8% SENIOR SECURED CONVERTIBLE DEBENTURE
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE SECURITIES ARE RESTRICTED AND
MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
No. US $
World Wide Wireless Communications, Inc.
8% SENIOR SECURED CONVERTIBLE DEBENTURE DUE MARCH 29, 2003
THIS DEBENTURE is issued by World Wide Wireless Communications, Inc., a
corporation organized and existing under the laws of the State of Nevada (the
"Company") and is designated as its 8% Convertible Debenture Due March 29, 2003.
FOR VALUE RECEIVED, the Company promises to pay to Holder or permitted
assigns (the "Holder"), the principal sum of ______Dollars on March 29, 2003
(the "Maturity Date") and to pay interest quarterly in arrears on the principal
sum outstanding at the rate of 8% per annum (based upon a 360 calendar day year)
accruing from the date of initial issuance. Accrual of interest shall commence
on the first business day to occur after the date of initial issuance and
continue until payment in full of the principal sum has been made or duly
provided for. The first interest payment shall be due and payable on the earlier
of the (1) redemption or conversion, and (2) April 1. Unless fully redeemed or
converted, in which case accrued but unpaid interest shall be paid on such date,
subsequent interest payments shall be made thereafter on June 1, September 1,
December 1 and April 1. If the Maturity Date or any interest payment date is not
a business day in the State of New York, then such payment shall be made on the
next succeeding business day. The Company will pay the principal of, and any
accrued and unpaid interest due upon this Debenture on the Maturity Date by
check or wire transfer to the person who is the registered Holder. The
forwarding of such check or money order shall constitute a payment of principal
and interest hereunder and shall satisfy and discharge the liability for
principal and interest on this Debenture to the extent of the sum represented by
such check or wire transfer plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
1. Withholdings. The Company shall be entitled to withhold from all
payments of interest on this Debenture any amounts required to be withheld under
the applicable provisions of the United States income tax laws or other
applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.
2. Transfers. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and other applicable state and foreign securities laws. The Holder shall
deliver written notice to the Company of any proposed transfer of this
Debenture. In the event of any proposed transfer of this Debenture, the Company
may require, prior to issuance of a new Debenture in the name of such other
person, that it receive reasonable transfer documentation including legal
opinions that the issuance of the Debenture in such other name does not and will
not cause a violation of the Act or any applicable state or foreign securities
laws. Prior to due presentment for transfer of this Debenture, the Company and
any agent of the Company may treat the person in whose name this Debenture is
duly registered on the Company's Debenture Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Debenture be overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary. This Debenture has been
executed and delivered pursuant to the Convertible Debenture and Warrants
Purchase Agreement dated as of March 29, 2001 between the Company and the
original Holder (the "Purchase Agreement"), and is subject to the terms and
conditions of the Purchase Agreement, which are, by this reference, incorporated
herein and made a part hereof. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Purchase
Agreement.
3. Conversion Rights.
(a) At any time (i) commencing after the 90th calendar day from the
Closing Date until the effective date of the Equity Line registration
statement and during any periods thereafter during which the effectiveness
of the Equity Line registration statement is not maintained, or (ii)
commencing any date after the Company fails to materially comply with any
of the provisions of the Purchase Agreement or any of the exhibits thereto,
until this Debenture is paid in full, the Holder of this Debenture may
convert the Purchase Price or any portion thereof, into Conversion Shares
at a Conversion Price equal to the lesser of (i) $0.088 (the "Set Price")
(the average of the five (5) Bid Prices immediately prior to the Closing
Date)(adjusted for stock splits and the like), and (ii) 70% of the average
of the three (3) lowest Bid Prices during the twenty-two (22) Trading Days
immediately prior to the Conversion Date (as defined below). If, upon any
conversion of this Debenture, the Company's issuance of Conversion Shares
would cause it to violate any listing requirement of the Principal Market,
then in lieu of such stock issuance, the Company shall pay the Holder,
within five (5) calendar days, cash in an amount equal to the highest Bid
Price during the period commencing on the Conversion Date and ending on the
date of payment multiplied by the number of shares which would otherwise
have been issuable upon such conversion. The Company shall be liable for
the liquidated damages as set forth in Section 8 herein for any failure to
make such payments to the Holder within the specified period of time.
Additionally, except for
2
sales of its securities (i) pursuant to the exercise of options granted or
to be granted under an employee benefit plan which plan has been approved
by the Company's stockholders, (ii) pursuant to any compensatory plan for a
full-time employee or key consultant, (iii) in connection with a strategic
partnership or other business transaction, the principal purpose of which
is not simply to raise money, or (iv) pursuant to the Equity Line, if
during the period beginning on the date hereof and ending when the Holder
no longer holds any of the principal amount of this Debenture or any
accrued but unpaid interest of this Debenture (the "MFN Period"), the
Company sells any shares of its Common Stock at a per share selling price
("Per Share Selling Price") lower than the Set Price per share, then the
Set Price shall be adjusted downward to equal such lower Per Share Selling
Price. The Company shall give to each Holder written notice of any such
sale within 24 hours of the closing of any such sale.
(b) For the purpose of this Section 3, the term "Per Share Selling
Price" shall mean the amount actually paid by third parties for each
Conversion Share. A sale of shares of Common Stock shall include the sale
or issuance of rights, options, warrants or convertible securities
("derivative securities") under which the Company is or may become
obligated to issue shares of Common Stock, and in such circumstances the
sale of Common Stock shall be deemed to have occurred at the time of the
issuance of the derivative securities and the Per Share Selling Price of
the Common Stock covered thereby shall also include the exercise or
conversion price thereof (in addition to the consideration per underlying
Conversion Share received by the Company upon such sale or issuance of the
derivative security). In case of any such security issued within the MFN
Period in a "Variable Rate Transaction" or an "MFN Transaction" (each as
defined below), the Per Share Selling Price shall be deemed to be the
lowest conversion or exercise price at which such securities are converted
or exercised in the case of a Variable Rate Transaction, or the lowest
adjustment price in the case of an MFN Transaction. If shares are issued
for a consideration other than cash, the per share selling price shall be
the fair value of such consideration as determined in good faith by the
Board of Directors of the Company.
(c) For the purpose of Section 3(b), the term "Variable Rate
Transaction" shall mean a transaction in which the Company issues or sells
(i) any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of
Common Stock either (A) at a conversion, exercise or exchange rate or other
price that is based upon and/or varies with the trading prices of or
quotations for the Common Stock at any time after the initial issuance of
such debt or equity securities, or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence of
specified or contingent events directly or indirectly related to the
business of the Company or the market for the Common Stock (but excluding
standard stock split anti-dilution provisions), or (ii) any securities of
the Company pursuant to an "equity line" structure which provides for the
sale, from time to time, of securities of the Company which are registered
for resale pursuant to the Securities Act.
(d) For the purposes of Section 3(b), the term "MFN Transaction" shall
mean a transaction in which the Company issues or sells any securities in a
capital raising
3
transaction or series of related transactions (the "New Offering") which
grants to an investor (the "New Investor") the right to receive additional
shares based upon future transactions of the Company on terms more
favorable than those granted to the New Investor in the New Offering.
(e) In case of any stock split or reverse stock split, stock dividend,
reclassification of the common stock, recapitalization, merger or
consolidation, or like capital adjustment affecting the Common Stock of the
Company, the provisions of this Section 3 shall be applied in a fair,
equitable and reasonable manner so as to give effect, as nearly as may be,
to the purposes hereof.
4. Interest. The rate of interest on this Debenture shall be eight percent
(8%) per annum (based on a 360 calendar day year), on the outstanding principal
amount of the this Debenture until paid, redeemed or converted and payable in
cash or registered shares of Common Stock (based on the highest Bid Price during
the period commencing on on the Trading Day on which payment of interest is made
until such payment is actually made); except that, if the Company fails to pay
the outstanding principal and any accrued by unpaid interest due upon this
Debenture on the Maturity Date, the interest rate shall be increased to sixteen
percent (16%) per annum (based on a 360 calendar day year) until this Debenture
is paid in full.
5. Optional Redemption. At the election of the Holder, the Company shall
use all of the net proceeds from any other sale of its securities for cash
(including the Equity Line) (each a "Subsequent Sale"), to redeem this
Debenture, plus all accrued but unpaid interest and a payment premium of 20% of
the outstanding principal balance hereof, [except that, if the proceeds from the
Equity Line are used to redeem this Debenture, the payment premium shall be
7.5%][REMOVE IF ENDEAVOUR]. The Company shall give the Holder at least five (5)
Trading Days' notice prior to the closing date of a Subsequent Sale (each a
"Subsequent Sale Closing Date"). The Company shall make redemption payments to
the Holder on such Subsequent Sale Closing Date directly out of the proceeds of
any such Subsequent Sale (whether through an escrow arrangement or directly from
the purchaser of such securities). [The Holder shall have the right to convert
this Debenture as set forth in Section 3 until the Trading Day immediately prior
to the Trading Day set for payment of the redemption price.]
6. Security Interest. This Debenture is secured, pari passu with all other
holders of the Company's 8% Senior Secured Convertible Debentures issued
pursuant to the Purchase Agreement, by a security interest in the assets of the
Company as set forth in that certain Security Agreement, dated as of the
Purchase Agreement, among the original holders of the 8% Senior Secured
Convertible Debentures and the Company.
7. Maturity. On the Maturity Date, the Company shall pay the principal of
and any accrued but unpaid interest due upon this Debenture, less any amounts
required by law to be deducted, to the registered Holder at the last address
appearing on the debenture register. The Company shall not have the right to
pre-pay this Debenture, except pursuant to Section 5 herein, without the prior
written consent of the holder.
4
8. Conversion Procedures.
(a) Conversion shall be effectuated by delivering the form of
conversion notice attached hereto as Exhibit A (the "Notice of
Conversion"), executed by the Holder evidencing such Holder's intention to
convert a specified portion of this Debenture and if, and only if, the
Holder intends to convert the entire outstanding principal amount of this
Debenture, the surrender of this Debenture. Interest accrued or accruing
from the date of issuance to the Conversion Date shall be paid as set forth
above. No fraction of a share or scrip representing a fraction of a share
will be issued on conversion, but the number of shares issuable shall be
rounded to the nearest whole share. The "Conversion Date" shall be deemed
to be the date on which the Holder faxes the Notice of Conversion duly
executed to the Company. Facsimile delivery of the Notice of Conversion
shall be accepted by the Company at facsimile number 510-839-7088 Attn.:
Harry Kraatz. Certificates representing Common Stock upon conversion will
be delivered to the Holder within three (3) Trading Days from the
Conversion Date. Delivery of Conversion Shares shall be made to the address
specified by the Holder in the Notice of Conversion.
(b) The Company understands that a delay in the issuance of Conversion
Shares (and if during periods that the Registration Statement is effective
or sales may be made pursuant to Rule 144, issuance without any legends),
or, if applicable, cash, upon a conversion pursuant to Section 3 herein
beyond three (3) Trading Days could result in economic loss to the Holder.
As compensation to the Holder for such loss, the Company agrees to pay late
payments to the Holder for late issuance of Conversion Shares (and if
during periods that the Registration Statement is effective or sales may be
made pursuant to Rule 144, issuance without any legends) in accordance with
the following schedule (where "No. Trading Days Late" is defined as the
number of Trading Days beyond three (3) Trading Days from the Conversion
Date).
- ------------------------------------- ---------------------------------------
Late Payment for Each
$5,000 of Principal Amount
No. Trading Days Late Being Converted
- ------------------------------------- ---------------------------------------
1 $100
- ------------------------------------- ---------------------------------------
2 $200
- ------------------------------------- ---------------------------------------
3 $300
- ------------------------------------- ---------------------------------------
4 $400
- ------------------------------------- ---------------------------------------
5
- ------------------------------------- ---------------------------------------
Late Payment for Each
$5,000 of Principal Amount
No. Trading Days Late Being Converted
- ------------------------------------- ---------------------------------------
5 $500
- ------------------------------------- ---------------------------------------
6 $600
- ------------------------------------- ---------------------------------------
7 $700
- ------------------------------------- ---------------------------------------
8 $800
- ------------------------------------- ---------------------------------------
9 $900
- ------------------------------------- ---------------------------------------
10 $1,000
- ------------------------------------- ---------------------------------------
$1,000 +$200 for each Trading Day
More than 10 Late beyond 10 Trading Days
- ------------------------------------- ---------------------------------------
- ------------------------------------- ---------------------------------------
The Company shall pay any payments incurred under this Paragraph 8(b)
in immediately available funds upon demand. Nothing herein shall limit
Holder's right to pursue injunctive relief and/or actual damages for the
Company's failure to issue and deliver Conversion Shares (and if during
periods that the Registration Statement is effective or sales may be made
pursuant to Rule 144, issuance without any legends) or, if applicable,
cash, to the Holder, including, without limitation, the Holder's actual
losses occasioned by any "buy-in" of Common Stock necessitated by such late
delivery. Furthermore, in addition to any other remedies which may be
available to the Holder, in the event that the Company fails for any reason
to effect delivery of such Conversion Shares (and if during periods that
the Registration Statement is effective or sales may be made pursuant to
Rule 144, issuance without any legends) or, if applicable, cash, within
three (3) Trading Days from the Conversion Date, the Holder will be
entitled to revoke the relevant Notice of Conversion by delivering a notice
to such effect to the Company, whereupon the Company and the Holder shall
each be restored to their respective positions immediately prior to
delivery of such Notice of Conversion except that the each Holder shall
retain the right to receive both any late payment liquidated damages as set
forth above, accrued as of the revocation date, plus the actual net costs
of any "buy-in".
6
(c) If at any time (i) the Company challenges, disputes or denies the
right of the Holder to effect the conversion of this Debenture into
Conversion Shares or, if applicable, cash, or otherwise dishonors or
rejects any Notice of Conversion properly delivered in accordance with this
Paragraph 8, or (ii) any Company stockholder who is not and has never been
an Affiliate (as defined in Rule 405 under the Securities Act of 1933, as
amended) of the Holder obtains a judgment or any injunctive relief from any
court or public or governmental authority which denies, enjoins, limits,
modifies, delays or disputes the right of the Holder hereof to effect the
conversion of this Debenture into Conversion Shares, then the Holder shall
have the right, by written notice, to require the Company to promptly
redeem this Debenture for cash at a redemption price equal to one hundred
fifty percent (150%) of the outstanding principal amount hereof and all
accrued and unpaid interest hereon. Under any of the circumstances set
forth above, the Company shall indemnify and hold harmless the Holder and
be responsible for the payment of all costs and expenses of the Holder,
including its reasonable legal fees and expenses, as and when incurred in
disputing any such action or pursuing its rights hereunder (in addition to
any other rights of the Holder). In the event a Holder of this Debenture
shall elect to convert any or all of the outstanding principal amount
hereof, the Company may not refuse conversion based on any claim that the
Holder or any one associated or affiliated with the Holder of has been
engaged in any violation of law, agreement or for any other reason, unless,
an injunction from a court, on notice, restraining and or enjoining
conversion of all or part of this Debenture shall have been sought and
obtained and the Company posts a surety bond for the benefit of the Holder
in the amount of 150% of the principal amount of this Debenture
outstanding, which is subject to the injunction, which bond shall remain in
effect until the completion of arbitration/litigation of the dispute and
the proceeds of which shall be payable to such Holder to the extent it
obtains judgment. In the absence of an injunction precluding the same, the
Company shall issue Conversion Shares or, if applicable, cash, upon a
properly noticed conversion.
9. Company's Obligation. No provision of this Debenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, and interest on, this Debenture at the time, place, and
rate, and in the coin or currency or Conversion Shares herein prescribed. This
Debenture is a direct obligation of the Company.
10. Recourse. No recourse shall be had for the payment of the principal of,
or the interest on, this Debenture, or for any claim based hereon, or otherwise
in respect hereof, against any incorporator, shareholder, employee, officer or
director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
11. Merger, Consolidation or Sale of Assets. In case of any (a) merger or
consolidation of the Company with or into another Person, or (b) sale by the
Company of more than one-half of the assets of the Company (on an as valued
basis) in one or a series of related transactions, the Holder shall have the
right to (i) deem such an occurrence an Event of Default and exercise its rights
of prepayment pursuant to Paragraph 14 herein, (ii) convert its aggregate
7
principal amount of this Debenture then outstanding into the shares of stock and
other securities, cash and property receivable upon or deemed to be held by
holders of Common Stock following such merger, consolidation or sale, and the
Holder shall be entitled upon such event or series of related events to receive
such amount of securities, cash and property as the Conversion Shares into which
such aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (iii) in the case of a merger or consolidation, (A) require the
surviving entity to issue securities with such aggregate stated value or in such
face amount, as the case may be, equal to the aggregate principal amount of this
Debenture then held by the Holder, plus all accrued and unpaid interest and
other amounts owing thereon, which newly issued securities shall have terms
identical (including with respect to conversion) to the terms of this Debenture
and shall be entitled to all of the rights and privileges of the Holder of this
Debenture set forth herein and the agreements pursuant to which this Debenture
was issued (including, without limitation, as such rights relate to the
acquisition, transferability, registration and listing of such shares of stock
other securities issuable upon conversion thereof), and (B) simultaneously with
the issuance of such securities, shall have the right to convert such instrument
only into shares of stock and other securities, cash and property receivable
upon or deemed to be held by holders of Common Stock following such merger or
consolidation. The terms of any such merger, sale or consolidation shall include
such terms so as to continue to give the Holder the right to receive the
securities, cash and property set forth in this Paragraph upon any conversion or
redemption following such event. This Paragraph shall similarly apply to
successive such events.
12. Obligations of Holder. The Holder, by acceptance hereof, agrees that
this Debenture is being acquired for investment and that such Holder will not
offer, sell or otherwise dispose of this Debenture or the Conversion Shares
thereof except under circumstances which will not result in a violation of the
Act or any applicable state Blue Sky or foreign laws or similar laws relating to
the sale of securities.
13. Governing Law. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.
14. Event of Default. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of principal or interest
on this Debenture and same shall continue for a period of three (3) Trading
Days; or
b. Any of the material representations or warranties made by the
Company herein, in the Purchase Agreement, the Registration Rights
Agreement, or in any agreement, certificate or financial statements
heretofore or hereafter furnished by the Company in connection with the
execution and delivery of this Debenture or the Purchase Agreement shall be
false or misleading in any material respect at the time made; or
8
c. The Company fails to issue Conversion Shares to the Holder or to
cause its Transfer Agent to issue Conversion Shares, or, if applicable,
cash, upon proper exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Debenture, fails to transfer or
to cause its Transfer Agent to transfer any certificate for Conversion
Shares issued to the as and when required by this Debenture or the
Registration Rights Agreement, and such transfer is otherwise lawful, or
fails to remove any restrictive legend or to cause its Transfer Agent to
transfer any certificate or any Conversion Shares issued to the Holder as
and when required by this Debenture, the Purchase Agreement or the
Registration Rights Agreement and such legend removal is otherwise lawful,
and any such failure shall continue uncured for five (5) business days; or
d. The Company shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition, agreement or
obligation of the Company under the Purchase Agreement, the Registration
Rights Agreement or this Debenture, including, without limitation, failure
by the Company to redeem this Debenture as set forth in Section 5 herein,
and, except for the failure to redeem this Debenture pursuant to Section 5
herein, such failure shall continue uncured for a period of thirty (30)
days after written notice from the Holder of such failure, unless a shorter
period of time to cure is set forth in the Purchase Agreement; or
e. The Company shall (i) admit in writing its inability to pay its
debts generally as they mature; (ii) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (iii) apply for
or consent to the appointment of a trustee, liquidator or receiver for its
or for a substantial part of its property or business; or
f. A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or control of
the whole or any substantial portion of the properties or assets of the
Company and shall not be dismissed within sixty (60) days thereafter; or
h. Any money judgment, writ or warrant of attachment, or similar
process in excess of One Hundred Thousand ($100,000) Dollars in the
aggregate shall be entered or filed against the Company or any of its
properties or other assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of sixty (60) days or in any event later than five
(5) days prior to the date of any proposed sale thereunder; or
i. Bankruptcy, reorganization, insolvency or liquidation proceedings
or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60)
days after such institution or the Company shall by any action or answer
approve of, consent to, or acquiesce in any such proceedings or admit
9
the material allegations of, or default in answering a petition filed in
any such proceeding;
j. The Registration Statement is not declared effective by the
Commission within one hundred twenty (120) days from a Registration Event
(as defined in the Registration Rights Agreement); and
k. The Company shall have its Common Stock suspended or delisted from
trading on a Principal Market for in excess of five (5) Trading Days.
Then, or at any time thereafter, and in each and every such case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately enforce any and all of the
Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.
15. Rights as Shareholder. Nothing contained in this Debenture shall be
construed as conferring upon the Holder the right to vote or to receive
dividends or to consent or receive notice as a shareholder in respect of any
meeting of shareholders or any rights whatsoever as a shareholder of the
Company, unless and to the extent converted in accordance with the terms hereof.
Upon delivery to the Company of a Notice of Conversion by a Holder, such Holder
shall immediately be deemed a shareholder of the Company with respect to the
Conversion Shares to be issued pursuant to such Notice of Conversion.
16. Limitation on Conversion. In no event shall the Holder be permitted to
convert this Debenture for Conversion Shares to the extent that (a) the number
of shares of Common Stock beneficially owned by such Holder (other than
Conversion Shares) plus (b) the number of Conversion Shares, would be equal to
or exceed 9.9% of the number of shares of Common Stock then issued and
outstanding, including shares issuable upon conversion of this Debenture held by
such Holder after application of this Paragraph 16. As used herein, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder. To
the extent that the limitation contained in this Paragraph 16 applies, the
determination of whether this Debenture is convertible (in relation to other
securities owned by the Holder) and of which a portion of this Debenture is
convertible shall be in the sole discretion of such Holder, and the submission
of a Notice of Conversion shall be deemed to be such Holder's determination of
whether this Debenture is convertible (in relation to other securities owned by
such Holder) and of which portion of this Debenture is convertible, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. Nothing
contained herein shall be deemed to restrict the right of a Holder to convert
this Debenture at such time as such conversion will not violate the provisions
of this Paragraph 16. The provisions of this Paragraph 16 may be waived by the
Holder of this Debenture upon, at the election of the Holder, not less than 61
calendar days' prior notice to the Company, and the provisions of this Paragraph
16 shall continue to apply until such 61st day (or, at the election of the
Holder, such later date as
10
may be specified in such notice of waiver). No conversion of this Debenture in
violation of this Paragraph 16 but otherwise in accordance with this Debenture
shall affect the status of the Common Stock issued upon such conversion as
validly issued, fully-paid and nonassessable. If instead of receiving cash on
the Maturity Date the Holder instead exercises its right to convert this
Debenture into Common Stock pursuant to Paragraph 3 by delivery of a Notice of
Conversion prior to receipt of payment, and such conversion would cause the
limit contained in the first sentence of this Paragraph 16 to be exceeded, such
conversion of this Debenture shall occur up to such limit and the remaining
unconverted portion of this Debenture shall be converted into Common Stock in
accordance with one or more Notices of Conversion delivered by the Holder 61
days after the Maturity Date.
17. Section Headings. The headings used in this Debenture are used for
convenience only and are not to be considered in construing or interpreting this
Debenture.
11
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: March __, 2001
World Wide Wireless Communications, Inc.
By:
-------------------------------------
Douglas P. Haffer, President & CEO
Attest:
- ---------------------------------
12
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________ of
the principal amount of the above Debenture No. ___ into Shares of Common Stock
of World Wide Wireless Communications, Inc. (the "Company") according to the
conditions hereof, as of the date written below.
Date of Conversion* ____________________________________________________________
Conversion Price * ____________________________________________________
Accrued Interest________________________________________________________________
Signature_______________________________________________________________________
[Name]
Address:________________________________________________________________________
________________________________________________________________________
* If such conversion represents the remaining principal balance of the
Debenture, the original Debenture must accompany this notice within three (3)
Trading Days.
13