APPENDIX C
LOAN AGREEMENT
This Loan Agreement dated as of the 15th day of May, 1998 by
and between each party hereto making a loan pursuant to this
Agreement (individually "each Lender" and collectively the "Lender")
and World Wireless Communications, Inc., a Nevada corporation,
having an address at 150 Wright Brothers Drive, Suite 560, Salt
Lake City, Utah 84116 (the "Borrower").
WHEREAS, each 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
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1.1 Simultaneously with the execution and the delivery of
this Agreement, Lender agrees to lend to Borrower the aggregate sum
of $2,500,000, in the amounts set forth on the signature page
hereto, which is to be used solely by Borrower in the operation of
its business as determined by the Board of Directors of Borrower in
accordance with the business plan previously delivered to Lender,
which amount shall be repaid on May 15, 1999 (the "Loan").
1.2 The Loan shall bear simple interest at the rate of 10%
per annum payable quarterly as provided in, 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 each Lender an executed
original of the note in the form of Exhibit A attached hereto for
the amount loaned to Borrower by such Lender (the "Note").
1.4 Simultaneously with the execution and the delivery of
this Agreement, Borrower shall deliver to each Lender an executed
original of the warrants in the form of Exhibit B attached hereto
representing its pro rata share thereof in consideration for the
amount loaned to Borrower by such Lender (the "Warrants").
1.5 Simultaneously with the execution and the delivery of
this Agreement, each Lender and Borrower will execute and deliver
the Pledge/Security Agreement attached hereto as Exhibit C (the
"Pledge/Security Agreement").
1.6 Simultaneously with the execution and the delivery of
this Agreement, each Lender and Borrower will execute and deliver
the Registration Rights Agreement attached hereto as Exhibit D (the
"Registration Rights Agreement").
1.7 Simultaneously with the execution and the delivery of
this Agreement, each Lender will execute and deliver the Pledgee
Representative Agreement attached to the Loan Agreement as Exhibit E.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EACH LENDER
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Each Lender represents and warrants to Borrower that:
2.1 Power and Authority. Each Lender which is a
corporation, limited liability company or partnership is a duly
organized, validly existing entity in good standing under the laws
of its respective state of formation; each Lender has all requisite
power and authority to carry on the business in which it is engaged;
each owns its assets; and each has the power and authority to
execute and deliver this Agreement and to perform all of its
respective obligations hereunder.
2.2 Authorization. This Agreement has been duly and validly
authorized, executed and delivered by each of them; and this Agreement
constitutes the valid and binding obligation of each and is enforceable
against each in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
2.3 No Violations. Neither the execution and delivery of
this Agreement, nor the performance of any of their respective
obligations hereunder will violate (or, with the passage of time,
will violate) any material term, covenant, condition, or provision
of any contract (written or unwritten) or any document, certificate
of incorporation, by-law, judgment, decree, order, or regulation of
any court or governmental or regulatory authority by which any
Lender is bound or subject.
2.4 Brokers and Finders. Neither any Lender nor any of
its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated by
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BORROWER
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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 to
Acquiror 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 11,077,110
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,
totalling 1,327,495 shares.
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,
1997 (the "Financial Statement"). 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 its Prospectus dated February 17, 1998 filed with the
Securities and Exchange Commission and its Special Financial Report
filed pursuant to Section 15(d)-2 of the Securities Exchange Act of
1934, 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 detract from the value or impair
the use of the property subject thereto, or impair the operations of
Borrower and which have arisen only in the ordinary course of
business and consistent with past practice since the date of the
Financial Statement; and (c) liens for current taxes not yet due.
With respect to the property and assets it leases, Borrower is in
compliance with such leases, and Borrower holds valid leasehold
interests in such property and assets free of any liens,
encumbrances and security interests of any party other than the
lessors of such property and assets.
3.7 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental
or other regulatory or administrative agency or commission pending
or, to the best knowledge of Borrower, threatened against or
involving Borrower, or 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.
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 Bruce
D. Cowen and James Kelly 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 its wholly-owned subsidiaries
and other entities listed in Section 3.10 of the Disclosure
Schedule.
3.11 Taxes. Borrower has filed all tax returns that are
required to have been filed in any jurisdiction, and has paid all
taxes shown to be due and payable on such returns and all the taxes
and assessments levied upon it or its properties, assets, income or
franchises, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, except for taxes
and assessments the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings
and with respect to which Borrower has established adequate
reserves. To the best of Borrower's knowledge, there are no tax
examinations in progress involving Borrower for any fiscal period or
periods, and no notice of any claim for taxes, whether pending or
threatened, has been received, and no requests for waivers of the
time to assess any such taxes are pending.
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
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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., 150 Wright Brothers Drive, Suite 560, Salt
Lake City, Utah 84116, with a copy to Law Offices of Stephen R.
Field, 620 Fifth Avenue, New York, New York, Attn: Stephen R. Field,
Esq.; and if to a Lender, at his or its address as set forth in the
books and records of the Lender. Any party may change his or its
address by giving notice to the other party stating his or its new
address. Commencing on the 10th day after the giving of such
notice, such newly designated address shall be such party's address
for the purpose of all notices or other communications required or
permitted to be given pursuant to this Agreement.
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 Utah, 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 Salt Lake
City, Utah or in the State of Colorado, (ii) waive any objection
which they may now or hereafter have to the laying of the venue of
any such suit, action or proceeding, and (iii) irrevocably submit to
the jurisdiction of any federal or state court in Salt Lake City,
Utah or in the State of Colorado in any such suit, action or
proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to
this Agreement. All parties hereto agree that the mailing of any
process in any suit, action or proceeding in accordance with the
notice provisions of this Agreement shall constitute personal
service thereof.
4.3 Entire Agreement; Waiver of Breach. This Agreement
constitutes the entire agreement among the parties and supersedes
any prior agreement or understanding among them with respect to the
subject matter hereof, and it may not be modified or amended in any
manner other than as provided herein; and no waiver of any breach or
condition of this Agreement shall be deemed to have occurred unless
such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver
of any subsequent breach or condition of a like or different nature.
4.4 Binding Effect; Assignability. This Agreement and
all the terms and provisions hereof shall be binding upon and shall
inure to the benefit of the parties and their respective heirs,
successors and permitted assigns. This Agreement and the rights of
the parties hereunder shall not be assigned except with the written
consent of all parties hereto.
4.5 Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit
or extend the scope or intent of this Agreement or any provision hereof.
4.6 Number and Gender. Wherever from the context it
appears appropriate, each term stated in either the singular or the
plural shall include the singular and the plural, and pronouns
stated in either the masculine, the feminine or the neuter gender
shall include the masculine, feminine and neuter.
4.7 Severability. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not
in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were
not contained herein.
4.8 Amendments. This Agreement may not be amended except
in a writing signed by all of the parties hereto.
4.9 Survival of Representations and Warranties. The
representations and warranties of each party hereto shall survive
the execution and the delivery of this Agreement until one year from
the date hereof.
4.11 Costs and Expenses. Upon Closing, Borrower shall pay
or reimburse The McCloskey Trust for up to $2,500 of its costs and
expenses incurred in entering into this transaction, including its
reasonable attorneys fees, which amount may be deducted from the
loan proceeds. After the Closing, in the event of any dispute
arising under this Agreement, the prevailing party in such dispute
shall be entitled to recover its costs and expenses, including
attorneys fees, from the other.
IN WITNESS WEREOF, each of the parties has signed this
Agreement as of the date first written above.
WORLD WIRELESS COMMUNICATIONS, INC.
By: /S/ David Singer
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David Singer, President
BORROWER
LOAN AMOUNT LENDER
$1,100,000 THE McCLOSKEY TRUST
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By: /S/ Thomas D. McCloskey, Jr.
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Thomas D. McCloskey, Jr., Trustee
$100,000 DPM INVESTMENT CORP.
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BY: /S/Thomas D. McCloskey, Jr.
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Thomas D. McCloskey, Jr., Vice President
$100,000 FRYING PAN PARTNERS, LLC.
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BY: /S/ David L. Marrs
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David L. Marrs, Member
$750,000 KATHRYN R. BRAITHWAITE
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BY: /S/ Kathryn R. Braithwaite
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Kathryn R. Braithwaite
$200,000 CJL INVESTMENTS, LLC
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BY: /S/ John H. Perry, III
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John H. Perry, III, Managing - Member
$125,000 SCOTT W. RYAN
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BY: /S/ Scott W. Ryan
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Scott W. Ryan
$125,000 WARREN PALITZ
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BY: /S/ Warren Palitz
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Warren Palitz