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EXHIBIT 10.38
APPENDIX C
LOAN AGREEMENT
This Loan Agreement dated as of the 17th day of May, 2001 by and between
Lancer Offshore, Inc., a British Virgin Islands corporation (the "Lender") and
World Wireless Communications, Inc., a Nevada corporation, having an address at
5670 Greenwood Boulevard, Penthouse, Greenwood Village, Colorado 80111 (the
"Borrower").
WHEREAS, the Lender is willing to lend to Borrower funds to enable Borrower
to conduct its business operations; and
WHEREAS, Borrower wishes to borrow funds from Lender in order to conduct
such operations;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
OBLIGATIONS
1.1 (a) Simultaneously with the execution and the delivery of this
Agreement, Lender agrees to lend to Borrower the aggregate sum of $2,250,000, of
which (i) the sum of $1,125,000 shall be paid to Borrower upon the execution and
the delivery of this Agreement and (ii) the sum of $1,125,000 shall be paid to
Borrower on July 15, 2001, provided that Borrower has raised the sum of
$2,000,000 in equity from persons other than Michael Lauer and his affiliates,
including without limitation, Lancer Offshore Inc., Lancer Partners, L.P., and
The Orbiter Fund Ltd.(such loan, together with any other amounts loaned pursuant
to this Agreement from time to time, shall be referred to collectively as the
"Loan"). The Loan shall be used solely by Borrower in the operation of its
business as determined by the President of Borrower, subject to supervision
thereof by Board of Directors of Borrower. The Loan shall be repaid on September
15, 2001 unless it is mandatorily converted into shares of Borrower's Common
Stock before that date as provided in Section 1.5 hereof.
1.2 The Loan shall bear simple interest at the rate of 15% per annum
payable on the maturity date of the Loan ( unless the Loan is mandatorily
converted into shares of Borrower's Common Stock, in which event such interest
shall be
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extinguished), and shall include any additional expenses payable hereunder or
under, the Note (as defined in Section 1.3 hereof).
1.3 Simultaneously with the execution and delivery of this Agreement,
Borrower shall deliver to Lender an executed original of the note in the form of
Exhibit A attached hereto for the amount loaned to Borrower by Lender to date,
and Borrower shall deliver such additional notes to evidence any future
borrowing from Lender from time to time (individually a "Note" and collectively
the "Notes").
1.4 Simultaneously with the execution and the delivery of this Agreement,
Borrower shall deliver to Lender an executed original of the warrants in the
form of Exhibit B attached in consideration for the amount loaned to Borrower by
Lender, and Borrower shall deliver such additional required warrants in
connection with any future borrowing hereunder (individually a "Warrant" and
collectively the "Warrants").
1.5 (a) The Loan shall be mandatorily converted into shares of the Common
Stock of Borrower at the rate of one share per each $0.50 principal amount of
debt (subject to adjustment for stock dividends, stock splits and reverse stock
splits, if any) immediately upon the approval of such conversion by Borrower's
shareholders at a meeting of shareholders held for such purpose (among other
purposes).
(b) The shares of Borrower's Common Stock issuable upon the exercise of
the Warrants shall be not issued prior to the approval of such issuance by
Borrower's shareholders at a meeting of shareholders held for such purpose
(among other purposes).
1.6 Simultaneously with the execution and the delivery of this Agreement,
Lender and Borrower will execute and deliver the Pledge/Security Agreement
attached hereto as Exhibit C (the "Pledge/Security Agreement").
1.7 Simultaneously with the execution and the delivery of this Agreement,
Lender and Borrower will execute and deliver the Registration Rights Agreement
attached hereto as Exhibit D (the "Registration Rights Agreement").
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EACH LENDER
Lender represents and warrants to Borrower that:
2.1 Power and Authority. Lender is a corporation duly organized, validly
existing entity in good standing under the laws of its state of formation; has
all requisite power and authority to carry on the business in which it is
engaged; owns its assets; and has the power and authority to execute and deliver
this Agreement and to perform all of its respective obligations hereunder.
2.2 Authorization. This Agreement has been duly and validly authorized,
executed and delivered by Lender; and this Agreement constitutes the valid and
binding obligation of Lender and is enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
2.3 No Violations. Neither the execution and delivery of this Agreement,
nor the performance of any of their respective obligations hereunder will
violate (or, with the passage of time, will violate) any material term,
covenant, condition, or provision of any contract (written or unwritten) or any
document, certificate of incorporation, by-law, judgment, decree, order, or
regulation of any court or governmental or regulatory authority by which Lender
is bound or subject.
2.4 Brokers and Finders. Neither Lender nor any of its officers, directors
or employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BORROWER
3.1 Corporate Organization; Power and Authority. Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has full corporate power and authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns; is duly qualified or licensed to do business as a foreign corporation
in good standing in each jurisdiction in which Borrower's failure to qualify to
do business will have a material adverse effect on the business, prospects,
operations, properties, assets or condition (financial or otherwise) of
Borrower. The copies of the Certificate of Incorporation and By-Laws of Borrower
heretofore delivered
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to Lender are complete and correct copies of such instruments as presently in
effect.
3.2 Authorization Borrower has full corporate power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby. The
Board of Directors of Borrower has taken all action required by law, Borrower's
Certificate of Incorporation, its By-Laws or otherwise to be taken by them to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, including, without limitation, the
issuance of the Notes and the Warrants, and this Agreement is a valid and
binding agreement of Borrower enforceable in accordance with its terms, except
that such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights.
3.3 No Violations. Neither the execution and delivery of this Agreement,
nor the performance of any of their respective obligations hereunder will
violate (or, with the passage of time, will violate) any material term,
covenant, condition, or provision of any contract (written or unwritten) or any
document, certificate of incorporation, by-law, judgment, decree, order, or
regulation of any court or governmental or regulatory authority by which
Borrower is bound or subject.
3.4 Capitalization. As of the date hereof, the authorized capital stock of
Borrower consisted of 50,000,000 shares of common stock, $.001 par value per
share, of which 31,222,181 shares were issued and outstanding, and, 1,000,000
shares of preferred stock, par value $.001 per share, of which no shares were
issued and outstanding. All issued and outstanding shares of capital stock of
Borrower are validly issued, fully paid and nonassessable, and all securities of
the Borrower have been issued in compliance with all applicable state and
federal securities laws. As of the date hereof, Borrower had outstanding (a)
securities convertible into or exchangeable for Borrower common stock, (b)
options, warrants or other rights to purchase or subscribe for common stock or
securities convertible into or exchangeable for common stock of Borrower, or (c)
contracts, commitments, agreements, understandings or arrangements of any kind
relating to the issuance of any common stock of the Borrower, any such
convertible or exchangeable securities or any such options, warrants or rights,
totaling 2,286,287 shares, and (d) contingent commitments to issue warrants to
Harvard Management Company, and Reef Management Corp.
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3.5 Financial Statements; SEC Filings. (a) Borrower has heretofore
delivered to Lender an audited financial statement of the Company and its
subsidiaries for the year ended December 31, 2000 (the "Financial Statement"),
receipt of which is hereby acknowledged. The Financial Statement and the notes
thereto are true, complete and accurate and fairly present the assets,
liabilities and financial condition of Borrower as at the date thereof, and such
statement of income and the notes thereto are true, complete and accurate and
fairly present the results of operations for the period therein referred to all
in accordance with generally accepted accounting principles consistently applied
throughout the period involved.
(b) Borrower has heretofore delivered to each Lender a copy of the Form
10-Q filed by Borrower with the Securities and Exchange Commission for the
quarter ended March 31, 2001, receipt of which is acknowledged.
3.6 Title to Properties; Encumbrances. Borrower has good, valid and
marketable title to all the properties and assets which it purports to own
(real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statement
and all the properties and assets purchased by Borrower since the date of the
Financial Statement. Except as set forth in the Financial Statement or reflected
therein as a capital lease, all such properties and assets are free and clear of
all title defects or objections, liens, claims, charges, security interests or
other encumbrances of any nature whatsoever, including, without limitation,
leases, chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements, and are not, in
the case of real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations or limitations of any nature
whatsoever except, with respect to all such properties and assets, (a) liens
shown on the Financial Statement as securing specified liabilities or
obligations and liens incurred in connection with the purchase of property
and/or assets, if such purchase was effected after the date of the Financial
Statement, with respect to which no default exists; (b) minor imperfections of
title, if any, none of which is substantial in amount, materially detracts from
the value or impairs the use of the property subject thereto, or impairs the
operations of Borrower and which have arisen only in the ordinary course of
business and consistent with past practice since the date of the Financial
Statement; and (c) liens for current taxes not yet due. With respect to the
property and assets it leases, Borrower is in compliance with such
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leases, and Borrower holds valid leasehold interests in such property and assets
free of any liens, encumbrances and security interests of any party other than
the lessors of such property and assets.
3.7 Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the best knowledge of
Borrower, threatened against or involving Borrower, which challenges the
validity of this Agreement or any action taken or to be taken by Borrower
pursuant to this Agreement or in connection with the transactions contemplated
hereby; and Borrower does not know or have any reason to know of any valid basis
for any such action, proceeding or investigation.
3.8 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained or made by
Borrower in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, except
that approval of Borrower's shareholders at a meeting of shareholders is
required prior to, and as a condition to, the issuance of any shares of
Borrower's Common Stock upon the mandatory conversion of the Loan or the
exercise of the Warrants.
3.9 Brokers and Finders. Neither Borrower nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement, except for any liability
which Borrower has to Sterling Technology Partners and Shamrock Partners, Ltd.
relating thereto.
3.10 Subsidiaries. Borrower does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or have any
direct or indirect equity or ownership interest in any other business, except in
its wholly-owned subsidiaries and other entities listed in Section 3.10 of the
Disclosure Schedule.
3.11 Taxes. Borrower has filed all tax returns that are required to have
been filed in any jurisdiction, and has paid all taxes shown to be due and
payable on such returns and all the taxes and assessments levied upon it or its
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have
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become delinquent, except for taxes and assessments the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which Borrower has established adequate
reserves. To the best of Borrower's knowledge, there are no tax examinations in
progress involving Borrower for any fiscal period or periods, and no notice of
any claim for taxes, whether pending or threatened, has been received, and no
requests for waivers of the time to assess any such taxes are pending.
3.12 Affiliate Transactions. Except as set forth on Section 3.12 of the
Disclosure Schedule, Borrower is not party to any contract with any Affiliate of
Borrower. "Affiliate" shall mean, with respect to Borrower, any person or entity
that directly or indirectly controls, is controlled by, or is under common
control with Borrower. For purposes of this definition, "control" of an entity
shall mean the power, directly or indirectly, either to (i) vote 10% or more of
the securities having ordinary voting power for the election of directors of
such entity or (ii) direct or cause the direction of the management and policies
of such entity, whether through the ownership of voting securities, by contract
or otherwise. Section 3.12 of the Disclosure Schedule sets forth a complete and
accurate list of all of the Affiliates of Borrower.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notices. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
certified mail, return receipt requested to the party entitled to receive the
same, if to the Borrower, World Wireless Communications, Inc., 5670 Greenwood
Plaza Boulevard, Penthouse, Greenwood Village, Colorado 80111, with a copy to
Law Offices of Stephen R. Field, 240 Madison Avenue, New York, New York, Attn:
Stephen R. Field, Esq.; and if to Lender, at its address as set forth in the
books and records of the Borrower. Any party may change his or its address by
giving notice to the other party
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stating his or its new address. Commencing on the 10th day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.
4.2 Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Colorado, without regard to its conflicts of law principles. All parties hereto
(i) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement shall be instituted only in a federal or state court in
Denver, Colorado, (ii) waive any objection which they may now or hereafter have
to the laying of the venue of any such suit, action or proceeding, and (iii)
irrevocably submit to the jurisdiction of any federal or state court in Denver,
Colorado in any such suit, action or proceeding, but such consent shall not
constitute a general appearance or be available to any other person who is not a
party to this Agreement. All parties hereto agree that the mailing of any
process in any suit, action or proceeding in accordance with the notice
provisions of this Agreement shall constitute personal service thereof.
4.3 Entire Agreement; Waiver of Breach. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
4.4 Binding Effect; Assignability. This Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of the
parties and their respective heirs,
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successors and permitted assigns. This Agreement and the rights of the parties
hereunder shall not be assigned except with the written consent of all parties
hereto.
4.5 Captions. Captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provision hereof.
4.6 Number and Gender. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in either the masculine, the feminine or the
neuter gender shall include the masculine, feminine and neuter.
4.7 Severability. If any provision of this Agreement shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
4.8 Amendments. This Agreement may not be amended except in a writing
signed by all of the parties hereto.
4.9 Survival of Representations and Warranties. The representations and
warranties of each party hereto shall survive the execution and the delivery of
this Agreement until one year from the date hereof.
WORLD WIRELESS COMMUNICATIONS, INC.
By: /s/ David D. Singer
-------------------------------
David D. Singer, President
BORROWER
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LOAN AMOUNT LENDER
$2,250,000 initially LANCER OFFSHORE, INC.
By: /s/ Michael Lauer
-------------------------------
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PROMISSORY NOTE
$1,125,000 Greenwood Village, Colorado
May 17, 2001
1. Amount; Maturity. FOR VALUE RECEIVED, the undersigned, World Wireless
Communications, Inc. (the "Maker"), promises to pay to the order of Lancer
Offshore, Inc., (the "Holder"), the principal sum of One Million One Hundred
Twenty-five Thousand ($1,125,000), which principal sum shall mature on September
15, 2001, unless such sum is mandatorily converted into shares of the Maker's
Common Stock prior to such date, and shall bear simple interest at the rate of
15%, payable on maturity (unless the principal sum hereof is mandatorily
converted into the Maker's Common Stock as provided in Section 3 hereof, in
which event such interest shall be due and payable).
2. Mode of Payment. All payments of principal and interest due under
this Note shall be made in legal tender in the United States of America for the
payment of private and public debts and delivered to the Holder at or, at the
option of the Holder, in such other manner and at such other place as the Holder
shall have designated to the Maker in writing.
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3. Conversion. Notwithstanding anything contained in this Note to the
contrary, the loan evidenced by this Note shall be mandatorily converted into
shares of the Maker's Common Stock at the rate of one share of Common Stock for
each $0.50 of principal amount of debt, including interest (subject to
adjustment for stock dividends, stock splits and reverse stock splits, if any)
immediately upon (i) the approval of such mandatory conversion by the Maker's
shareholders at a meeting of shareholders and (ii) the receipt by the Maker of
$2,000,000 in equity from persons other than Michael Lauer and his affiliates,
Lancer Offshore, Inc., Lancer Partners L.P. and the Orbiter Fund Ltd. on or
before December 31, 2001.
4. Prepayment.
(a) This Note may be voluntarily prepaid, without penalty or premium, in
whole or in part, at any time and from time to time. Any prepayment must include
all accrued interest on the principal being prepaid, through the date of
prepayment.
(b) Notwithstanding anything contained herein to the contrary, the
Maker shall prepay the amount due hereunder out of 25% of the proceeds received
from any license agreement entered into by the Maker, which amount shall be paid
within 10 days after the receipt thereof by the Maker.
5. Acceleration upon Event of Default. This Note may be accelerated at the
option of the Holder, upon the occurrence of any event of default as
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described below:
(a) any default, whether in whole or in part, shall occur in the
payment to the Holder of principal, interest or other item comprising the Note
as and when due which shall continue for a period of 10 days after the receipt
of written notice by the Maker thereof;
(b) any default, whether in whole or in part, shall occur in the due
observance or performance of any other covenant, term or provision to be
performed by the Maker under the Loan Agreement between the Maker and the Holder
dated as of May 17, 2001, which default is not described in any other subsection
of this Section, and such default shall continue for a period of 10 days after
the receipt of written notice by the Maker; provided, however, that if the Maker
shall have commenced to cure such default within such 10-day period and shall
proceed continuously in good faith and with due diligence to cure such default,
then such period instead shall be 30 days;
(c) The Maker shall (1) make a general assignment for the benefit of
its creditors, (2) apply for or consent to the appointment of a receiver,
trustee, assignee, custodian, sequestrator, liquidator or similar official for
itself or any of its assets and properties, (3) commence a voluntary case for
relief as a debtor under the United States Bankruptcy Code (4) file with or
otherwise submit to any governmental authority any petition, answer or other
document seeking (A) reorganization, (B) an arrangement with creditors or (C) to
take advantage of any
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other present or future applicable law respecting bankruptcy, reorganization,
insolvency, readjustment of debts, relief of debtors, dissolution or
liquidation, (5) file or otherwise submit any answer or other document admitting
or failing to contest the material allegations of a petition or other document
filed or otherwise submitted against it in any proceeding under any such
applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of
competent jurisdiction; or
(d) any case, proceeding or other action shall be commenced against the
Maker for the purpose of effecting, or an order, judgment or decree shall be
entered by any court of competent jurisdiction approving (in whole or in part)
anything specified in of Section 5(d) hereof, or any receiver, trustee,
assignee, custodian, sequestrator, liquidator or other official shall be
appointed with respect to the Maker, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the
assets and properties of the Maker, and any of the foregoing shall continue
unstayed and in effect for any period of 60 days.
6. Delay in Exercise of Rights. No delay on the part of the Holder in
exercising any of its options, powers or rights nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of the Holder of
any of its options, powers or rights shall constitute a waiver of any other
option, power or right.
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7. Waiver of Presentment; No Offsets. The Maker hereby waives presentment
for payment, dishonor, protest, notice of protest and any demand whatsoever with
respect to this Note and the right to interpose any defense based upon any
statute of limitation or any claim of laches and any set-off or counterclaim of
any nature or description.
8. Collection Costs; Maximum Interest Limitations.
(a) The Maker agrees to pay all reasonable costs, including all
attorneys' fees and disbursements incurred by the Holder in collecting or
enforcing payment of this Note in accordance with its terms.
(b) After this Note becomes due, at stated maturity or on acceleration,
any unpaid balance hereof shall thereafter bear interest until paid at a rate of
16% simple interest per annum, but such interest rate shall not exceed at any
time the maximum interest rate allowable under applicable state usury laws.
9. Governing Law.
(a) This Note and the rights of the parties hereunder shall be governed
by and construed in accordance with the laws of the State of Colorado, without
regard to its conflicts of law principles. All parties hereto (i) agree that any
legal suit, action or proceeding arising out of or relating to this Note shall
be instituted only in a federal or state court in Denver, Colorado, (ii) waive
any objection which they may now or hereafter have to the laying of the venue of
any such suit, action or proceeding, and (iii) irrevocably submit to the
exclusive
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jurisdiction of such federal or state court in Denver, Colorado in any such
suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this Note.
All parties hereto agree that the mailing of any process in any suit, action or
proceeding in accordance with the notice provisions of this Note shall
constitute personal service thereof.
(b) THE MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING RELATED IN ANY WAY TO THIS NOTE.
10. Notices. All notices or other communications required or permitted to
be given pursuant to this Note shall be in writing and shall be considered as
duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) five days after
mailing if mailed by registered or certified mail, return receipt requested to
the party entitled to receive the same, if to the Holder, at his or its address
on the books and records of the Maker; and if to the Maker, c/o World Wireless
Communications, Inc., 5670 Greenwood Plaza Boulevard., Penthouse, Greenwood
Village, Colorado 80111, with a copy to Law Offices of Stephen R. Field, 240
Madison Avenue, Third Floor, New York, New York, Attn: Stephen R. Field, Esq.,
facsimile number (212) 681-0845. Any party may change his or its address by
giving notice to the other party stating its new address. Commencing on the
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10th day after the giving of such notice, such newly designated address shall be
such party's address for the purpose of all notices or other communications
required or permitted to be given pursuant to this Note.
11. Severability. If any provision of this Note shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Note, and this Note shall be carried out
as if any such invalid or unenforceable provision were not contained herein.
12. Amendment. This Note shall not be amended without the prior written
consent of the Holder.
WORLD WIRELESS
COMMUNICATIONS, INC.
By: /s/ DAVID D. SINGER
-------------------------------------
David D. Singer, President
MAKER
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THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK ISSUABLE UPON ITS
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE OR TRANSFER THEREOF MAY
BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
No.T-1
WORLD WIRELESS COMMUNICATIONS, INC.
Common Stock Purchase Warrant
World Wireless Communications, Inc., a Nevada corporation (the "Company"),
hereby certifies that, for value received, Lancer Offshore, Inc. ("Lancer"), or
registered permitted assigns, is entitled, subject to the terms set forth below,
to purchase from the Company at any time or from time to time before 5:30 P.M.,
Central Mountain time, on May 16, 2006, Five Hundred Sixty Two Thousand Five
Hundred (562,500) shares of fully paid and nonassessable shares of Common Stock,
$.001 par value, of the Company, at a purchase price per share of $0.50 (such
purchase price per share as adjusted from time to time as herein provided is
referred to herein as the "Purchase Price"). The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company issued pursuant to the loan agreement, including the exhibits thereto,
between Lancer and the Company dated as of May 17, 2001, as amended (the "Loan
Agreement"), a copy of which is on file at the principal office of the Company.
As used herein the following terms, unless the context otherwise requires
have the following respective meanings:
(a) The term "Company" shall include World Wireless Communications, Inc.
and any
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corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.001 par
value per share, as authorized on the date of the Agreement and any other
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1 Full Exercise. This Warrant may be exercised in full by the holder
hereof by surrender of this Warrant, with the form of subscription at the end
hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment, in cash or by certified or official bank check payable
to the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock for which this Warrant is then exercisable by the
Purchase Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised in part by surrender
of this Warrant in the manner and at the place provided in Section 1. 1 except
that the amount payable by the holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subscription at the end hereof by (b) the
Purchase Price then in effect. On any such partial exercise the Company at its
expense will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of like tenor, in the name of the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock for which such Warrant or Warrants may still be
exercised.
1.3. Trustee for Warrantholders. In the event that a bank or trust company
shall have been appointed as trustee for the holders of the Warrants pursuant to
Section 4.2, such bank or trust company shall have all the powers and duties of
a warrant agent appointed pursuant to Section 12 and shall accept, in its own
name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section 1.
2. Delivery of Stock Certificates. etc. on Exercise. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
10 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which such holder shall be entitled on such exercise,
plus, in lieu of any fractional share to which such holder would otherwise be
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20
entitled, cash equal to such fraction multiplied by the then current market
value of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.; Reclassification,
etc. In case at any time or from time to time, the holders of Common Stock shall
have received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property (other than
cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings or
earned surplus of the Company), or
(c) other or additional stock or other securities or property (including
cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization. In case at any time or from time to time, the Company
shall (a) effect a reorganization, (b) consolidate with or merge into any other
person or party, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately
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prior thereto, all subject to further adjustment thereafter as provided in
Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrants after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust company having
its principal office in Denver, Colorado, as trustee for the holder or holders
of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in this
Section 4, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Adjustment for Issue or Sale of Common Stock at Less Than The Purchase
Price in Effect.
5.1 General. If the Company shall, at any time or from time to time, issue
any additional shares of Common Stock (other than shares of Common Stock
excepted from the provisions of this Section 5 by Section 5.4) for a Net
Consideration Per Share less than the Purchase Price in effect immediately prior
to such issuance, then, and in each such case:
(a) the Purchase Price shall be lowered to an amount determined by
multiplying such Purchase Price then in effect by a fraction:
(1) the numerator of which shall be (a) the number of shares of
Common Stock outstanding (excluding treasury shares, but including for this
purpose shares of Common Stock issuable upon the exercise of the Warrants)
immediately prior to the issuance of such additional shares of Common Stock,
plus (b) the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Company for the total number of such
additional shares of Common Stock so issued would purchase at the Purchase Price
in effect immediately prior to such issuance, and
(2) the denominator of which shall be (a) the number of shares of
Common Stock outstanding (excluding treasury shares, but including for this
purpose shares of Common Stock issuable upon the exercise of the Warrants)
immediately prior to the issuance of such additional shares of Common Stock,
plus (b) the number of such additional shares of Common Stock so issued; and
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22
(b) the holder of this Warrant shall thereafter, on the exercise hereof
as provided in Section 1, be entitled to receive the number of shares of Common
Stock determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5.1) be issuable on such
exercise by the fraction of which (i) the numerator is the Purchase Price which
would otherwise (but for the provisions of this Section 5.1) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5.2 Definitions, etc. For purposes of this Section 5 and Section 7:
The issuance of any warrants, options or other subscription or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock (or the issuance of
any warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance at such time of such Common
Stock if the Net Consideration Per Share which may be received by the Company
for such Common Stock (as hereinafter determined) shall be less than the
Purchase Price at the time of such issuance and, except as hereinafter provided,
an adjustment in the Purchase Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made upon each such issuance in
the manner provided in Section 5.1. Any obligation, agreement or undertaking to
issue warrants, options, or other subscription or purchase rights at any time in
the future shall be deemed to be an issuance at the time such obligation,
agreement or undertaking is made or arises. No adjustment of the Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made under Section 5.1 upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible securities if any adjustment shall previously
have been made upon the issuance of any such warrants, options or other rights
or upon the issuance of any convertible securities (or upon the issuance of any
warrants, options or any rights therefor) as above provided. Any adjustment of
the Purchase Price and the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to this Section 5.2 which relates to
warrants, options or other subscription or purchase rights with respect to
shares of Common Stock shall be disregarded if, as, and to the extent that such
warrants, options or other subscription or purchase rights expire or are
canceled without being exercised, so that the Purchase Price effective
immediately upon such cancellation or expiration shall be equal to the Purchase
Price that otherwise would have been in effect at the time of the issuance of
the expired or canceled warrants, options or other subscriptions or purchase
rights, with such additional adjustments as would have been made to that
Purchase Price had the expired or canceled warrants, options or other
subscriptions or purchase rights not been issued.
For purposes of this Section 5.2, the "Net Consideration Per Share" which
may be received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount equal to
the
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total amount of consideration, if any, received by the Company for the issuance
of such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that would be
issued if all such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities were exercised, exchanged or converted.
(B) The "Net Consideration Per Share" which may be received by the
Company shall be determined in each instance as of the date of issuance of
warrants, options, subscriptions or other purchase rights, or convertible or
exchangeable securities without giving effect to any possible future price
adjustments or rate adjustments which may be applicable with respect to such
warrants, options, subscriptions or other purchase rights or convertible
securities.
For purposes of this Section 5, if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in this Section 5
consists of property other than cash, such consideration shall be deemed to have
the same value as shall be determined in good faith by the Board of Directors of
the Company.
This Section 5.2 shall not apply under any of the circumstances described
in Section 5.4.
5.3. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
or (iii) combine its outstanding shares of the Common Stock into a smaller
number of shares of the Common Stock, then, in each such event, the Purchase
Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 5.3. The holder of
this Warrant shall thereafter, on the exercise hereof as provided in Section 1,
be entitled to receive that number of shares of Common Stock determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this Section 5.3) be issuable on such exercise by a fraction
of which (i) the numerator is the Purchase Price which would otherwise (but for
the provisions of this Section 5.3) be in effect, and (ii) the denominator is
the Purchase Price in effect on the date of such exercise.
5.4. Excluded Shares. Section 5.1 shall not apply to the (i) issuance of
up to 3,200,000 shares of Common Stock, or options therefor, to directors,
officers, employees, advisors and consultants of the Company on and after the
date of the issuance of this Warrant pursuant to any stock option, stock
purchase, stock ownership or compensation
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plan approved by the compensation committee of the Company's Board of Directors,
(ii) issuance of shares of Common Stock upon the exercise of all options and
warrants to purchase Common Stock outstanding as of the date of the issuance of
this Warrant or upon conversion of debt outstanding as of such date, or (iii)
the issuance of shares of Common Stock pursuant to any offering of securities of
the Company, from time to time, on or before December 31, 2002, to raise up to a
total of $35,000,000 of gross proceeds pursuant to any private placement or
public offering transaction or transactions, or both.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any adjustment
or readjustment in the shares of Common Stock issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Treasurer or Chief
Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants selected by the Company to compute such adjustment
or readjustment in accordance with the terms of the Warrants and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such issue or sale and as adjusted and readjusted as provided in this Warrant.
The Company will forthwith mail a copy of each such certificate to each holder
of a Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
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8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issue of Common Stock on the conversion of the Notes
and the exercise of the Warrants), then and in each such event the Company will
mail or cause to be mailed to each registered holder of a Warrant a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed at
least 20 days prior to the date specified in such notice on which any such
action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrants, all shares of Common Stock from time to time
issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant or warrants of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, calling
in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
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11. Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction of any Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of such warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company hereby appoints Interwest Transfer Co., Inc.,
with offices in Salt Lake City, Utah, as its agent for the purpose of issuing
Common Stock on the exercise of the Warrants pursuant to Section 1, exchanging
Warrants pursuant to Section 10, and replacing Warrants pursuant to Section 11,
or any of the foregoing, and thereafter any such issuance, exchange or
replacement, as the case may be, shall be made at such office by such agent. The
Company may change such agent and designate a new agent in the United States for
the above-described purposes by written notice to each holder of a Warrant.
13. Remedies. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that a holder of this Warrant may suffer
irreparable harm and that such terms may be specifically enforced by a decree by
a court of competent jurisdiction for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability. This Warrant is issued upon the following terms, to all of
which each holder or owner hereof by the taking hereof consents and agrees:
(a) subject to compliance with all applicable securities laws, title to
this Warrant may be transferred by endorsement (by the holder hereof executing
the form of assignment at the end hereof) and delivery in the same manner as in
the case of a negotiable instrument transferable by endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
15. Notices. All notices or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be considered as
duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by
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registered or certified mail, return receipt requested to the party entitled to
receive the same, if to the Company, World Wireless Communications, Inc., 5670
Greenwood Plaza Boulevard., Penthouse, Greenwood Village, Colorado 80111, with a
copy to Law Offices of Stephen R. Field, 240 Madison Avenue, 3rd Floor, New
York, New York 10016, Attn: Stephen R. Field, Esq., and if to the Holder of a
Warrant, at the address of such Holder shown on the books of the Company. Any
party may change his or its address by giving notice to the other party stating
his or its new address. Commencing on the 10th day after the giving of such
notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.
16. Governing Law. This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of the State of
Colorado, determined without regard to its conflicts of law principles. All
parties hereto (i) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Denver, Colorado, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in Denver, Colorado, in any such suit, action or proceeding, but
such consent shall not constitute a general appearance or be available to any
other person who is not a party to this Agreement. All parties hereto agree that
the mailing of any process in any suit, action or proceeding in accordance with
the notice provisions of this Agreement shall constitute personal service
thereof.
17. Entire Agreement; Waiver of Breach. This Agreement constitutes the entire
agreement among the parties and supersedes any prior agreement or understanding
among them with respect to the subject matter hereof, and it may not be modified
or amended in any manner other than as provided herein; and no waiver of any
breach or condition of this Agreement shall be deemed to have occurred unless
such waiver is in writing, signed by the party against whom enforcement is
sought, and no waiver shall be claimed to be a waiver of any subsequent breach
or condition of a like or different nature.
18. Severability. If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
19. Amendment. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
20. Expiration. The right to exercise this Warrant shall expire at 5:30 P.M.,
Central Mountain time, on May 16, 2006.
21. Attorneys Fees and Costs. In the event of any litigation arising under
or relating to this Warrant, the prevailing party in such dispute shall be
entitled to recover its costs and expenses, including reasonable attorney fees,
from the other.
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22. Restrictions on Transferability; Restrictive Legend. The holder
acknowledges that the shares of Common Stock issuable upon exercise of this
Warrant are subject to restrictions under applicable Federal and state
securities laws. Each certificate representing shares of Common Stock issued
shall, upon the exercise of this Warrant, bear the following legend in addition
to such other restrictive legends as may be required by law or by the Loan
Agreement:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws, and no sale or transfer thereof may be effected without an
effective registration statement or an opinion of counsel for the holder,
satisfactory to the company, that such registration is not required under the
act and any applicable state securities laws."
23. Restrictions on Exercise. Notwithstanding anything contained in this
Warrant to the contrary, this Warrant cannot be exercised, and no shares of the
Company's Common Stock shall be issued, until the issuance of shares of the
Company's Common Stock upon the exercise hereof is approved by the Company's
shareholders at a meeting of such shareholders.
Dated: May 17, 2001
------------
WORLD WIRELESS
COMMUNICATIONS, INC.
By: /s/ David D. Singer
--------------------------
David D. Singer, President
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FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: World Wireless Communications, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder
___________shares of Common Stock of World Wireless Communications, Inc. and
herewith makes payment of $_________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to whose
address is
--------------------------------------------------
(Street Address)
--------------------------------------------------
(City, State and Zip Code)
--------------------------------------------------
Dated:
------------------
-----------------------------------------
(Signature)
(Signature must conform to name of holder
as specified on the face of the Warrant)
-----------------------------------------
(Print Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City, State and Zip Code)
-----------------------------------------
(Person's Social Security Number
or Tax Identification Number)
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FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto _________________________________ the right represented by the within
Warrant to purchase shares of Common Stock of World Wireless Communications,
Inc. to which the within Warrant relates, and appoints
____________________________as its attorney to transfer such right on the books
of World Wireless Communications, Inc. with full power of substitution in the
premises.
Dated:
----------------
--------------------------------------------
(Signature)
(Signature must conform to name of holder as
specified on the face of the Warrant)
--------------------------------------------
(Print Name)
--------------------------------------------
(Street Address)
--------------------------------------------
(City, State and Zip Code)
--------------------------------------------
(Person's Social Security Number
or Tax Identification Number)
Signed in the presence of:
- -----------------------------------
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EXHIBIT C
PLEDGE/SECURITY AGREEMENT
THIS PLEDGE/SECURITY AGREEMENT, dated as of the 17th day of May, 2001, by
and between World Wireless Communications, Inc., a Nevada corporation
("Pledgor"), and Lancer Offshore, Inc. a British Virgin Islands corporation
("Pledgee" or "Holder").
WHEREAS, Pledgor wishes to raise a minimum of $1,125,000 and a maximum of
$5,000,000 through a sale of the units consisting of the Senior Secured Notes
and warrants to purchase common stock of the Company (the "Units") pursuant to
the Confidential Private Placement Memorandum dated May 17, 2001 (the
"Memorandum");
WHEREAS, Pledgee desires to obtain a security interest in certain property
owned by Pledgor; and
WHEREAS, as an inducement to Pledgee's purchase of the Units from Pledgor,
Pledgor has agreed to grant to Pledgee a security interest in and to the Pledged
Collateral (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the adequacy
and receipt for which are hereby acknowledged, the parties hereto hereby agree
as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Interpretations. Nothing herein expressed or implied is
intended or shall be construed to confer upon any person other than Pledgee any
right, remedy or claim under or by reason hereof. All covenants, stipulations
and agreements herein contained by or on behalf of Pledgee shall be for the sole
and exclusive benefit of Pledgee.
Section 1.2 Obligations Secured. The obligations secured hereby are the
obligations of Pledgor to Pledgee under the Notes sold by Pledgor to Pledgee
pursuant to the Memorandum, in the maximum principal amount thereof outstanding
from time to time, up to a maximum amount of $5,000,000 thereunder, and any
additional amounts payable by or chargeable to Pledgor thereunder or hereunder
(the "Obligations").
ARTICLE II
PLEDGE AND ADMINISTRATION OF PLEDGED COLLATERAL
Section 2.1 Pledged Collateral.
(a) Pledgor hereby pledges to Pledgee, and creates in Pledgee for its
benefit, a security interest, for such time as the Obligations shall remain
outstanding, in and to all of Pledgor's right, title and interest in and to
(i) the property listed in Exhibit 1 attached hereto (and signed
by Pledgor), including, without limitation, any securities described therein
(which securities are collectively referred to as the "Pledged Securities"), now
owned by Pledgor, and all machinery, equipment, automobiles, accounts
receivable, inventory and general intangibles acquired by Borrower on or after
the date of this Agreement; and
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(ii) all products and proceeds from the pledged property.
The property pledged in Section 2.1(a)(i) hereof, the Pledged Securities
and the products thereof and the proceeds of all such items are hereinafter
collectively referred to as the "Pledged Collateral." The security interest
granted by Pledgor to Pledgee in and to the Pledged Collateral shall be free and
clear of all security interests and restrictions on transfer of any kind except
as provided in this Agreement or as may be imposed by applicable law.
(b) Simultaneously with the execution and delivery of this Agreement,
Pledgor shall make, execute, acknowledge, file, record and deliver to Pledgee
any documents reasonably requested by Pledgee to perfect its first-in-priority
security interest in the Pledged Collateral. Simultaneously with the execution
and delivery of this Agreement, Pledgor shall make, execute, acknowledge, file,
record and deliver to Pledgee such documents and instruments, including, without
limitation, financing statements, certificates, affidavits and forms as may, in
the reasonable opinion of Pledgee, be necessary to effectuate, complete or
perfect, or to continue and preserve, the first-in-priority security interest of
Pledgee in the Pledged Collateral, and Pledgee shall hold such documents and
instruments as secured party, subject to the terms and conditions contained
herein.
Section 2.2 Rights; Interests; Etc. (a) So long as no Event of Default (as
hereinafter defined) shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all rights
pertaining to the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms hereof; and
(ii) Pledgor shall be entitled to receive and retain any and all
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payments paid or made in respect of the Pledged Collateral.
(b) Upon the occurrence and during the continuance of an Event in
Default:
(i) Subject to Section 2.2 (b) (iii) hereof, all rights of
Pledgor to exercise the rights which it would otherwise be entitled to exercise
pursuant to Section 2.2 (a) (i) hereof and to receive payments which it would
otherwise be authorized to receive and retain pursuant to Section 2.2 (a) (ii)
hereof shall be suspended, and all such rights shall thereupon become vested in
Pledgee who shall thereupon have the sole right to exercise such rights and to
receive and hold as Pledged Collateral such payments; provided, however, that if
Pledgee shall become entitled and shall elect to exercise its right to realize
on the Pledged Collateral pursuant to Article V hereof, then all cash sums
received by Pledgee, or held by Pledgor for the benefit of Pledgee and paid over
pursuant to Section 2.2 (b) (ii) hereof, shall be applied against any
outstanding Obligations.
(ii) All interest, dividends, income and other payments and
distributions which are received by Pledgor contrary to the provisions of
Section 2.2(b)(i) hereof shall be received in trust for the benefit of Pledgee,
shall be segregated from other property of Pledgor and shall be forthwith paid
over to Pledgee;
(iii) notwithstanding anything contained herein to the contrary.
Pledgor shall retain any voting rights it may have with respect to any of the
Pledged Securities until such time as Pledgee is entitled and elects to exercise
its rights to realize on the Pledged Securities pursuant to Article V hereof.
(c) Each of the following events shall constitute a default under this
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Agreement (each an "Event of Default"):
(i) any default, whether in whole or in part, shall occur in the
payment to Pledgee of principal, interest or other item comprising the
Obligations as and when due, which default shall continue for a period of 10
days after the receipt of written notice thereof by Pledgor;
(ii) any default, whether in whole or in part, shall occur in the
due observance or performance of any other covenant, term or provision to be
performed under this Agreement by Pledgor, or the Loan Agreement, and all
exhibits thereto, of even date herewith, which default is not described in any
other subsection of this Section, and such default shall continue for a period
of 10 days after the receipt of written notice thereof by Pledgor; provided,
however, that if Pledgor shall have commenced to cure such default within such
10- day period and shall proceed continuously in good faith and with due
diligence to cure such default, then such period instead shall be thirty (30)
days;
(iii) Pledgor shall (1) make a general assignment for the benefit
of its creditors, (2) apply for or consent to the appointment of a receiver,
trustee, assignee, custodian, sequestrator, liquidator or similar official for
itself or any of its assets and properties, (3) commence a voluntary case for
relief as a debtor under the United States Bankruptcy Code, (4) file with or
otherwise submit to any governmental authority any petition, answer or other
document seeking (A) reorganization, (B) an arrangement with creditors or (C) to
take advantage of any other present or future applicable law respecting
bankruptcy, reorganization, insolvency, readjustment of debts, relief of
debtors, dissolution or liquidation, (5) file or otherwise submit any answer or
other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such
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applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of
competent jurisdiction; or
(iv) any case, proceeding or other action shall be commenced
against Pledgor for the purpose of effecting, or an order, judgment or decree
shall be entered by any court of competent jurisdiction approving (in whole or
in part) anything specified in of Section 2.2(c) (iii) hereof, or any receiver,
trustee, assignee, custodian, sequestrator, liquidator or other official shall
be appointed with respect to Pledgor, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the
assets and properties of Pledgor, and any of the foregoing shall continue
unstayed and in effect for any period of 60 days.
ARTICLE III
ATTORNEY-IN-FACT; PERFORMANCE
Section 3.1 Pledgee Appointed Attorney-in-Fact. Upon the occurrence of an
Event of Default and only as long as such Event of Default shall be continuing,
Pledgor hereby appoints Pledgee Pledgor's attorney-in-fact, with full authority
in the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in Pledgee's discretion to take any action and to execute any
instrument which Pledgee reasonably may deem necessary to accomplish the
purposes of this Agreement, including, without limitation, to receive and
collect all instruments made payable to Pledgor representing any payment in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
Section 3.2 Pledgee May Perform. If Pledgor fails to perform any agreement
contained herein, Pledgee, at its option, may itself perform, or cause
performance of, such agreement, and the reasonable expenses of Pledgee incurred
in connection therewith shall be payable by Pledgor under Section 8.3.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
Section 4.1 Authorization; Enforceability. Each of the parties hereto
represents and warrants that it has taken all action necessary to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby; and upon execution and delivery, this Agreement shall
constitute a valid and binding obligation of the respective party, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights or by the principles governing the availability of
equitable remedies.
Section 4.2 Ownership of Pledged Collateral. Pledgor warrants and
represents that Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or other charge
or encumbrance except for the security interest created by this Agreement.
Section 4.3 Validity of Security Interest. Pledgor warrants and represents
that the pledge of the Pledged Collateral pursuant to this Agreement creates a
valid and perfected first priority pledge and security interest in the Pledged
Collateral.
Section 4.4 Due Organization. Pledgor warrants and represents that it (i)
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, (ii) has the corporate power and authority
necessary to entitle it to use its corporate name and to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
conducted or proposed to be conducted; (iii) is duly qualified and in good
standing to do business as presently conducted or proposed to be conducted; and
(iv) is duly qualified and in good standing to do business in every jurisdiction
where the nature of the business conducted or
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the property owned or leased by it requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
business or financial condition of such corporation.
ARTICLE V
DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
Section 5.1 Event of Default and Remedies.
(a) If an Event of Default described in Section 2.2(c)(i), (ii) and
(v) occurs and is continuing, then in each such case Pledgee may declare the
principal amount to be due and payable immediately, by a notice in writing to
the Company, and upon any such declaration, such principal amount shall become
immediately due and payable. If an Event of Default described in Sections
2.2(c)(iii) or (iv) occurs and is continuing, then the principal amount of all
the Notes shall automatically become immediately due and payable without
declaration or other act on the part of the Holder.
(b) Upon the occurrence of an Event of Default, Pledgee in its sole
discretion shall be entitled to receive all distributions with respect to the
Pledged Collateral, to cause the Pledged Collateral to be transferred into the
name of Pledgee or its nominee, to dispose of the Pledged Collateral, and to
realize upon any and all rights in the Pledged Collateral then held by Pledgee.
Section 5.2 Method of Realizing Upon the Pledged Collateral; Other
Remedies. Upon the occurrence of an Event of Default, in addition to any rights
and remedies available at law or in equity, the following provisions shall
govern Pledgee's right to realize upon the Pledged Collateral:
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(a) Any item of the Pledged Collateral may be sold for cash or other
value in any number of lots at brokers board, public auction or private sale and
may be sold without demand, advertisement or notice (except that Pledgee shall
give Pledgor ten (10) business days prior written notice of the time and place
or of the time after which a private sale may be made (the "Sale Notice"), which
notice shall be in any event commercially reasonable. At any sale or sales of
the Pledged Collateral, Pledgor may bid for and purchase the whole or any part
of the Pledged Collateral and, upon compliance with the terms of such sale, may
hold, exploit and dispose of the same without further accountability to Pledgee.
Pledgor will execute and deliver, or cause to be executed and delivered, such
instruments, documents, assignments, waivers, certificates, and affidavits and
supply or cause to be supplied such further information and take such further
action as Pledgee reasonably shall require in connection with any such sale.
(b) Any cash being held by Pledgee as Pledged Collateral and all cash
proceeds received by Pledgee in respect of, sale of, collection from, or other
realization upon all or any part of the Pledged Collateral shall be applied as
follows:
(i) to the payment of all amounts due the Pledgee for the
expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3
hereof;
(ii) to the payment of the amounts then due and unpaid for
principal of and interest on the Notes in respect of which or for the benefit of
which such money has been collected; and
(iii) the balance, if any, to the person or persons entitled
thereto, including, without limitation, Pledgor.
(c) It is understood that if all or any part of the Pledged Collateral
is
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sold as a private sale, Pledgee will sell such Collateral to the person making
the highest bid for such Pledged Collateral, provided that Pledgee shall not be
required to conduct an auction or otherwise solicit any specific number of
offers for the Pledged Collateral or any part thereof.
(d) In addition to all of the rights and remedies which Pledgor and
Pledgee may have pursuant to this Agreement, Pledgor and Pledgee shall have all
of the rights and remedies provided by law, including, without limitation, those
under the Uniform Commercial Code and as set forth in Section 5(e) hereof.
(e) (i) If Pledgor fails to pay such amounts due upon the occurrence
of an Event of Default which is continuing, then forthwith upon the Pledgee's
demand Pledgee may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against Pledgor or any other obligor upon the
Notes and collect the monies adjudged or decreed to be payable in the manner
provided by law out of the property of Pledgor or any other obligor upon such
Notes, wherever situated.
(ii) Pledgor agrees that it shall be liable for any expenses
incurred by Pledgee in connection with enforcement, collection and preservation
of the Notes, including, without limitation, legal fees and expenses, and such
amounts shall be deemed included under Section 8.3 hereof.
(iii) All rights of action and claims under this Agreement may be
prosecuted and enforced by Pledgee without the possession of any of the Notes or
the production thereof in any proceeding relating thereto, any such proceeding
instituted by Pledgee may be brought in any capacity as it may determine and any
recovery of judgment shall, after
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provision for the payment of the legal fees and expenses and other expenses
paid or incurred by Pledgee as permitted hereunder, be for the benefit of
Pledgee, but only to the maximum amount of the Obligations.
Section 5.3 Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relating to Pledgor or any other obligor upon the Notes or
the property of Pledgor or of such other obligor or their creditors, Pledgee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether Pledgee shall have made any demand on Pledgor for the payment of overdue
principal, if any, or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal of the
Notes and interest owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Holder (including any claim for the legal fees and expenses and
other expenses paid or incurred by the Pledgee permitted hereunder and of the
Holder allowed in such judicial proceeding), and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by Pledgee to make such
payments to Pledgee.
Section 5.4 Duties Regarding Pledged Collateral. Pledgee shall have no duty
as to the collection or protection of the Pledged Collateral or any income
thereon or as to the
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preservation of any rights pertaining thereto, beyond the safe custody and
reasonable care of any of the Pledged Collateral actually in Pledgee's
possession.
Section 5.5 Limitation on Suits.
(a) No holder of the Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to the Notes for any other
remedy hereunder, if Pledgee has instituted a proceeding pursuant to Section
5.2(e) hereof.
(b) Except as otherwise provided herein, every right and remedy given by
this Agreement or by law to Pledgee may be exercised from time to time, and as
often as may be deemed expedient, by Pledgee.
Section 5.6 Additional Remedies upon Default. Notwithstanding anything
contained in this Agreement to the contrary, if Pledgor defaults in the payment
of principal or interest on any Note at the maturity date of any Note, in
addition to any interest rate penalty provided in the Note:
(a) Pledgor shall transfer to Pledgee 1,000,000 shares of the common stock
of Pledgor, subject to applicable securities laws restrictions, for each 30-day
period during which such default shall be in existence (the "Default Shares"),
commencing with the month in which such default first occurs and continuing
until such default is cured or otherwise satisfied, but in no event shall
Pledgor be required to issue more than 10,000,000 shares pursuant to this
Section 5.6 (a). The representations and warranties of Pledgee set forth in
Section 3 of Pledgee's Subscription Agreement shall be true and correct with
respect to such Default Shares on the date of each such transfer; and
(b) Pledgee shall have the right to convert the full amount of the
Pledgee's
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interest in the Obligations hereunder and under the Notes into shares of common
stock of Pledgor at the rate of one share for each $0.50 of the amount of the
Obligations (with any fraction rounded up to the next whole share) in full
satisfaction of all of Pledgee's interest in the Obligations hereunder and
Pledgor's obligations under the Obligations and the Notes in full by sending
Pledgor written notice to such effect within 30 days after the maturity date.
ARTICLE VI
AFFIRMATIVE COVENANTS
Pledgor covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless Pledgee shall consent
otherwise in writing (as provided in Section 8.4 hereof):
Section 6.1 Existence, Properties, Etc.
(a) Pledgor shall do, or cause to be done, all things, or proceed with due
diligence with any actions or courses of action, that may be necessary (i) to
maintain its due organization, valid existence and good standing under the laws
of its state of incorporation, and (ii) to preserve and keep in full force and
effect all qualifications, licenses and registrations in those jurisdictions in
which the failure to do so could have a Material Adverse Effect (as defined in
this Section 6.1(a)); and (b) Pledgor shall not do, or cause to be done, any act
impairing its corporate power or authority (i) to carry on its business as now
conducted, and (ii) to execute or deliver this Agreement, or any other loan
instrument delivered pursuant to the Confidential Private Placement Memorandum
of Pledgor dated May 17, 2001 (which other loan instruments collectively shall
be referred to the "Loan Instruments") to which it is or will be a party, or
perform any of its obligations hereunder or thereunder. For purposes of this
Agreement, the term
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"Material Adverse Affect" shall mean any material and adverse affect, whether
individually or in the aggregate, upon (a) Pledgor's assets, business,
operations, properties or condition, financial or otherwise, (b) the ability of
Pledgor to make payment as and when due of all or any part of the Obligations,
or (c) the Pledged Collateral.
Section 6.2 Payment of Debts, Taxes, Etc. Pledgor shall pay, or cause to be
paid, all of its indebtedness and other liabilities and perform, or cause to be
performed, all of its obligations in accordance with the respective terms
thereof, and pay and discharge, or cause to be paid or discharged, all taxes,
assessments and other governmental charges and levies imposed upon it, upon its
income or receipts or upon any of its assets and properties on or before the
last day on which the same may be paid without penalty, as well as pay all other
lawful claims (whether for services, labor, materials, supplies or otherwise) as
and when due; provided, however, that it shall not constitute a breach of this
Section if Pledgor fails to perform any such obligation or to pay any such
indebtedness or other liability (except for the Obligations), tax, assessment,
or governmental or other charge, levy or claim (i) that is being contested in
good faith and by proper proceedings diligently pursued and (ii) if the effect
of such failure to pay or perform will not (A) accelerate the maturity thereof,
or of any other debt or obligation of Pledgor, or (B) subject any part of the
assets and properties of Pledgor to sale or forfeiture.
Section 6.3 Accounts and Reports. Pledgor shall maintain a standard system
of accounting in accordance with generally accepted accounting principles
consistently applied and provide, at its sole expense, to Pledgee the following:
(a) as soon as available and in any event within 90 days after the end of
each fiscal year of Pledgor, commencing with the fiscal year ending
December
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31, 2001, a balance sheet of Pledgor as at the end of that fiscal year
and the related statements of earnings, shareholders' equity and cash
flow for such fiscal year, all with accompanying notes, in reasonable
detail and stating in comparative form the figures as at the end of
and for the previous fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, and
audited by a firm of independent certified public accountants of
recognized standing designated by Pledgee in writing (including,
without limitation, Deloitte & Touche LLP) to audit Pledgor's books;
(b) as soon as available, and in any event within 60 days after the end of
each three-month period of each of its fiscal years (commencing with
the quarter ending June 30, 2001), a balance sheet of Pledgor as at
the end of such three-month period and the related statements of
earnings, shareholders' equity and cash flow for such period, all with
accompanying notes, in reasonable detail and stating in comparative
form the figures as at the end of and for the previous fiscal year's
applicable period, prepared in accordance with generally accepted
accounting principles consistently applied, and compiled by a firm of
independent certified public accountants of recognized standing
designated by Pledgee in writing (including, without limitation,
Deloitte & Touche LLP) to review Pledgor's books;
(c) as soon as available, a copy of any notice or other communication
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alleging any nonpayment or other material breach or default, or any
foreclosure or other action respecting any material portion of its
assets and properties, received respecting any of the indebtedness of
Pledgor in excess of $25,000 (other than the Obligations), or any
demand or other request for payment under any guaranty, assumption,
purchase agreement or similar agreement or arrangement respecting the
indebtedness or obligations of others in excess of $25,000, including
any received from any person acting on behalf of the holder or
beneficiary thereof; and
(d) within 30 days after the making of each submission or filing, a copy
of any report, registration statement, proxy statement, financial
statement, notice or other document, whether periodic or otherwise,
submitted to the shareholders of Pledgor, or submitted to or filed by
Pledgor with any governmental authority involving or affecting (i) any
registration of Pledgor or its securities, (ii) Pledgor that could
have a Material Adverse Effect, (iii) the Obligations, (iv) any part
of the Pledged Collateral or (v) any of the transactions contemplated
in this Agreement or the Loan Instruments, including, without
limitation, those submitted or filed pursuant to the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended.
Section 6.4 Compliance with Applicable Laws; Operations. Pledgor promptly
and fully shall comply with, conform to and obey all current applicable laws and
all future
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applicable laws in all material respects as the same shall take effect, the
non-compliance with or violation of which could have a Material Adverse Effect.
In any event, Pledgor shall procure, store, manufacture, distribute and dispose
of all inventory and use and operate all machinery, equipment and real estate in
full compliance with and conformity to all applicable laws in all material
respects, including, without limitation, (i) all applicable permits, license,
authorizations, consents or approvals of authorities and (ii) all applicable
laws pertaining to employment, zoning, pollution, hazardous materials, toxic
substances, public health or safety, occupational health or safety or the
environment.
Section 6.5 Maintenance and Insurance.
(a) Pledgor shall maintain or cause to be maintained, at its own expense,
all of its assets and properties in good working order and condition, making all
necessary repairs thereto and renewals and replacements thereof.
(b) Pledgor shall maintain or cause to be maintained, at its own expense,
insurance in form, substance and amounts (including deductibles), which Pledgor
deems reasonably necessary to Pledgor's business, (i) adequate to insure all
assets and properties of Pledgor, which assets and properties are of a character
usually insured by persons engaged in the same or similar business against loss
or damage resulting from fire, flood, hurricanes or other risks included in an
extended coverage policy, (ii) against public liability and other tort claims
that may be incurred by Pledgor, (iii) as may be required by the Loan
Instruments or applicable law and (iv) as may be reasonably requested by
Pledgee, all with adequate, financially sound and reputable insurers, and all
naming Pledgee as an additional insured and loss payee under a standard
mortgagee's endorsement as Pledgee's interest may appear.
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Section 6.6 Contracts and Other Collateral. Pledgor shall perform all of
its obligations under or with respect to each instrument, receivable, contract
and other intangible included in the Pledged Collateral to which Pledgor is now
or hereafter will be party on a timely basis and in the manner therein required,
including, without limitation, this Agreement; and Pledgor shall enforce all of
its rights under all such instruments, agreements and other receivable on a
timely basis to the full extent permitted by applicable law.
Section 6.7 Defense of Collateral, Etc. Pledgor shall defend and enforce
its right, title and interest in and to any part of (a) the Pledged Collateral,
and (b) if not included within the Pledged Collateral, those assets and
properties whose loss could have a Material Adverse Effect, Pledgor shall defend
Pledgee's right, title and interest in and to each and every part of the Pledged
Collateral, each against all manner of claims and demands on a timely basis to
the full extent permitted by applicable law.
ARTICLE VII
NEGATIVE COVENANTS
Pledgor covenants and agrees that, from the date hereof until the
Obligations have been fully paid and satisfied, unless Pledgee shall consent
otherwise in writing (as provided in Section 8.4 hereof):
Section 7.1 Indebtedness. Pledgor shall not directly or indirectly permit,
create, incur, assume, permit to exist, increase, renew or extend on or after
the date hereof any indebtedness on its part, including commitments,
contingencies and credit availabilities, or apply for or offer or agree to do
any of the foregoing, except that Pledgor may incur or permit to exist: (a)
indebtedness owed to Pledgee; (b) indebtedness incurred in the ordinary course
of business,
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including, without limitation, to suppliers, distributors, carriers,
materialmen, laborers, counsel, accountants, advisors, sellers or lessors of
machinery and equipment and real estate acquired or leased in connection with
Pledgor's business; (c) indebtedness incurred in connection with the financing
of Pledgor's inventory, accounts receivable, purchase orders, product sales or
service agreements with a bank or other financial institution, so long as
Pledgor is not in default under the Loan Agreement at the date of the closing of
such financing, and (d) other indebtedness expressly subordinated to the
Obligations by such creditor executing the standard form subordination agreement
of the Pledgee attached hereto as Exhibit 2 (the "Subordination Agreement"), or
otherwise as may be acceptable to Pledgee in its sole discretion and as to which
it consents in writing. Pledgor shall not prepay or acquire, in whole or in
part, any of its indebtedness except to Pledgee as permitted by agreement or
consent or where any prepayments do not exceed the sum of $100,000 in any
calendar year of Pledgor. The indebtedness permitted under clauses (b), (c) and
(d) hereof incurred after the date of this Agreement shall not exceed in the
aggregate $5,000,000.
Section 7.2 Liens and Encumbrances. Pledgor shall not directly or
indirectly make, create, incur, assume or permit to exist any assignment,
pledge, mortgage, security interest or other lien or encumbrance of any nature
in, to or against any part of the Pledged Collateral, or offer or agree to do
so, or own or acquire or agree to acquire any asset or property of any character
subject to any of the foregoing encumbrances (including any conditional sale
contract or other title retention agreement), or assign, pledge or in any way
transfer or encumber its right to receive any income or other distribution or
proceeds from any part of the Pledged Collateral, or enter into any
sale-leaseback financing respecting any part of the Pledged Collateral as
lessee,
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or cause or assist the inception or continuation of any of the foregoing;
provided, however, that the foregoing restrictions shall not prohibit (to the
extent otherwise not prohibited by this Agreement):
(a) liens for taxes, assessments, governmental charges, levies or
claims described in Section 6.2, if payment thereof shall not then be required
to be made by this Section 7.2;
(b) liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not then
required to be paid under Section 6.2, so long as there shall have been set
aside on the books of Pledgor such reserve, if any, as shall be required by
generally accepted accounting principles;
(c) liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance, statutory obligation or
social security legislation, or for any purpose at the time required by law as a
condition precedent to the transaction of business or the exercise of any of the
privileges or licenses of Pledgor;
(d) liens incurred in respect of attachments discharged within 30 days
from the making thereof or judgments or awards in force for less than 30 days or
with respect to which Pledgor in good faith shall be prosecuting an appeal or
proceeding for review and with respect to which a stay of execution upon appeal
or proceeding for review shall have been secured if required;
(e) the security interests and other liens and encumbrances granted
from time to time to Pledgee;
(f) with respect to indebtedness permitted under Section 7.1, liens
incurred in respect of any financing of Pledgor's machinery, equipment and
automobiles owned
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by Pledgor on the date hereof with a bank or other financial institution,
provided (A) that the loan instruments evidencing such financing for such item
expressly provide that any lien arising from such financing is subordinate to
the first security interest hereunder and, in the event of a default thereunder,
no collection of the principal, interest and other charges and expenses
thereunder will be made until the full payment of the Obligations, or otherwise
as may be acceptable to Pledgee in its sole discretion and as to which it
consents in writing; and (B) notwithstanding anything contained in this
Agreement to the contrary, in the case of the financing of Pledgor's inventory,
accounts receivable, purchase orders, or product sales or service agreements
with a bank or other financial institution, such lender shall be entitled to a
first security interest in such assets and shall be entitled to collect full
payment of the obligations incurred by Pledgor thereunder at all times,
regardless of the Obligations.
(g) liens incurred in respect of indebtedness on the Pledged
Collateral which are subordinated to the Obligations by such creditor(s)
executing the Subordination Agreement; and which are subordinated to the
Obligations, or otherwise as may be acceptable to Pledgee in its sole discretion
and as to which it consents in writing; and
(h) with respect to indebtedness permitted under section 7.1, liens
incurred in respect of indebtedness on machinery, equipment and automobiles
purchased or leased by Pledgor after the date of the execution and delivery of
this Agreement by Pledgor at the closing of the offering made pursuant to the
Memorandum.
Section 7.3 Securities Issuance. Pledgor shall not issue any of its stock
for $0.25 per share or less, nor shall Pledgor issue any note, warrant,
debenture or other security which may convert or be exercised to acquire
Pledgor's stock for $0.25 per share or less.
Section 7.4 License Agreements. Notwithstanding anything contained in this
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Agreement to the contrary:
(a) Pledgor shall be entitled to enter into one or more license agreements
covering any of its products in any field of use on reasonable commercial terms
as determined by Pledgor in its sole discretion, free and clear of any liens,
encumbrances or claims of any kind, and Pledgee hereby consents thereto without
the need for any further action on its part with respect thereto, provided that
(i) any such license agreement does not exceed the greater of 10 years or the
unexpired term of any patent, (ii) Pledgor gives Pledgee written notice of
Pledgor's execution and delivery of any license agreement within 30 days after
the execution and the delivery of the same and (iii) Pledgor does not grant the
licensee any security interest in any patent or patent application with respect
thereto; and
(b) Pledgee agrees to execute and deliver such instruments and take such
action as Pledgor may reasonably request in writing to assure that any license
rights granted by Pledgor are free and clear of any liens, encumbrances or
claims of any kind.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as duly given on (a) the date of delivery, if delivered in person,
by nationally recognized overnight delivery service or by facsimile or (b) three
days after mailing if mailed from within the continental United States by
registered or certified mail, return receipt requested to the party entitled to
receive the same, if to Pledgor, World Wireless Communications, Inc., 5670
Greenwood Plaza Boulevard, Penthouse, Greenwood Village, Colorado 80111, with a
copy to Law Offices of Stephen R. Field, 240 Madison Avenue, 3rd Floor, New
York, New York 10016, Attn: Stephen R. Field, Esq., and if to Pledgee, at the
addresses shown on the books of Pledgor.
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Any party may change its address by giving notice to the other party stating its
new address. Commencing on the 10th day after the giving of such notice, such
newly designated address shall be such party's address for the purpose of all
notices or other communications required or permitted to be given pursuant to
this Agreement.
Section 8.2 Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
Section 8.3 Expenses. In the event of an Event of Default, Pledgor will pay
to Pledgee the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel, which Pledgee may incur in
connection with (i) the custody or preservation of, or the sale, collection
from, or other realization upon, any of the Pledged Collateral, (ii) the
exercise or enforcement of any of the rights of Pledgee hereunder or (iii) the
failure by Pledgor to perform or observe any of the provisions hereof.
Section 8.4 Waivers, Amendments, Etc.. Pledgee's delay or failure at any
time or times hereafter to require strict performance by Pledgor of any
undertakings, agreements or covenants shall not waive, affect, or diminish any
right of Pledgee under this Agreement to demand strict compliance and
performance herewith. Any waiver by Pledgee of any Event of Default shall not
waive or affect any other Event of Default, whether such Event of Default is
prior or subsequent thereto and whether of the same or a different type. None of
the undertakings, agreements and covenants of Pledgor contained in this
Agreement, and no Event of Default, shall be deemed to have been waived by
Pledgee, nor may this Agreement be amended, changed or modified, unless such
waiver, amendment, change or modification is evidenced by an
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instrument in writing specifying such waiver, amendment, change
or modification and signed by both Pledgor and Pledgee.
Section 8.5 Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) remain in
full force and effect until payment in full of the Obligations or the conversion
of all of the Notes as provided therein, and (ii) be binding upon Pledgor and
its successors and (iii) inure to the benefit of Pledgee and its successors and
permitted assigns. Upon the payment or satisfaction in full of the Obligations,
or such conversion of the Notes, Pledgor shall be entitled to the return, at its
expense, of such of the Pledged Collateral as shall not have been sold, returned
in accordance with Section 5.2 hereof or otherwise applied pursuant to the terms
hereof.
Section 8.6 Applicable Law; Jurisdiction. This Agreement and the rights of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of Colorado, without regard to its conflicts of law
principles. Pledgee and Pledgor hereto (i) agree that any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted only
in a federal or state court in Denver, Colorado, (ii) waive any objection which
they may now or hereafter have to the laying of the venue of any such suit,
action or proceeding, and (iii) irrevocably submit to the jurisdiction of any
federal or state court in Denver, Colorado, in any such suit, action or
proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement. Pledgee and
Pledgor agree that the mailing of any process in any suit, action or proceeding
in accordance with the notice provisions of this Agreement shall constitute
personal service thereof.
Section 8.7 Entire Agreement. This Agreement constitutes the entire
agreement among the parties and supersedes any prior agreement or understanding
among them with respect to the subject matter hereof.
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Section 8.8 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
Section 8.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
Section 8.10 Rights to Participate in Board Meetings. Pledgee in its
capacity as Pledgee shall have the right to send an observer to attend or
participate in any and all meetings of the Board of Directors, or committees
thereof, of Pledgor, whether held in person or by conference call. Pledgor
agrees to provide Pledgee with the same notice and information that it gives to
its directors in connection with any such meeting to the extent permitted by
applicable law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WORLD WIRELESS COMMUNICATIONS, INC.
PLEDGOR
By: /s/ DAVID D. SINGER
---------------------------
David D. Singer, President
LANCER OFFSHORE, INC.
PLEDGEE
By: /s/ MICHAEL LAUER
---------------------------
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EXHIBIT 1
First security interest on machinery, equipment, automobiles, fixtures,
furniture, inventory, accounts receivable, securities of any kind, and general
intangibles now owned and hereafter acquired by Pledgor and the products and
proceeds therefrom, including, without limitation, the items listed below:
57
- --------------------------------------------------------------------------------
WORLD WIRELESS COMMUNICATIONS, INC.
PATENT AND PATENT APPLICATIONS
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
MATTER DOCKET DATE STATUS
NO. FILED
- ------------------------------------------------------------------------------------------------------------------------------------
Array of Collinear Dipoles; U.S. Patent No. 4,937,588; 30713 08/14/86 11.5 year Maintenance Fee due 12/26/01.
Issued 06/26/90
- ------------------------------------------------------------------------------------------------------------------------------------
Apparatus and Method for Matching Radiator and Feedline 30714 12/12/88 11.5 year Maintenance Fee due 01/10/02.
Impedences and for Isolating the Radiator From the
Feedline; U.S. Patent No. 4,940,989; Issued 07/10/90
- ------------------------------------------------------------------------------------------------------------------------------------
Synchronization-Free Spread-Spectrum Demodulator; U.S. 30703 08/05/96 Owned 50% by World Wireless and 50% by Digital
Patent No. 6,005,886; Issued 12/21/99 Scientific. Maintenance fees are being handled by
Thorpe, North & Western L.L.P., which has retained
possession of the original file.
- ------------------------------------------------------------------------------------------------------------------------------------
Radio Receiver with High Side and Low Injection; Serial No. 30215P 03/16/00 REGULAR UTILITY PATENT APPLICATION FILED 03/16/01.
60/189,792
- ------------------------------------------------------------------------------------------------------------------------------------
System and Method for Wireless Data Transmission; Serial 30216P 03/16/00 REGULAR UTILITY PATENT APPLICATION FILED 03/16/10.
No. 60/189,796
- ------------------------------------------------------------------------------------------------------------------------------------
An Improved Method of Connecting Devices to the Internet; 30217P 03/16/00 REGULAR UTILITY PATENT APPLICATION FILED 03/15/01.
60/189,919 CORRESPONDING PCT APPLICATION FILED 03/16/01.
- ------------------------------------------------------------------------------------------------------------------------------------
System and Method for Data Encoding; Serial No. 09/490,916 30704 01/25/00 Awaiting first Office Action from PTO.
- ------------------------------------------------------------------------------------------------------------------------------------
System and Method for Data Encoding PCT 30704 01/16/01 Chapter II Demand due 08/25/01; National
Phase due 07/25/02.
- ------------------------------------------------------------------------------------------------------------------------------------
Spread Spectrum Synchronized Receiver and Synchronizing 30707 07/17/98 RECEIVED NOTICE OF ALLOWANCE DATED 06/22/01.
Method; Serial No. 09/118,447 ISSUED FEE DUE 09/22/01.
- ------------------------------------------------------------------------------------------------------------------------------------
Spectral Diffision/Spreading Communication, Apparatus and 30710 03/23/99 Awaiting first office Action from PTO.
Method; Serial No. 09/274,892
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58
EXHIBIT 2
SUBORDINATION AGREEMENT
This Subordination Agreement (this "Agreement"), dated as of
_____________, _____ is made among World Wireless Communications, Inc., a Nevada
corporation ("Borrower"), Lancer Offshore, Inc. as the Pledgee and each party
hereto making a loan pursuant to the Loan Agreement between the Borrower and
Lancer Offshore, Inc. dated as of May 17, 2001, as amended (individually a
"Lender" and collectively the "Lenders") under the promissory note evidencing
the Senior Debt (as hereafter defined), and ___________________ ("Subordinated
Creditor"). The defined term "Lenders" shall include any successor or
replacement senior lender or lenders of the Borrower.
In order to induce Lenders to lend money to Borrower in such amounts,
for such periods and such terms as Lenders and Borrower may agree upon, as a
condition to such loans, and in consideration of any loan so made, Lenders,
Borrower, and Subordinated Creditor agree as follows:
1. As used herein, and unless otherwise defined herein, the following
terms shall have the following respective meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined) except as
the context shall otherwise require:
"Event of Default" shall mean an event which, with notice or
lapse of time or both, automatically accelerates the maturity of the
Senior Debt, or which permits either of the Lenders to accelerate the
maturity of the Senior Debt.
"Indefeasibly Paid in Full" or any similar term or phrase when
used in this Agreement with respect to Senior Debt shall mean the final
payment in full of all Senior Debt in cash.
"Insolvency Proceeding" shall mean (i) any assignment for the
benefit of creditors by Borrower or any other marshaling of the assets
and liabilities of Borrower; or (ii) the institution by or against
Borrower of any proceedings in insolvency, bankruptcy, receivership,
liquidation, arrangement, reorganization, dissolution, winding up or
other similar case or proceeding whether voluntary or involuntary.
"Senior Agreement" shall mean the Loan Agreement dated as of
May 17, 2001, as amended, between Borrower and Lancer Offshore, Inc.
dated as of May 17, 2001, as such agreement may be modified, amended,
supplemented, restated, replaced, exchanged or refinanced from time to
time in accordance with the terms thereof; in connection with any such
replacement or refinancing, "Senior Agreement" shall mean the
agreement(s)
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evidencing the obligations to the successor or replacement senior
lender(s) thereunder and "Lenders" shall mean such successor or
replacement senior lender(s). The Senior Agreement shall be deemed to
be in effect hereunder for so long as Borrower has any obligation to
Lenders thereunder or Lenders have any unexpired commitment to Borrower
thereunder.
"Senior Debt" shall mean all indebtedness, obligations, and
liabilities of every nature of Borrower, including any subsidiary
guarantees for the benefit of Lenders (including any successor or
replacement senior lender), whether now existing or hereafter incurred,
direct, indirect, or acquired, absolute or contingent, secured or
unsecured, together with any extensions, renewals or modifications of
any thereof, and shall include, without limitation, all obligations and
liabilities of Borrower for the payment of principal, interest,
penalties, fees (including, without limitation, reasonable attorneys'
fees and disbursements and fees of in-house counsel) and other amounts
under or in respect of the Senior Agreement, including, without
limitation, interest payments arising after the initiation of any
Insolvency Proceeding whether or not such interest is an allowed claim
in any Insolvency Proceeding.
"Standstill Notice" shall mean a written notice given by the
either of the Lenders to Subordinated Creditor of the occurrence of an
Event of Default.
"Subordinated Debt" shall mean all indebtedness, obligations,
and liabilities of Borrower to Subordinated Creditor, whether now
existing or hereafter incurred, direct, indirect, or acquired, absolute
or contingent, secured or unsecured, together with all modifications,
amendments, extensions, renewals, and refundings thereof or of any part
of any thereof, and shall include, without limitation, the principal
amount of indebtedness under the Subordinated Note, any right to
interest from Borrower on account thereof, and any other charges and
claims provided for thereunder.
"Subordinated Note" shall mean the Promissory Note dated
____________, executed by Borrower in favor of Subordinated Creditor in
the original principal amount of $________________.
2. Subordinated Creditor represents and warrants to the Lenders that:
(i) as of the date of this Agreement, Borrower is indebted to Subordinated
Creditor under the Subordinated Note in the aggregate principal amount of
$________ and that there is no other Subordinated Debt currently outstanding
between Borrower and Subordinated Creditor; (ii) it has not, either singly or
collectively, sold, assigned, transferred or otherwise disposed of any right it
or they may have to repayment of the Subordinated Debt or any security thereof;
(iii) Subordinated Creditor is a duly organized ______________, formed and
existing under the laws of ___________, having full power and authority to own
its properties and to carry on its business as now conducted; (iv) Subordinated
Creditor has the requisite power and authority to enter into and perform its
obligations under this Agreement; (v) this Agreement has been duly executed
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and delivered by Subordinated Creditor and is a valid, legal and binding
obligation of Subordinated Creditor, subject to principles of equity and rights
applicable to the rights of creditors generally, including bankruptcy laws; and
(vi) the officer or officers who have executed this Agreement on behalf of such
Subordinated Creditor are duly empowered and authorized to do so.
3. To the extent and in the manner set forth in this Agreement,
notwithstanding anything to the contrary contained in the Subordinated Note and
any related loan agreement, the Subordinated Debt and all rights and remedies of
Subordinated Creditor with respect thereto (including without limitation any
lien securing payment thereof) is, and shall continue to be, subject and
subordinate to the Senior Debt.
4. Borrower and Subordinated Creditor hereby covenant and agree as
follows:
(a) Borrower shall not make and Subordinated Creditor shall
not receive, directly or indirectly, any payment, advance, credit, security or
new or further evidence of any kind whatsoever on account of or with respect to
the Subordinated Debt or any part thereof; provided, however, that Subordinated
Creditor may receive from Borrower regularly scheduled installments of interest
under the Subordinated Note (but no prepayments) on the stated dates of payment
thereof so long as no Standstill Notice is then in effect.
(b) Upon the maturity of any Senior Debt, whether by lapse of
time, acceleration or otherwise, all amounts due or to become due in connection
therewith shall first be Indefeasibly Paid in Full before any direct or indirect
payment is made by or on behalf of Borrower or received by Subordinated Creditor
on account of any Subordinated Debt.
(c) Upon the occurrence of an Event of Default and during any
period that a Standstill Notice is in effect, no direct or indirect payment
shall be made on behalf of Borrower or received by Subordinated Creditor on
account of the Subordinated Debt. A Standstill Notice issued upon any payment
default or acceleration of the Senior Debt shall remain in effect until Lenders
receive Indefeasible Payment in Full, as provided in paragraph 4(b) above. The
Lenders will use commercially reasonable efforts to give Subordinated Creditor
written notice upon the waiver and/or cure of the Event(s) of Default that gave
rise to a Standstill Notice (without liability or penalty incurred by either of
the Lenders for any failure to give such notice). After the Subordinated
Creditor receives written notice of waiver and/or cure of the Event(s) of
Default from the Lenders, the Borrower shall be free to continue to make regular
interest payments to Subordinated Creditor as they come due, including those
payments that are in arrears.
(d) In the event that all or any portion of the Subordinated
Debt shall have been declared to be due and payable by Subordinated Creditor,
such declaration shall not be effective without both of the Lenders' written
consent until the earliest to occur of: (i) an Insolvency Proceeding; or (ii)
the default at scheduled maturity of, or the acceleration of the maturity of,
any Senior Debt.
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(e) Subordinated Creditor may not commence suit or take any
other action to seek or enforce collection of any Subordinated Debt after the
Subordinated Creditor gives Lenders written notice that Subordinated Creditor
has declared the Subordinated Debt to be due and payable. Any and all proceeds
of or recoveries from enforcement proceedings by Subordinated Creditor shall be
subject to all the provisions of this Agreement, including, without limitation,
the provision of paragraph 9 hereof. The terms of this paragraph 4(e) are
subject to the limitations contained in paragraph 6 herein.
(f) Subordinated Creditor may not initiate or cooperate in the
commencement of any Insolvency Proceeding.
(g) Subordinated Creditor may not purchase, and shall not
permit any affiliate of Subordinated Creditor to purchase, any goods or services
from Borrower except for cash and without incurring trade debt.
(h) Subordinated Creditor may not exercise, and shall not
permit any affiliate of Subordinated Creditor to exercise, any right of offset
against Borrower, until after the withdrawal of the Standstill Notice, and then
subject to the requirements of paragraph 9 hereof.
(i) Subordinated Creditor shall immediately notify Lenders of
any default or breach of the Subordinated Debt.
(j) The provisions of paragraph 4 shall continue to be
effective until such time (if any) as the Senior Debt has been Indefeasibly Paid
in Full.
5. Borrower and Subordinated Creditor agree as follows:
(a) Upon any distribution of assets of Borrower and its
subsidiaries to creditors of Borrower upon or in connection with an Insolvency
Proceeding, any payment or distribution of any kind (whether in cash, property,
or securities) which otherwise would be payable or deliverable upon or with
respect to the Subordinated Debt shall be paid or delivered directly to the
Lenders for application (in case of cash) to, or as collateral (in case of
non-cash property or securities) for, the payment or prepayment of the Senior
Debt until the Senior Debt has been Indefeasibly Paid in Full.
(b) If any Insolvency Proceeding is commenced by or against
Borrower, Lenders are hereby irrevocably authorized and empowered, but shall
have no obligation, to: (i) demand, sue for, collect and receive every payment
or distribution referred to in paragraph 5.1 above and give acquittance
therefor; and (ii) file claims and proofs of claim and take such other action
(including, without limitation, any voting rights in the Insolvency Proceeding
related to the Subordinated Debt and enforcing any security interest or other
lien securing payment of the Subordinated Debt) as it may deem necessary or
advisable for the exercise of any of the rights or interests of Lenders
hereunder.
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(c) If any Insolvency Proceeding is commenced by or against
Borrower, Subordinated Creditor shall duly and promptly take such action as
Lenders may request to: (i) collect the Subordinated Debt for account of
Lenders, and file appropriate claims or proofs of claim in respect of the
Subordinated Debt; (ii) execute and deliver to Lenders such powers of attorney,
assignments or other instruments as Lenders may request in order to enable it to
enforce any and all claims with respect to the Subordinated Debt and any
security interests and other liens securing payment of the Subordinated Debt;
and (iii) collect and receive any and all payments and distributions which may
be payable or deliverable upon or with respect to the Subordinated Debt.
(d) If any Insolvency Proceeding is commenced by or against
Borrower or otherwise, Subordinated Creditor agrees not to: (i) contest, or join
in any proceeding contesting, the creation, existence, validity, priority or
perfection of any lien or security interest securing payment of the Senior Debt;
(ii) without the prior written consent of Lenders, assert any rights or claims
to adequate protection payments for the Subordinated Debt in any Insolvency
Proceeding; (iii) object to or contest, or join in any proceeding objecting to
or contesting, any "post petition financing" arrangement or agreement between
the Lenders and Borrower, including, without limitation, Borrower's use of "cash
collateral" in any Insolvency Proceeding; (iv) assert any position or claim that
is adverse to the interests of the Lenders in connection with any rights in or
payments under the Senior Debt; (v) waive any rights to make an election under
11 U.S.C. Section 1111(b); (vi) seek participation or membership in any
creditor's committee in any Insolvency Proceeding without the both of the
Lenders' prior written consent; or (vii) oppose, or join in any proceeding
opposing the sale or disposition of any property or collateral of the Borrower,
if the Lenders have both consented to such sale or disposition.
6. To the extent that Subordinated Creditor now has or hereafter
obtains a lien or security interest in any assets of Borrower:
(a) Such lien or security interest shall be at all times
subject and subordinate to any lien or security interest which Lenders now has
or hereafter obtains in such assets of Borrower without regard to the time or
manner in which the respective liens and security interests of the parties
hereto may have been created or perfected; and
(b) Except upon the written consent of the Lenders,
Subordinated Creditor may not at any time exercise any rights or remedies with
respect to or otherwise enforce any lien or security interest it now has or
hereafter obtains in Borrower's assets, or apply any assets covered by any such
lien or security interest to any claim now or hereafter existing against
Borrower.
7. Borrower and Subordinated Creditor waive notice of acceptance of
this Agreement by Lenders, and Subordinated Creditor waives notice of and
consents to the making of: (i) any loans or other extensions of credit which
Lenders (or any successor or replacement senior lender(s)) may make to Borrower
from time to time; (ii) any renewal, replacement, refinancing or extension
thereof; and (iii) any action which Lenders (or any successor or
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replacement senior lender(s)) may take or omit in its sole and absolute
discretion with respect thereto.
8. This Subordination Agreement shall constitute a continuing agreement
of subordination and Lenders (or any successor or replacement senior lender(s))
may, from time to time and without notice to Subordinated Creditor, lend money
to or make other financing arrangements with Borrower in reliance hereon.
9. In the event that any payment or distribution, or any security,
proceeds thereof or property or funds payable as adequate protection for use,
sale or lease of such security, is received by Subordinated Creditor (other than
those payments that Subordinated Creditor is entitled to receive pursuant to the
provisions of and under the conditions specified by paragraph 4(a) of this
Agreement), such property shall be received and held in trust for the benefit of
Lenders, shall be segregated from other funds and property held by Subordinated
Creditor, and shall be immediately paid over to Lenders in the form received
(together with any endorsements or documents as may be necessary to effectively
negotiate or transfer such property) for application (in case of cash) to, or as
collateral (in case of non-cash property or securities) for, the payment or
prepayment of the Senior Debt.
10. Subordinated Creditor authorizes Lenders (or any successor or
replacement senior lender(s)), without notice or demand and without affecting or
impairing Subordinated Creditor's obligations hereunder, from time to time to:
(i) renew, compromise, extend, increase, accelerate or otherwise change the time
for payment of, or otherwise change any of the other terms of the Senior Debt or
any part thereof, including, without limitation, to increase or decrease the
rate of interest thereon; (ii) take and hold security for the payment of the
Senior Debt and exchange, enforce, waive, release, and fail to perfect any such
security; (iii) apply such security and direct the order or manner of sale
thereof as Lenders (or any successor or replacement senior lender(s)) in its
sole discretion may determine; (iv) release and substitute any one or more
endorsers, warrantors, Borrower, or other obligor. Lenders may assign their
respective rights under this Agreement in whole or in part.
11. Subordinated Creditor acknowledges and agrees that it shall have
the sole responsibility for obtaining from Borrower such information concerning
Borrower's financial condition or business operations as Subordinated Creditor
may require, and that Lenders have no duty at any time to disclose to
Subordinated Creditor any information relating to the business, operations, or
financial condition of Borrower. Borrower acknowledges and agrees that
Subordinated Creditor and Lenders may freely share any information regarding
Borrower.
12. Subordinated Creditor shall deliver to Lenders a copy of the
executed Senior Subordinated Note which shall bear a conspicuous legend reading
substantially as follows:
"THIS PROMISSORY NOTE IS SUBORDINATED TO ANY PRESENT OR FUTURE
DEBT OWING FROM THE MAKER TO THE HOLDERS OF THE MAKER'S
PROMISSORY NOTE DATED MAY 17, 2001 IN THE ORIGINAL PRINCIPAL
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64
AMOUNT OF AT LEAST $1,125,000 (THE "SENIOR NOTES") AND MAY BE
ENFORCED ONLY IN ACCORDANCE WITH THAT CERTAIN SUBORDINATION
AGREEMENT AMONG LANCER OFFSHORE, INC., AND WORLD WIRELESS
COMMUNICATIONS, INC. DATED AS OF MAY 17, 2001, AS AMENDED."
Such copy shall be certified in writing as being a true, current, and complete
copy of the original by a responsible officer of Subordinated Creditor. Any
replacement or substituted note shall bear the foregoing legend.
13. Lenders may notify any assignee, trustee or interest trustee in
bankruptcy, receiver, debtor in possession or other person or persons of their
rights under this Agreement.
14. Neither Subordinated Creditor nor Borrower shall amend, extend or
otherwise change the term of any Subordinated Debt without the consent of
Lenders if the effect of such amendment would be to: (i) increase the principal
amount of the Subordinated Debt; (ii) increase the rate of interest payable on
the Subordinated Debt; or (iii) change the maturity date of the Subordinated
Debt or accelerate the time for making any payment on the Subordinated Debt.
15. Any notice relating to this Agreement shall be in writing and shall
be personally served, sent by certified mail, return receipt requested, with
postage prepaid or sent by telecopy to the address of such party set forth on
the signature page of this Agreement. Such notice shall be deemed given and
received on the date so served, mailed or telecopied.
16. This Agreement is intended solely for the purpose of defining the
relative rights of the Lenders and the Subordinated Creditor. Nothing contained
in this Agreement is intended to or shall affect or impair: (i) as between
Borrower, its creditors (other than Lenders) and Subordinated Creditor, the
obligation of Borrower (which is absolute and unconditional) to pay the
Subordinated Debt in accordance with the terms thereof; and (ii) the relative
rights of Subordinated Creditor and creditors of Borrower other than Lenders.
17. Subordinated Creditor and Borrower agree to execute and deliver to
Lenders any additional agreements reasonably deemed necessary by Lenders to
effect or confirm the agreement set forth herein and to effect collection of any
payments which may be made at any time on account of the Subordinated Debt.
18. After the Senior Debt has been Indefeasibly Paid in Full, the
holders of Subordinated Debt shall be subrogated to the rights of holders of
Senior Debt to receive payments or distributions applicable to Senior Debt, to
the extent that distributions otherwise payable to the holders of Subordinated
Debt have been applied to the payment of Senior Debt. Subordinated Creditor
agrees that this Agreement shall not be affected by any action, or failure to
act, by Lenders which results or may result, in impairing or extinguishing any
right of reimbursement, subrogation or other right or remedy of Subordinated
Creditor.
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19. This Agreement shall be governed by the laws of the State of
Colorado, determined without regard to conflicts of law principles, and the
parties hereto consent to the jurisdiction of the state and federal courts in
and for the State of Colorado in Denver, Colorado in connection with any dispute
arising under or relating to this Agreement. The provisions of this Agreement
are independent of and separable from each other. If any provision of this
Agreement shall for any reason be held by any court or other authority of
competent jurisdiction to be invalid or unenforceable, it is the intent of the
parties that such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision hereof, and that this Agreement shall
be construed as if such invalid or unenforceable provision had never been
contained herein.
20. This Agreement constitutes and expresses the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements, or conditions, whether express, implied, oral or written. This
Agreement shall extend to and be binding upon the successors, assigns, heirs and
legal representative of each of the parties hereto; provided, however, that
Subordinated Creditor may not assign, transfer, pledge, hypothecate, encumber,
or endorse the Subordinated Debt or any part or evidence thereof unless such
transaction is made expressly subject to the terms hereof.
21. In the event Subordinated Creditor or Borrower breaches any of
their obligations hereunder to Lenders, the Lenders shall be entitled to recover
their damages, costs and reasonable attorney fees which result from such breach.
22. Neither this Agreement nor any portion or provisions hereof may be
changed, waived, or amended or in any manner other than by an agreement in
writing signed by the parties to this Agreement. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing any such
counterparts.
23. Borrower agrees to use commercially reasonable efforts to give
Subordinated Creditor copies of any written notice of an Event of Default that
Lenders may provide to Borrower under the Senior Agreement.
24. Subordinated Creditor and any assignee of Lenders, successor or
replacement lender shall reaffirm or reconfirm the provisions of this Agreement
and acknowledge the substitution of parties in writing.
25. Whenever Lenders' consent is required hereunder, such consent may
be given or withheld in the sole and absolute direction of Lender, unless
otherwise noted herein.
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26. To the extent that Lenders have any liability hereunder, such
liability shall be several and not joint. Any payments to the Lenders hereunder
shall be divided between the Lenders in proportion to their respective amounts
of the Senior Debt or on such other basis as the Lenders may mutually agree in
writing.
IN WITNESS WHEREOF, the parties have read and executed this Agreement
is executed as of the date stated at the top of the first page.
LANCER OFFSHORE, INC. WORLD WIRELESS
COMMUNICATIONS, INC.
By: By:
---------------------------- -------------------------------
Address where notices are to be sent: Name:
-----------------------------
Title:
375 Park Avenue, Suite 2006 ----------------------------
New York, New York 10152
Address where notices are to be sent: Address where notices are to be
sent:
----------------------------
----------------------------
----------------------------
- -------------------------------
[Subordinated Creditor]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Address where notices to are to be sent:
- -------------------------------
- -------------------------------
- -------------------------------
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EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
OF
WORLD WIRELESS COMMUNICATIONS, INC.
Agreement made as of the 17th day of May, 2001, by and among World Wireless
Communications, Inc., a Nevada corporation currently having its office and
principal place of business at 5670 Greenwood Plaza Boulevard, Penthouse,
Greenwood Village, Colorado 80111 (the "Corporation"), and Lancer Offshore,
Inc., a British Virgin Islands corporation (the "Noteholder").
WHEREAS, upon the closing of the offering of up to $5,000,000 principal
amount of Senior Secured Notes of the Company (the "Notes") and the Warrants (as
defined below) pursuant to the Confidential Private Placement Memorandum dated
May 17, 2001 (the "Offering") (the "Effective Date"), as defined in the
Offering, the Noteholder will (i) own warrants to purchase a minimum of 562,500,
and a maximum of 2,500,000, shares of common stock, $.001 par value per share,
of the Corporation at an exercise price of $0.50 per share exercisable during a
period of five years from the date of the Effective Date (the "Warrants") and
(ii)
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have the right to receive a minimum of 2,250,000, and a maximum of 10,000,000,
shares of common stock, $.001 par value per share, of the Corporation pursuant
to the mandatory conversion of such stock (shares of such common stock acquired
pursuant to the Offering, together with shares of common subsequently acquired
by the Noteholder pursuant to the Offering, being referred to as the "Shares"
and collectively as the "Stock");
WHEREAS, upon the Effective Date, the Corporation and the Noteholder desire
to provide for certain registration rights for the Stock of the Corporation or
any interest therein now or hereafter acquired by the Noteholder pursuant to the
Offering;
NOW, THEREFORE, effective upon the Effective Date, in consideration of the
mutual covenants and conditions herein contained, each of the parties hereby
agrees as follows:
1. Piggyback Registration Rights.
1.1 (a) If the Corporation shall propose to file a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), at any time
during the 24-month period after the Effective Date, either on its own behalf or
that of any of its shareholders for an offering of shares of the capital stock
of the Corporation (including shares to be issued pursuant to the exercise of
any warrants,
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including the Warrants) for cash or securities, the Corporation shall give
written notice as promptly as possible of such proposed registration to the
Noteholder and shall use reasonable efforts to include all of the shares of the
Stock owned by the Noteholder (including shares to be issued pursuant to the
exercise of any warrants, including the Warrants, or upon the mandatory
conversion of the Notes into such Shares) (the "Seller" or "Registering
Noteholder") in such registration statement as such Seller shall request within
10 days after receipt of such notice from the Corporation, provided, that (A)
the Seller furnishes the Company with a written notice of its irrevocable
exercise of the Warrants in whole or in part within 10 days after the receipt of
such notice from the Corporation, (B) if shares of the Stock are being offered
by the Corporation in an underwritten offering, any shares of the Stock proposed
to be included in the registration statement on behalf of the Seller shall be
included in the underwriting offering on the same terms and conditions as the
Stock being offered by the Corporation, and (C) the Seller shall be entitled to
include such number of shares of the Stock owned by the Seller in such
registration statement, one time only during the applicable period set forth
herein (except that the Seller shall have the right not to exercise such
piggyback registration right set forth herein once, in which case the Seller
shall have the right set forth in this Section 1.1 with respect to the next
succeeding registration statement described in this Section 1.1 proposed
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to be filed by the Corporation during such 24-month period); and provided
further, that (i) the Corporation shall not be required to include such number
or amount of shares owned by the Seller in any such registration statement if it
relates solely to securities of the Corporation to be issued pursuant to a stock
option or other employee benefit plan, (ii) the Corporation may, as to an
offering of securities of the Corporation by the Corporation, withdraw such
registration statement at its sole discretion and without the consent of the
Seller and abandon such proposed offering and (iii) the Corporation shall not be
required to include such number of shares of the Stock owned by the Seller in
such registration statement if the Corporation is advised in writing by its
underwriter or investment banking firm that it reasonably believes that the
inclusion of the Seller's shares would have an adverse effect on the offering.
(b) A registration filed pursuant to this Section 1.1(a) shall not be
deemed to have been effected unless the registration statement related thereto
(i) has become effective under the Securities Act and (ii) has remained
effective for a period of at least nine months (or such shorter period of time
in which all of the Stock registered thereunder has actually been sold
thereunder); provided, however, that if, after any registration statement filed
pursuant to Section 1.1(a) becomes effective and prior to the time the
registration statement has been effective for a period of at least nine months,
such registration statement is interfered with by any stop order,
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injunction or other order or requirement of the Commission or other governmental
agency or court solely due to actions or omissions to act of the Corporation,
such registration statement shall not be considered one of the registrations
applicable pursuant to Section 1.1(a).
1.2 Delay or Suspension of Registration. Notwithstanding any other
provision of this Section 1 to the contrary, if the Corporation shall furnish to
the Noteholder:
(a) a certificate signed by the President of the Corporation stating
that, in the good faith judgment of a majority of the members of the entire
Board of Directors of the Corporation, it would adversely and materially affect
the Corporation's ability to enter into an agreement with respect to, or to
consummate, a bona fide material transaction to which it is or would be a party,
or the Corporation has a plan to register stock to be sold for its own account
within a 90-day period after the filing of the registration statement under
Section 1.1(a), for the Corporation to use its reasonable best efforts to effect
the registration of the Stock; or
(b) both (A) a certificate signed by the President of the Corporation
stating that, in the good faith judgment of a majority of the members of the
entire Board of Directors of the Corporation, a material fact exists which the
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Corporation has a bona fide business purpose for preserving as confidential and
(B) an opinion of counsel to the Corporation to the effect that the registration
by the Corporation or the offer or sale by the Noteholder of the Stock pursuant
to an effective registration statement would require disclosure of the material
fact which is referenced in the President's certificate required under Section
1.2(b)(ii)(A) and which, in such counsel's opinion, is not otherwise required to
be disclosed, then the Corporation's obligations pursuant to Section 1.2(a) with
respect to any such demand for registration shall be deferred or offers and
sales of the Stock by the Noteholder shall be suspended, as the case may be,
until the earliest of: (1) the date on which, as applicable (a) the
Corporation's use of reasonable best efforts to effect the registration of the
Stock would no longer have such a material adverse effect or (b) the material
fact is disclosed to the public or ceases to be material; (2) 135 days from the
date of receipt by the Noteholder of the materials referred to in Section 1.2(b)
(i) and (ii) above; and (3) such time as the Corporation notifies the Noteholder
that it has resumed use of its reasonable best efforts to effect registration of
the Stock or that offers and sales of the Stock pursuant to an effective
registration statement may be resumed, as the case may be. If the Noteholder
receives the materials referred to in Section 1.2(b)(ii) above while a
registration statement for the offer and sale of the Stock is in effect, the
Noteholder agree to terminate immediately any offer or sale
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of the Stock. A particular material transaction to which the Corporation is or
would be a party or a particular material fact shall not give rise to more than
one deferral or suspension notice by the Corporation pursuant to the provisions
of this Section 1.2.
1.3 In connection with any registration or qualification pursuant to the
provisions of this Section 1, the Corporation shall, except as prohibited under
the blue sky or securities laws of any jurisdiction under which a registration
or qualification is being effected, pay all filing, registration and
qualification fees of the Securities and Exchange Commission, printing expenses,
fees and disbursements of legal counsel and all accounting expenses, except that
the Seller shall bear the fees and expenses of its own legal counsel, and the
underwriting or brokerage discounts and commissions, expenses of its brokers or
underwriters and fees of the National Association of Securities Dealers, Inc.
attributable to its Stock; provided, however, that the Corporation shall not be
required in the case of any registration hereunder to make blue sky filings in
more than 15 states.
1.4 (a) In each case of registration of shares of Stock under the
Securities Act pursuant to these registration provisions, the Corporation shall
unconditionally indemnify and hold harmless the Seller, each underwriter (as
defined in the Securities Act), and each person who controls any such
underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Securities
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Exchange Act of 1934 (the Seller and each such underwriter, and each such person
who controls any such underwriter being referred to for purposes of this Section
1.4, as an "Indemnified Person") from and against any and all losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such shares of the Stock were registered
under the Securities Act, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto (including, in each case, any
documents incorporated by reference therein), or arising out of any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to the Seller or any underwriter and furnished to the
Corporation or the Noteholder, as the case may be, in writing by the Seller or
such underwriter expressly for use therein; provided that the foregoing
indemnification with respect to a preliminary prospectus shall not inure to the
benefit of any underwriter (or to the benefit of any person controlling such
underwriter) from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased shares of the Stock to the extent such losses,
claims, damages or liabilities
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result from the fact that a copy of the final prospectus had not been sent or
given to such person at or prior to written confirmation of the sale of such
shares to such person.
(b) In each case of a registration of shares of the Stock under the
Securities Act pursuant to these registration provisions, the Seller
participating in the registration shall unconditionally indemnify and hold
harmless the Corporation (and its directors and officers), each underwriter and
each person, if any, who controls the Corporation or such underwriter within the
meaning of Section 15 of the Securities Act of Section 20(a) of the Securities
Exchange Act of 1934, to the same extent as the foregoing indemnity from the
Corporation to the Seller but only with reference to information relating to the
Seller and furnished to the Corporation by the Seller for use in the
registration statement, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto. The Seller will use all
reasonable efforts to cause any underwriters of shares of Stock to be sold by
the Seller to indemnify the Corporation on the same terms as the Seller agrees
to indemnify the Corporation, but only with reference to information furnished
in writing by such underwriter for use in the registration statement.
(c) In case any action or proceeding shall be brought against or instituted
which involves any Indemnified Person, such Indemnified Person shall
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promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing and the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such action or proceeding, any Indemnified Person shall
have the right to obtain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person has agreed to the retention of such counsel at its expense
or (ii) the named parties to any such action or proceeding include both the
Indemnifying Person and the Indemnified Person, and the Indemnified Person has
been advised by counsel that there may be one or more defenses available to such
Indemnified Person which are different from or additional to those available to
the Indemnifying Person (in which case, if the Indemnified Person notifies the
Indemnifying Person that it wishes to employ separate counsel at the expense of
the Indemnifying Person, the Indemnifying Person shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnified
Person). It is understood that the Indemnifying Person shall not be liable for
the fees and expenses of more than one separate firm of attorneys at any time
for all such similarly situated Indemnified Persons. The Indemnifying Person
shall not
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be liable for any settlement of any action or proceeding effected without its
written consent.
(d) In the event the indemnifications provided for in this Section 1.4 are
unavailable or insufficient, then the Seller shall pay the amount paid or
payable as a result of such losses, claims, damages, liabilities, actions and
expenses.
(e) Notwithstanding anything in this Section 1.4 to the contrary, the
Corporation shall not be liable to the Seller for any losses, claims, damages or
liabilities arising out of or caused by (A) any reasonable delay (1) in filing
or processing any registration statement or any preliminary or final prospectus,
amendment or supplement thereto after the inclusion of the Seller's Stock in
such registration statement, or (2) in requesting such registration statement be
declared effective by the Commission and (B) the failure of the Commission for
any reason to declare effective any registration statement.
2. MISCELLANEOUS.
2.1 Notices. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
certified
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mail, return receipt requested to the party entitled to receive the same, if to
the Corporation, World Wireless Communications, Inc., 5670 Greenwood Plaza
Boulevard, Penthouse, Greenwood Village, Colorado 80111, with a copy to Law
Offices of Stephen R. Field, 240 Madison Avenue, New York, New York 10016, Attn:
Stephen R. Field, Esq.; and if to the Noteholder, at his or its address as set
forth in the books and records of the Corporation. Any party may change his or
its address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
2.2 Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Colorado, without regard to its conflicts of law principles. All parties hereto
(i) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement shall be instituted only in a federal or state court in
Denver, Colorado, (ii) waive any objection which they may now or hereafter have
to the laying of the venue of any such suit, action or proceeding, and (iii)
irrevocably submit to the jurisdiction of any federal or state court in Denver,
Colorado in any such suit, action or proceeding, but such consent shall not
constitute a general appearance or be available
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to any other person who is not a party to this Agreement. All parties hereto
agree that the mailing of any process in any suit, action or proceeding in
accordance with the notice provisions of this Agreement shall constitute
personal service thereof.
2.3 Entire Agreement; Waiver of Breach. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
2.4 Binding Effect; Assignability. This Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors and permitted assigns. This
Agreement and the rights of the parties hereunder shall not be assigned except
with the written consent of all parties hereto.
2.5 Captions. Captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provision hereof.
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2.6 Number and Gender. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in either the masculine, the feminine or the
neuter gender shall include the masculine, feminine and neuter.
2.7 Severability. If any provision of this Agreement shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
2.8 Amendments. This Agreement may not be amended except in a writing
signed by all of the parties hereto.
2.9 Compliance with Securities Laws. Commencing with the Effective Date,
the Corporation will use its best efforts to comply thereafter with the
applicable provisions of the Securities Act and the Securities Exchange Act of
1934.
2.10 Restrictions on Resale. Notwithstanding anything contained herein to
the contrary, the Seller agrees that, after the registration statement described
in Section 1.1(a) becomes effective, the Seller will not sell, transfer, pledge
or otherwise dispose of more than 15% of the total number of shares of Common
Stock acquired pursuant to the Offering in any one calendar month, commencing
with the month in which such registration statement becomes effective.
2.11 Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
WORLD WIRELESS COMMUNICATIONS, INC.
By: /s/ DAVID D. SINGER
--------------------------------
David D. Singer, President
LANCER OFFSHORE, INC.
By: /s/ MICHAEL LAUER
--------------------------------
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