THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE
OPINION OF COUNSEL FOR THE COMPANY REGISTRATION UNDER THE ACT IS UNNECESSARY IN
ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT.
World Wide Wireless Communications, Inc.
CONVERTIBLE UNSECURED DEBENTURE
$740,000 SEPTEMBER 30, 1999
FOR VALUE RECEIVED, subject to the terms and conditions set
forth below, World Wide Wireless Communications, Inc., a Nevada corporation (the
"Company"), whose address is 520 Third Street, Suite 101, Oakland, California
hereby promises to pay to the order of Credit Bancorp, Netherland Antilles
Corporation, (the "Payee"), the principal sum of SEVEN HUNDRED FORTY THOUSAND
DOLLARS ($740,000), together with interest on the outstanding principal balance
remaining unpaid from time to time from and after the date hereof until paid in
full at the rate of seven percent (7%) per annum, payable semiannually in
arrears on the last day of each February and each September 30, commencing
September 30, 1999 and on the maturity date hereof, computed on actual days
elapsed in a 365 day year. The outstanding principal balance, together with all
accrued and unpaid interest, will be due and payable on September 30, 2002.
All payments on account of principal and interest will be made
in lawful money of the United States of America to the address of the Payee set
forth on the Schedule of Purchasers attached to the Purchase Agreement (as
defined herein), or at such other place as the holder hereof may from time to
time designate in writing to the Company.
The Payee and each subsequent holder or holders hereof (any such
person being referred to herein as the "Holder" and all holders being referred
to herein as "Holders") by acceptance of the Debenture each agree to the
following terms and conditions:
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1. PRINCIPAL PAYMENTS.
1.1. Pro Rata Payments. Any and all payments under the Debenture, whether
at the election of the Company, upon maturity or following an Event
of Default (as defined in Section 3), will be made by the Company
prorata to all Holders.
1.2. Optional Prepayments. The Company may prepay the Debenture in whole
or in part without penalty. Prepayments will be applied first toward
repayment of accrued interest first, and any amount remaining
thereafter toward the repayment of principal. If a prepayment is
made other than on a dat when interest payments are due, the
semi-annual interest payment for the period in which the prepayment
was made will be prorated through the date of prepayment. If the
Holder has exercised its right to convert some or all of the
principal or interest into Common Stock before payment is made, the
Company may not prepay those amounts but, instead, will issue shares
of Common Stock for the amount converted in accordance with this
Debenture.
1.3. Procedures. Upon receipt of any prepayment of principal, the Holder
will promptly endorse and surrender this Debenture to the Company
for cancellation. If the Company prepays some but not all of the
principal, the Company will without charge to the Holder promptly
execute and deliver to the Holder a debenture for the unpaid balance
of the principal. Following the date of prepayment, interest will be
payable only on the portion of the principal which was not prepaid.
2. CONVERTIBILITY.
2.1. Right to Convert. Subject to the provisions of this Debenture, all
amounts of unpaid principal and accrued interest are convertible
into Common Stock at any time at the election of the Holder.
2.2. Conversion - Public Offering. All amounts of unpaid principal and
interest will be converted following five (5) days notice thereof to
the Company, into Common Stock of the Company (the "Common Stock")
at a conversion price of $1.60 per share (the "Conversion Price").
The Conversion Price will be subject to adjustments pursuant to
Section 2.6.
2.3. Mechanics of Conversion. This Debenture may be converted in full or
in part by the Holder, pursuant to Section 2.1-2.2, by surrender of
this Debenture to the Company at the address set forth
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above, with a notice of conversion in the form of Exhibit A hereto
duly executed by the Holder (specifying the portion of the principal
amount and the accrued and unpaid interest, if any, to be converted
in the case of a partial conversion).
2.3.1. Surrender of Debenture. To convert any amount owing under
this Debenture into Common Stock, the Holder must surrender
this Debenture at the principal executive office of the
Company, accompanied by a written notice setting forth the
amount of principal and interest being converted. If less
than the entire principal is being converted, the Company
will issue to the Holder a replacement Debenture setting
forth the amount of unpaid principal and otherwise containing
the same terms and conditions as this Debenture.
2.3.2. Issuance of Shares. Following compliance with the procedures
set forth in Section 2.3.1, the Company will issue to the
Holder a certificate evidencing the number of shares of
Common Stock to which the Holder is entitled.
2.3.3. Fractional Shares. In lieu of issuing any fractional shares,
the Company may at its option pay to the Holder cash equal to
the market price for the shares if there is a public market
for the Common Stock.
2.4. Early Termination of Conversion Option. The right of the Holder to
convert any interest or principal into Common Stock will terminate
immediately, notwithstanding the fact that such right could
otherwise be exercised, two (2) business days prior to the
occurrence of any of the following events (hereafter defined as
"Events"):
(i) the merger or consolidation of the Corporation, whether or
not the Corporation is the surviving entity, if the
beneficial owners of the outstanding voting securities of the
Corporation immediately prior to the merger or consolidation
as a group are the beneficial owners of less than 50% of the
surviving entity's outstanding voting securities immediately
after the merger or consolidation;
(ii) the sale, exchange or transfer of all or substantially all of
the assets of the Issuer other than in the ordinary course of
business; or
(iii) the dissolution or liquidation of the Issuer.
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The Company will provide the Holder with notice of any Event no
later than ten (10) business days before that Event occurs. The
right of the Holder to convert principal or interest into Common
Stock will not be canceled if the party acquiring the Company's
stock or assets was an affiliate of the Company immediately prior to
an Event or is a person, group or other entity which beneficially
owned more than twenty percent (20%) of the Issuer's outstanding
voting securities immediately prior to that Event.
2.5. Adjustments to Conversion Price. The Conversion Price will be $1.60
per share subject to an adjustment in the case of stock splits,
reverse stock splits, stock dividends, or the reclassification of
securities.
2.5.1. Notice of Adjustment. Whenever the Conversion Price or the
number of shares of Common Stock issuable upon conversion of
the Debenture will be adjusted as provided in this Section
2.5, the Company will forthwith file, at its principal office
or at such other place as may be designated by the Company, a
statement, signed by its chief executive officer or chief
financial officer, showing in detail the facts requiring such
adjustment and the Conversion Price and/or the number of
shares of Common Stock issuable upon Conversion of the
Debenture, as the case may be, that will be in effect after
such adjustment. The Company will within 15 days of any
adjustment to the Debentures cause a copy of such statement
to be sent by first-class, certified mail, return receipt
requested, postage prepaid, to each Holder of Debentures at
such Holder's address appearing in the Company's records.
2.5.2. Stock Splits and Combinations. In the event the outstanding
Common Stock will be subdivided into a greater number of
shares of Common Stock, the Current Conversion Price will,
simultaneously with the effectiveness of such subdivision, be
proportionately reduced, and conversely, in case the
outstanding Common Stock will be combined into a smaller
number of shares of Common Stock, the Current Conversion
Price will, simultaneously with the effectiveness of such
combination, be proportionately increased. In addition, if
the Company declares a stock dividend payable in the form of
common stock, the conversion price will be reduced by an
amount equal to the percentage increase in the total
outstanding shares of the company resulting from that stock
dividend.
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2.5.3. Reclassification of Securities. In the event that the
Company's Common Stock is reclassified or exchanged for
another type or class of security without payment of
consideration or otherwise changed, the Holder may convert
this Debenture into the same type and class of security as
the holders of the Common Stock received as a result of that
reclassification, exchange or change. The Conversion Price
for such security will be proportionally adjusted to reflect
the increase or decrease in the number of shares outstanding
as a result of that reclassification, exchange or change.
2.6. Reservation of Stock. The Company will at all times reserve and keep
available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the principal
amount and accrued and unpaid interest of this Debenture, such
number of shares of Common Stock as will from time to time be
sufficient to effect such conversion. If at any time the number of
authorized but unissued shares of Common Stock will not be
sufficient to effect such conversion, the Company promptly will take
all such corporate action as will be necessary and appropriate to
increase such number to the number sufficient for such purpose.
3. SUBORDINATION.
The right of the Holder to receive payment of any principal or interest is
subject and subordinate to the prior payment of any other indebtedness
currently owed by or hereafter incurred by the Company other than any
indebtedness currently or hereafter owed to any director or officer of the
Company (hereafter "Senior Indebtedness"). During the continuance of any
default in the payment of principal or interest on any Senior Indebtedness,
no payment of principal or interest will be made on or with respect to this
Debenture if written notice of such default has been given to the Company by
any holder or holders of any Senior Indebtedness. In the event of any
insolvency, bankruptcy, receivership, or liquidation involving the Company,
the holders of Senior Indebtedness will be entitled to receive payment in
full of all principal and interest on all Senior Indebtedness before the
Holder will be entitled to receive any payment of principal or interest.
4. EVENTS OF DEFAULT.
If any of the following events occur ("Events of Default"), all unpaid
principal and accrued interest will become immediately due and payable:
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(i) Voluntary Bankruptcy. The Company files a petition for
bankruptcy;
(ii) Involuntary Bankruptcy. A creditor of the Company files a
petition for bankruptcy with respect to the Company and that
petition is not discharged within 90 days of the date of
filing;
(iii) Assignment for Benefit of Creditors. The Company makes an
assignment for the benefit of creditors or a receiver is
appointed with respect to the Company;
(iv) Dissolution. The Company dissolves or commences the
liquidation of its entire business; or
(v) Sale of Assets. The Company sells, assigns or transfers all
or substantially all of its assets other than in the ordinary
course of business, provided that it will not be considered
an Event of Default if the purchaser of those assets agrees
to assume all obligations of the Company with respect to the
payment of principal and interest under this Debenture.
5. MISCELLANEOUS.
5.1. Securities Laws Compliance. This Debenture and the shares of Common
Stock to be issued hereunder have not been registered under the
Securities Act of 1933 (the "Act") pursuant to an exemption to the
registration requirements contained in Section 4(2) of the Act, nor
have they been registered or qualified under any state securities
laws. The Compan reserves the right to condition the issuance of any
shares under this Debenture upon the receipt of such information
from the Holder so as to allow the Company to verify that the
exemption i available as of the date of conversion. The Holder of
this Debenture acknowledges that it is acquiring this Debenture for
investmen only and not with a view toward the resale or distribution
of this Debenture or the Common Stock issuable upon conversion
hereof.
5.2. Restrictive Legend. Each certificate for the securities issued upon
conversion of all or a portion of the principal amount and accrued
and unpaid interest of this Debenture and the Common Stock issued
upon conversion thereof will bear a legend on its face substantially
in the following form:
THIS DEBENTURE AND THE SHARES TO BE ISSUED
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HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THAT ACT OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY
THAT REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 UNDER THE ACT.
5.3. Replacement. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Debenture
(provided that an affidavit of the Holder will be satisfactory for
such purpose), and of indemnity satisfactory to it, and upon
surrender and cancellation of this Debenture, if mutilated, the
Company will make and deliver a new Debenture of like tenor in a
principal amount equal to the outstanding principal balance of this
Debenture. Any Debenture so issued will be dated as of the last date
at which principal or interest has been paid upon this Debenture.
5.4. Cancellation. Upon payment in full of all principal and interest
payable hereunder, or in the event the Holder converts the entire
principal and interest amount hereof into Stock, this Debenture will
be surrendered to the Company for cancellation.
5.5. Transferability of Debenture. This Debenture may be sold, assigned,
or otherwise transferred, provided that such transfer is conducted
in accordance of Rule 144 of the Securities and Exchange Commission,
is otherwise exempt from the registration requirements of the Act or
if this Debenture is registered under the Act.
5.6. Governing Law/Forum. This Agreement will be governed by and
construed under the laws of the State of California, exclusive of
any conflicts of laws principles which would apply the laws of any
other jurisdiction. The parties agree that any action to enforce or
construe this Agreement will be brough in the state courts in the
County of San Francisco, State of California, or in the Federal
Courts of the Northern District of California. Each party waives all
objections to the bringing of such an action in that forum based on
lack of personal jurisdiction, improper venue or forum
non-conveniens.
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5.7. Amendment and Waiver. Any provision of the Debenture ma be amended
or waived by a writte instrument signed by the Company and by
Holders of at least 66-2/3 of the then outstanding aggregate
principal amount of Debentures, such amendment or waiver to be
effective with respect to all of the Debentures but only in the
specific instance and for the specific purpose for which the
amendment or waiver is made or given; provided, however, tha no such
amendment or waiver will without the prior written consent of the
Holders of all of the then outstanding aggregate principal amount of
Debentures, modify the principal amount, rate of interest, form and
place of payment, conversion or maturity of the Debenture, or the
percentage required to effect amendment of the Debenture.
5.8. No Rights as a Shareholder. This Debenture will not give the Holder
any right to vote in any matter submitted for consideration by the
shareholders or any other right of a shareholder of the company.
5.9. Market Standoff Agreement. The Compan and the Shareholders agree
that, in connection with any public offering of the Company's stock
(regardless of whether the offering is registered under the
Securities Act of 1933, as amended (the "Act") or exempt from
registration) the Shareholders will not sell or otherwise dispose of
any of their Stoc without the prior written consent of the Company
or the underwriter dispose of any of their Stock without the prior
written consen of the Company or the underwriter may specify;
provided that such period will not exceed 180 days after the
completion of the offering.
5.10. Waiver. No delay on the part of the Holder in exercising any right
hereunder will operate as a waiver of such right under this
Debenture.
5.11. Presentment. Presentment, protest, notice of protest, notice of
dishonor, and notice of nonpayment are waived by the Company with
respect to any amounts due hereunder, and any rights to direct the
Company hereunder, and any right t require proceedings against
others or to require exhaustio of security, are waived.
5.12. Notice. Notices and other communications required or permitted to be
given hereunder will be in writing and will be conclusively deemed
effectively given upon personal delivery or confirmed facsimile
transmission, or five days after deposit in United States Mail, by
registered or certified mail, postage prepaid, or one day
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after forwarding through a nationally recognized air courier
service, addressed
(i) if to the Company, at [ADDRESS TO BE PROVIDED]
(ii) if to Payee at, [ADDRESS TO B PROVIDED], Payee's address as
set forth in the Schedule of Purchasers attached to the
Purchase Agreement, or at such other address as the Company
or Payee may designate by ten (10) days, advance written
notice to the other party given in the manner herein
provided.
World Wide Wireless Communications, Inc.
- -----------------------------
By: Douglas P. Haffer
Title: President
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EXHIBIT A
Notice of Conversion
TO: World Wide Wireless Communications, Inc.
The undersigned, being the holder of the Convertible Debenture, dated September
30, 1999 made by you for the principal amount of $740,000 (the "Debenture"),
hereby surrenders the Debenture to you for conversion into shares of Common
Stock issued by you ("Stock"), such conversion to be in accordance with the
terms and provisions of Section 2 of the Debenture. The principal amount to be
converted upon surrender of the Debenture is $____________ and the accrued and
unpaid interest amount to be converted upon the surrender of the Debenture
(unless paid within five days after this Notice) is $___________. The
undersigned hereby requests that a certificate evidencing the shares of Common
Stock to be issued upon such conversion be issued in the name of
Dated: , 1999
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(Name of Holder)
By:
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(Name)
- ---------------------------
(Title)
(Address)
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C:\TEMP\WWW Communications Inc. - Convertible Debenture(2).WPD
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