to banks, commercial
finance lenders, insurance companies or other financial institutions
regularly engaged in the business of lending money, which is for money
borrowed by the Company (whether or not secured), and (ii) any such
indebtedness or any debentures, notes or other evidence of
indebtedness issued in exchange for or to refinance such Senior
Indebtedness, or any indebtedness arising from the satisfaction of
such Senior Indebtedness by a guarantor.
3.2 Undertaking. By its acceptance of the Note, the Holder
agrees to execute and deliver such documents, in such form and having
such terms as are reasonably acceptable to the Holder, as may be
reasonably requested from time to time by the Company or the lender of
any Senior Indebtedness in order to implement the foregoing provisions
of this Section 3.
4. Prepayment
The Company may prepay the outstanding principal amount of the Note
plus any accrued but unpaid interest prior to the Demand Date at any time.
5. Conversion.
5.1 Automatic Conversion. In the event of a Change of
Control (hereinafter defined) prior to the Demand Date, then the
outstanding principal and accrued interest hereunder shall be
automatically converted into that number of fully paid and non-
assessable whole shares of Common Stock, determined in accordance with
Section 5.3 hereof at the Common Stock Conversion Price (hereinafter
defined) immediately prior to the consummation of the Change of
Control. Upon such conversion, the Note shall be canceled.
5.2 Conversion.
(a) In the event the Company conducts a sale of
Capital Stock with aggregate gross proceeds received, or to be
received, by the Company of at least Two Million Five Hundred Thousand
Dollars ($2,500,000) ( the "Equity Financing") prior to the Demand
Date, then all of the outstanding principal and accrued interest
hereunder automatically shall be converted into that number of fully
paid and non-assessable whole shares of Capital Stock determined in
accordance with Section 5.3 hereof at the applicable Conversion Price
concurrently with the initial closing of the Equity Financing. Upon
any such conversion, this Note shall be cancelled.
(b) Following the date hereof, all or a portion of the
outstanding principal and accrued interest hereunder may be converted
into that number of fully paid and non-assessable whole shares of
Common Stock determined in accordance with Section 5.3 hereof at the
applicable Conversion Price. Upon any such conversion, the Note shall
be canceled and reissued if applicable.
5.3 Shares Issuable. The number of whole shares of Capital
Stock or Common Stock into which the Note shall be converted pursuant
to Sections 5.1 and 5.2 hereof shall be determined by dividing (a) the
aggregate principal amount of the Note, together with all accrued
interest to the date of conversion, by (b) the purchase price of (i)
for the capital stock sold in an Equity Financing, the price per share
paid by third party investors at the initial closing of the Equity
Financing, or (ii) for any conversion into Common Stock, the lesser
of: (y) the average closing price of the Common Stock as listed on the
OTC Bulletin Board over the thirty (30) trading days immediately prior
to the Closing Date ($0.____ per share as of ____________), or (z) the
average closing price of the Common Stock as listed on the OTC
Bulletin Board over the thirty (30) trading days immediately prior to
the date of a Change of Control or the date of Holder's voluntary
exercise of the Note (respectively, as applicable, the "Conversion Price").
5.4 Conversion Procedures. Holder may convert the Note
below, in the following manners:
(a) Automatic Conversion Procedure for Change of
Control. Within twenty (20) business days prior to a Change of
Control, the Company shall send written notice to the Holder of the
Note, at the address last shown on the records of the Company for the
Holder or given by the Holder to the Company for the purpose of notice
or, if no such address appears or is given, at the place where the
principal executive office of the Company is located, notifying the
Holder of the impending Change of Control. Written notice shall be
delivered by the Company to the Holder of the Note at the address last
shown on the records of the Company for the Holder or given by the
Holder to the Company for the purpose of notice or, if no such address
appears or is given, at the place where the principal executive office
of the Company is located, ten (10) days prior to the Change of
Control, notifying holder that a Change of Control will be occurring,
notifying the Holder of the conversion effected, specifying the
Conversion Price, the principal amount of the Note and accrued
interest that was converted, the date on which such conversion
occurred, and calling upon such Holder to surrender the Note to the
Company in the manner and at the place designated.
(b) Automatic Conversion Procedure For Equity
Financing. Within five (5) business days prior to the consummation of
the Equity Financing, the Company shall send written notice to the
Holder of this Note, at the address last shown on the records of the
Company for the Holder or given by the Holder to the Company for the
purpose of notice or, if no such address appears or is given, at the
place where the principal executive office of the Company is located,
notifying the Holder of the impending Equity Financing. Such notice
shall notify holder that an Equity Financing will be occurring, notify
the Holder of the form of Capital Stock into which the Note shall be
converted, specifying the Conversion Price, the principal amount of
the Note and accrued interest that was converted, the date on which
such conversion shall occur, and calling upon such Holder to surrender
the Note to the Company in the manner and at the place designated.
(c) Voluntary Conversion Procedure. At any time
following the date hereof, Holder may deliver written notice to the
Company, at the address of the Company's principal executive office,
of the Holder's intent to convert the outstanding principal amount of
the Note and accrued interest to the date of such conversion (or any
portion thereof) into shares of Common Stock at the applicable
Conversion Price. In connection with giving such notice, Holder
shall surrender the Note to the Company.
5.5 Delivery of Stock Certificates. Upon the conversion of
the Note, the Company at its expense will issue and deliver to the
Holder of the Note a certificate or certificates for the number of
whole shares of Capital Stock or Common Stock, as applicable, issuable
upon such conversion.
5.6 Legends. Unless subject to an effective registration
statement filed with the United States Securities and Exchange
Commission, the stock certificate or certificates issued or issuable
upon conversion of the Note shall be subject to a stop transfer order
and the certificate or certificates evidencing such securities shall
bear the following legend:
(a) The following legend under the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR UPON
EVIDENCE REASONABLY SATISFACTORY TO 5G WIRELESS
COMMUNICATIONS INC. THAT SUCH REGISTRATION IS NOT REQUIRED
OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR ANOTHER
APPLICABLE EXEMPTION."
(b) Such other legends as may be required under state
or federal securities laws as determined in the opinion of Company
counsel.
5.7 No Fractional Shares. No fractional shares of Capital
Stock or Common Stock shall be issued upon conversion of the Note. In
lieu of the Company issuing any fractional shares to the Holder upon
the conversion of the Note, the Company shall pay to the Holder in
cash the amount of outstanding principal hereunder that is not so
converted.
6. Reservation of Stock Issuable Upon Conversion. In the event
of an Equity Financing, the Company shall at all times immediately
prior to the consummation of any such Equity Financing reserve and
keep available from its authorized and unissued shares of Capital
Stock and Common Stock (issuable upon conversion thereof), solely for
the purpose of effecting the conversion of the Note and the exercise
of the Warrant, such number of its shares of Capital Stock and Common
Stock, as applicable (and shares of Common Stock issuable upon
conversion thereof), as shall from time to time be sufficient to
effect the conversion of the Note and the exercise of the Warrant; and
if at any time following any such Equity Financing the number of
authorized but unissued shares of Capital Stock or Common Stock, as
applicable (and shares of Common Stock issuable upon conversion
thereof), shall not be sufficient to effect the conversion of the
entire outstanding principal amount of and accrued interest on this
Note and exercise of the Warrant, in addition to such other remedies
as shall be available to the Holder of this Note, the Company will
promptly take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares
of Capital Stock or Common Stock, as applicable (and shares of Common
Stock issuable upon conversion thereof), to such number of shares as
shall be sufficient for such purposes.
7. Assignment
Subject to the restrictions on transfer described in Section 9
below, the rights and obligations of the Company and the Holder of the
Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties. Effective upon any
such assignment, the person or entity to which such rights, interests,
and obligations were assigned shall have and exercise all of the
Holder's rights, interests and obligations hereunder as if such person
or entity were the original Holder of the Note.
8. Waiver and Amendment
Any provision of the Note may be amended, waived, or modified upon
the written consent of the Company and Holder.
9. Transfer of the Note or Securities Issuable Upon Conversion
Hereof.
With respect to any offer, sale or other disposition of the Note or
securities into which such Note may be converted, the Holder will give
written notice to the Company prior thereto, describing briefly the
manner thereof, together with a written opinion of such Holder's
counsel in a form reasonably satisfactory to the Company's counsel, to
the effect that such offer, sale or other distribution may be effected
without registration or qualification (under any federal or state law
then in effect). Promptly upon receiving such written notice and
reasonably satisfactory opinion, if so requested, the Company, as
promptly as practicable, shall notify such Holder that such Holder may
sell or otherwise dispose of the Note or such securities, all in
accordance with the terms of the notice delivered to the Company. If
a determination has been made pursuant to this Section 9 that the
opinion of counsel for the Holder is not reasonably satisfactory to
the Company, the Company shall so notify the Holder promptly after
such determination has been made. Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a
legend as to the applicable restrictions on transferability in order
to ensure compliance with the Securities Act of 1933, as amended (the
"Act"), unless in the opinion of counsel for the Company such legend
is not required in order to ensure compliance with the Act. The
Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
10. No Shareholder Rights
Nothing contained in the Note shall be construed as conferring upon
the Holder or any other person the right to vote or to consent or to
receive notice as a shareholder in respect of meetings of shareholders
for the election of directors of the Company or any other matters or
any rights whatsoever as a shareholder of the Company; and no
dividends or interest shall be payable or accrued in respect of the
Note or the interest represented hereby or the Capital Stock or Common
Stock, as applicable (or Common Stock issuable upon conversion
thereof), obtainable hereunder until, and only to the extent that, the
Note shall have been converted.
11. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of California, excluding that body of law
relating to conflict of laws.
12. Charges, Taxes and Expenses
Issuance of a certificate for shares of Common Stock upon the
conversion of the Note shall be made without charge to the Holder for
any issue or other incidental expense in respect of the issuance of
such certificate, all of which expenses shall be paid by the Company,
and such certificate shall be issued in the name of the Holder.
13. Loss, Theft or Destruction of Note
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft or destruction of the Note and of indemnity or
security reasonably satisfactory to it, the Company will make and
deliver a new Note which shall carry the same rights to interest
(unpaid and to accrue) carried by the Note, stating that such Note is
issued in replacement of the Note, making reference to the original
date of issuance of the Note (and any successors hereto) and dated as
of such cancellation, in lieu of the Note.
14. Usury
The Note is hereby expressly limited so that in no event
whatsoever, whether by reason of acceleration of maturity of the loan
evidenced hereby or thereby, or otherwise, shall the amount paid or
agreed to be paid to the Holder hereunder for the loan, use,
forbearance or detention of money exceed that permissible under
applicable law. If at any time the performance of any provision
hereof or of the Note or any other such agreement involves a payment
exceeding the limit of the price that may be validly charged for the
loan, use, forbearance or detention of money under applicable law,
then automatically and retroactively, ipso facto, the obligation to be
performed shall be reduced to such limit, it being the specific intent
of the Company and the Holder that all payments under the Note are to
be credited first to interest as permitted by law, but not in excess
of (i) the agreed rate of interest set forth herein or (ii) that
permitted by law, whichever is the lesser, and the balance toward the
reduction of principal. The provisions of this Section 14 shall never
be superseded or waived and shall control every other provision of the
Note and all other agreements between the Company and the Holder.
15. Issue Date
The provisions of the Note shall be construed and shall be given
effect in all respects as if the Note had been issued and delivered by
the Company on the earlier of the date hereof or the date of issuance
of any Note for which the Note is issued in replacement. The Note
shall be binding upon any successors or assigns of the Company.
16. Heading; References
All headings used herein are used for convenience only and shall
not be used to construe or interpret the Note. Except as otherwise
indicated, all references herein to Sections refer to Sections hereof.
17. Delays
No delay by the Holder in exercising any power or right hereunder
shall operate as a waiver of any power or right.
18. Severability
If one or more provisions of the Note are held to be unenforceable
under applicable law, such provision shall be excluded from the Note
and the balance of the Note shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms.
19. No Impairment
The Company will not, by any voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of the Note and
in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Holder of the Note against impairment.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the Company has caused this Note to be issued
this ______ day of _________________.
5 G WIRELESS COMMUNICATIONS, INC.
By: _________________________
Name: ______________________
Title: _______________________
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▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT B
FORM OF WARRANT
THE SECURITIES DESCRIBED IN THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144
UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE
LAW IS AVAILABLE.
FORM OF WARRANT AGREEMENT
This Warrant Agreement (the "Agreement") dated as of
____________________ between 5G Wireless Communications, Inc., a
Nevada corporation (the "Company"), and ___________________ ("Holder").
WHEREAS, Holder has lent the Company, through a demand promissory
note, an aggregate amount of ________________ Dollars ($__________)
(the "Note") pursuant to a certain Subordinated, Convertible Note and
Warrant Agreement, entered into of even date herewith (the "Note and
Warrant Agreement") by and between the Company and Holder. Terms used
but not otherwise defined herein shall have the meaning set forth in
the Note and Warrant Agreement.
WHEREAS, pursuant to the Note and Warrant Agreement, the Company
wishes to ▇▇▇▇▇ ▇▇▇▇▇▇ a warrant (the "Warrant") entitling Holder to
purchase an amount equal to forty percent (40%) of the amount invested
pursuant to the Note and Warrant Agreement (in this case ___________
Dollars ($___________)) worth of the Capital Stock of the Company at
the Exercise Price described herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Issuance of Warrant Certificate
The Warrant certificate to be delivered pursuant to this Agreement
(the "Warrant Certificate") shall be executed on behalf of the Company
by its Chief Executive Officer, President, or any Vice President under
its corporate seal reproduced thereon and attested by its corporate
Secretary or one of its assistant Secretaries. The Warrant
Certificate may be exchanged for any Bridge Warrants actually issued
on identical terms.
2. Right to Exercise Warrant.
Each Warrant may be exercised from the date of this Agreement
until 11:59 P.M. (Pacific Standard Time) on ______________ (the
"Expiration Date") pursuant to the provisions set forth in this
Agreement. Each Warrant not exercised on or before the Expiration
Date shall expire. Subject to the provisions of this Agreement,
Holder shall have the right to exercise this Warrant into, and the
Company shall issue and sell to Holder, Company Capital Stock at an
initial price per share as follows: (i) in the event the Note is
converted into an Equity Financing, this Warrant shall be exercisable
for the stock issued in such Equity Financing at the price per share
paid by third party investors at the initial closing of the Equity
Financing, or (ii) in the event of any conversion of the Note into
Common Stock, this Warrant may be exercised for Common Stock of the
Company at a price per share equal to the conversion price of the Note.
Upon surrender of such Warrant Certificate and payment of the
Exercise Price by either cash or cashless exercise ("Net Issue
Exercise"), the Company shall cause the number of Shares to be issued
and delivered promptly to Purchaser or any other holder he may
designate. In the event that upon any exercise of the Warrant
evidenced hereby, the number of Shares purchased upon exercise shall
be less than the total number of Shares underlying the Warrant there
shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Shares not purchased. The
Warrant evidenced by a Warrant Certificate shall be exercisable at the
election of the holder thereof, subject to the provisions of
Sections 4 and 5 hereof.
(a) Cash Exercise. The Warrant may be exercised by the
holder by (i) the surrender of the Warrant Certificate to the Company,
with the Notice of Exercise annexed hereto duly completed and executed
on behalf of the holder, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in
writing to the holder at the address of the holder appearing on the
books of the Company) and (ii) the delivery of payment to the Company,
for the account of the Company, by cash, wire transfer of immediately
available funds to a bank account specified by the Company, or by
certified or bank cashier's check, of the Exercise Price for the
number of Shares specified in the Notice of Exercise in lawful money
of the United States of America. The Company agrees that such Shares
shall be deemed to be issued to the holder as the record holder of
such Shares as of the close of business on the date on which the
Warrant Certificate shall have been surrendered and payment made for
the Shares as aforesaid. A stock certificate or certificates for the
Shares specified in the Notice of Exercise shall be delivered to the
holder as promptly as practicable, and in any event within 10 days,
thereafter. No adjustments shall be made on the Shares issuable on
the exercise of the Warrant for any cash dividends paid or payable to
holders of record of Common Stock or Capital Stock, as applicable,
prior to the date as of which the holder shall be deemed to be the
record holder of the Shares.
(b) Net Issue Exercise. In lieu of exercising the Warrant
pursuant to Section 2(a), the holder may elect to receive, without the
payment by the holder of any additional consideration, shares equal to
the value of the Warrant, or any portion thereof, by the surrender of
the Warrant Certificate to the Company, with the Notice of Exercise
annexed hereto duly executed, at the office of the Company.
Thereupon, the Company shall issue to the holder such number of fully
paid and nonassessable shares of Common Stock or Capital Stock, as
applicable, as is computed using the following formula:
X = Y (A-B)
A
where
X = the number of Shares to be issued to the holder pursuant to
this Section 2(b).
Y = the number of Shares otherwise issuable under the Warrant
Certificate or, if only a portion of the Warrant is being exercised,
the portion of the Warrant Certificate being surrendered (as adjusted
to the date of such calculation).
A = if for Common Stock, the closing stock price of one share of
Common Stock as reported by the OTC Bulletin Board on the trading day
immediately prior to the date the Company receives the Notice of
Election, or if for Capital Stock, the fair market value of one share
of Capital Stock as determined by the Company's Board of Directors on
the business day immediately prior to the date the Company receives
the Notice of Election.
B = the Exercise Price in effect under the Warrant at the time
the Net Issue Election is made pursuant to this Section 2(b).
3. Reservation of Shares
The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued
Shares or its authorized and issued Shares held in its treasury for
the purpose of enabling it to satisfy any obligation to issue Shares
upon exercise of the Warrant, the full number of Shares deliverable
upon the exercise of the Warrant. The Company covenants that all
Shares which may be issued upon exercise of the Warrant will be
validly issued, fully paid and nonassessable outstanding Shares of the
Company.
4. Registration under the Securities Act of 1933 (the "Act")
Purchaser represents and warrants to the Company that Purchaser is
acquiring the Warrant for investment and with no present intention of
distributing or reselling any of the Warrant. The Shares and the
certificate or certificates evidencing any such Shares shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE
LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT
(OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE
ACT AND APPLICABLE STATE LAW IS AVAILABLE.
Certificates for the Warrant or Shares shall also bear such
legends as may be required from time to time by law.
5. Rule 144
If the Company shall be subject to the reporting requirements of
Section 13 of the Securities Exchange Act of 1934 Act (the "1934
Act"), the Company will use its best efforts to file timely all
reports required to be filed from time to time with the Commission
(including but not limited to the reports under Section 13 and 15(d)
of the 1934 Act referred to in subparagraph (c)(1) of Rule 144 adopted
by the Company under the Act). If there is a public market for any
Shares of the Company at any time that the Company is not subject to
the reporting requirements of either of said Section 13 or 15(d), the
Company will, upon the request of any holder of any Shares or Warrant,
use its best efforts to make publicly available the information
concerning the Company referred to in subparagraph (c)(2) of said
Rule 144. The Company will furnish to each holder of any Shares or
Warrant, promptly upon request, (i) a written statement of the
Company's compliance with the requirements of subparagraphs (c)(1) or
(c)(2,) as the case may be, of said Rule 144, and (ii) written
information concerning the Company sufficient to enable such holder to
complete any Form 144 required to be flied with the Commission
pursuant to said Rule 144.
6. Adjustment of Exercise Price and Number of Shares and Class
of Capital Stock Purchasable
The Exercise Price and the number of Shares purchasable upon the
exercise of each Warrant are subject to adjustment from time to time
as set forth in this Section 6.
(a) Adjustment for Change in Capital Stock. If the
Company: pays a dividend or makes a distribution on its Common Stock
or Capital Stock, as applicable, in each case, in shares of its Common
Stock or Capital Stock, as applicable; subdivides its outstanding
shares of Common Stock or Capital Stock, as applicable, into a greater
number of shares; combines its outstanding shares of Common Stock or
Capital Stock, as applicable, into a smaller number of shares; makes a
distribution on its Common Stock or Capital Stock, as applicable, in
shares of its capital stock other than Common Stock or Capital Stock;
or issues by reclassification of its shares of Common Stock or Capital
Stock, as applicable, any shares of such capital stock; then the
number and classes of Shares purchasable upon exercise of each Warrant
in effect immediately prior to such action shall be adjusted so that
the holder of any Warrant thereafter exercised may receive the number
and classes of Shares of capital stock of the Company which such
holder would have owned immediately following such action if such
holder had exercised the Warrant immediately prior to such action.
(b) Consolidation, Merger or Sale of the Company. If the
Company is a party to a consolidation, merger or transfer of assets
that reclassifies or changes its outstanding Common Stock, the
successor corporation (or corporation controlling the successor
corporation or the Company, as the case may be) shall by operation of
law assume the Company obligations under this Agreement. Upon
consummation of such transaction the Warrant shall automatically
become exercisable for the kind and amount of securities, cash or
other assets that the holder of the Warrant would have owned
immediately after the consolidation, merger or transfer if such holder
had exercised the Warrant immediately before the effective date of
such transaction. As a condition to the consummation of such
transaction, the Company shall arrange for the person or entity
obligated to issue securities or deliver cash or other assets upon
exercise of the Warrant to, concurrently with the consummation of such
transaction, assume the Company's obligations hereunder by executing
an instrument so providing and further providing for adjustments which
shall be as nearly equivalent as may be practical to the adjustments
provided for in this Section.
7. Notices to Company and Holder
Any notice or demand authorized by this Agreement to be given or
made by any registered holder of any Warrant Certificate to or on the
Company shall be sufficiently given in compliance with the Note and
Warrant Agreement.
8. Supplements and Amendments
The Company and Holder may from time to time supplement or amend
this Agreement in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which
the Company and Holder may deem necessary or desirable.
9. Successors
All the covenants and provisions of this Agreement by or for the
benefit of the Company or Holder shall bind and inure to the benefit
of their respective successors and assigns hereunder.
10. Governing Law
This Agreement and each Warrant Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of
California and for all proposes shall be governed by and construed in
accordance with the laws of said State.
11. Counterparts
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all proposes be deemed to be an
original, and such counterparts shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the date and year first above written.
HOLDER
5G Wireless Communications, Inc.
________________________
By: ________________________
Name: ______________________
Title:
_______________________
Address:
5 G Wireless Communications, Inc.
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Telephone:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
5G WIRELESS COMMUNICATIONS INC.
WARRANT CERTIFICATE
No. _____
This Warrant Certificate certifies that ______________________
("Holder"), or his/her/its registered assigns, is the registered
holder of a warrant (the "Warrant"), which shall expire on
______________ (the "Expiration Date"). The Warrant entitles Holder
to purchase from the Company before 11:59 p.m. (Pacific Standard Time)
on the "Expiration Date" ____________ Dollars ($_______) worth of
fully paid and nonassessable shares of Common Stock, or in the event
of an Equity Financing, shares of Capital Stock issued in such Equity
Financing, at the initial Exercise Price for each Share, subject to
adjustment in certain events (the "Exercise Price"), upon surrender of
this Warrant Certificate and payment of the Exercise Price at an
office or agency of the Company, subject to the terms and conditions
set forth herein. As used herein, "Share" or "Shares" refers to the
Common Stock or Capital Stock and, where appropriate, to the other
securities or property issuable upon exercise of the Warrant as
provided for in the Warrant Agreement (as defined below) upon the
happening of certain events. Unless otherwise set forth herein, all
capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Warrant Agreement.
The Exercise Price and the number of Shares purchasable upon
exercise of the Warrant are subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement. In the event
that upon any exercise of the Warrant evidenced hereby, the number of
Shares purchased shall be less than the total number of Shares
underlying the Warrant evidenced hereby, there shall be issued to the
holder hereof or his or her assignee a new Warrant Certificate
evidencing the number of Shares not purchased. No adjustment shall be
made for any cash dividends on any Shares issuable upon exercise of
the Warrant.
The Warrant may be exercised after 11:59 P.M. (Pacific Standard
Time) on the Expiration Date. The Warrant evidenced hereby shall
thereafter be void.
The Warrant evidenced by this Warrant Certificate is issued
pursuant to a Warrant Agreement, dated as of ______________ (the
"Warrant Agreement") duly executed by the Company and Holder. The
Warrant Agreement is hereby incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder of the
Warrant Certificates).
The Company may deem and treat the person(s) registered in the
Company's register as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise
hereof, and of any distribution to the holder(s) hereof, and for all
purposes, and the Company shall not be affected by any notice to the
contrary.
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER
THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE
ACT AND APPLICABLE STATE LAW IS AVAILABLE.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
5G Wireless Communications, Inc.
Holder
By: ______________________
Name: ___________________
Title: ____________________
NOTICE OF EXERCISE
To: 5G WIRELESS COMMUNICATIONS INC.
The undersigned hereby elects to purchase _________________________
shares of Common Stock/Capital Stock of 5G WIRELESS COMMUNICATIONS,
INC. ("Shares") pursuant to the terms of the attached Warrant
Certificate, and (check the appropriate box):
- tenders herewith payment for the purchase of
______________________ shares of Common Stock/Capital Stock;
and/or
- elects to exercise Net Issue Exercise, as provided in
Section 2(b) of the Warrant Agreement, for the purchase of
______________________ shares of Common Stock/Capital Stock.
In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock or Capital Stock, as
applicable to be issued upon conversion thereof are being acquired
solely for the account of the undersigned and not as a nominee for any
other party, or for investment, and that the undersigned will not
offer, sell or otherwise dispose of any such shares of Common Stock or
Capital Stock, as applicable, except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or
any applicable state securities laws.
Please issue a certificate or certificates representing said shares of
Common Stock or Capital Stock, as applicable, in the name of the
undersigned or in such other name(s) as is specified below:
____________________________________________
____________________________________________
____________________________________________
Please issue a new Warrant Certificate for the unexercised portion of
the attached Warrant Certificate in the name of the undersigned or in
such other name(s) as is specified below:
____________________________________________
____________________________________________
HOLDER:
__________________________________
__________________________________
Signature of Holder Date
__________________________________
____________________________________
Printed Name of Holder Amount of Payment