SERIES A PREFERRED STOCK
EXCHANGE AGREEMENT
This Exchange Agreement is entered into and effective as of the 12th
day of June, 1998, by and among Wireless Cable & Communications, Inc., a Nevada
corporation (the "Corporation"), and the persons and entities listed on the
Schedule of Holders attached hereto as Schedule "A," which Schedule of Holders
sets forth all of the holders of record of the Corporation's shares of Series A
Preferred Stock (collectively, the "Stockholders").
The Stockholders are the sole holders of the Corporation's Series A
Preferred Stock.
The Corporation and the Stockholders desire to exchange the issued and
outstanding shares of Series A Preferred Stock for shares of the Corporation's
common stock, par value $.01 per share (the "Common Stock") in the manner and
upon the terms and conditions set forth herein.
Now, therefore, in consideration of the foregoing recitals and the
covenants and agreements set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Exchange of Securities. Subject to the approval of the Corporation's
stockholders of the Corporation's Amended and Restated Articles of
Incorporation, by the execution of this Agreement, each Stockholder herewith
sells, assigns, transfers and sets over unto the Corporation all of such
Stockholder's right, title and interest in and to the number of shares of the
issued and outstanding Series A Preferred Stock set forth opposite such
Stockholder's name on the Schedule of Holders solely in exchange for the number
of duly and validly authorized and issued, fully paid, non-assessable, voting
shares of Common Stock of the Corporation set forth opposite such Stockholder's
name on the Schedule of Holders (the "Exchange Shares"). By the execution of
this Agreement, the Corporation accepts from each Stockholder the transfer of
the shares of Series A Preferred Stock solely in exchange, and as payment in
full for, the Exchange Shares.
2. Deliveries. Upon the execution and delivery of this Agreement, the
Corporation shall deliver to each Stockholder a certificate representing the
respective number of Exchange Shares set forth opposite such Stockholder's name
on the Schedule of Holders, and each Stockholder shall deliver to the
Corporation the certificate or certificates representing the shares of Series A
Preferred Stock held of record by such Stockholder duly endorsed in blank, or
accompanied by duly executed stock powers.
3. Representations and Warranties of the Corporation. The Corporation
represents and warrants to each Stockholder that the statements contained in
this Section 3 are true, correct and complete as of the date of this Agreement,
except as set forth in the Disclosure Schedule attached hereto as Schedule "B"
(the "Disclosure Schedule").
3.1 Organization. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. the Corporation is duly licensed or qualified to do business, and is in
good standing under the laws of each state in which the Corporation is required
to be so licensed or qualified, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Corporation. The Corporation has the corporate power and authority to own or
lease its properties, rights and assets and to conduct its business as now
conducted and as presently proposed to be conducted.
3.2 Execution and Delivery. The Corporation has full corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby and thereby. All corporate action on the part
of the Corporation necessary to authorize the execution, delivery and
performance by the Corporation of this Agreement, and the consummation of the
transactions contemplated hereby and thereby, has been taken. This Agreement has
been duly and validly authorized, executed and delivered by the Corporation, and
constitutes a valid and binding obligation of the Corporation, enforceable
against the Corporation in accordance with its respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or effecting creditors rights and to general equitable
principals.
3.3 Noncontravention. The execution, delivery and performance
by the Corporation of this Agreement do not and will not (i) violate or breach
the Articles of Incorporation or Bylaws of the Corporation, (ii) violate or
conflict with any applicable law, (iii) violate, breach, cause a default under
or otherwise give rise to a right of termination, cancellation or acceleration
with respect to (presently, with the giving of notice or the passage of time)
any material agreement, contract or instrument to which the Corporation is a
party or by which its assets are bound, or (iv) result in the creation or
imposition of any lien, pledge, mortgage, claim, charge or encumbrance upon any
of the assets of the Corporation.
3.4 Consents. Assuming the accuracy of the Stockholders'
representations and warranties in Section 4 hereof, no consent, authorization,
license, permit, registration or approval of, or exemption or other action by
any governmental authority or other person is required in connection with the
Corporation's execution and delivery of this Agreement, or with the performance
by the Corporation of its obligations hereunder, except, in each case, where any
such consent, authorization, license, permit, registration or approval has been
obtained and remains in full force and effect.
3.5 Exchange Shares. The Exchange Shares will, upon issuance
pursuant to the terms of this Agreement and the Corporation's receipt of the
deliveries set forth in Section 2 hereof, be duly and validly authorized and
issued, fully paid and non-assessable, free and clear of all liens, options,
rights of first refusal or other encumbrance.
4. Representations and Warranties of the Stockholders. The
Stockholders, and each of them, hereby represent and warrant to the Corporation
that the statements contained in this Section 4 are true, correct and complete
as of the date of this Agreement.
4.1 Execution and Delivery. The Stockholders have full power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby and thereby. All action on the part of each Stockholder
required to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby has been taken.
This Agreement has been duly and validly authorized, executed and delivered by
the Stockholders and constitutes a valid and binding obligation of the
Stockholders, enforceable against each in accordance with its respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or effecting creditors rights and to
general equitable principals.
4.2 Noncontravention. The execution, delivery and performance
by the Stockholders of this Agreement do not and will not (i) violate or
conflict with any applicable law, (ii) violate, breach, cause a default under or
otherwise give rise to a right of termination, cancellation or acceleration with
respect to (presently, with the giving of notice or the passage of time) any
material agreement, contract or instrument to which a Stockholder is a party or
by which any of his, her or its assets is bound, or (iv) result in the creation
or imposition of any lien, pledge, mortgage, claim, charge or encumbrance upon
any assets of a Stockholder.
4.3 Consents. No consent, authorization, license, permit,
registration or approval of or exemption or other action by any governmental
authority or other person is required in connection with the Stockholders'
execution and delivery of this Agreement or with the performance by the
Stockholders of their obligations hereunder, except in each case where any such
consent, authorization, license, permit, registration or approval has been
obtained and remains in full force and effect.
4.4 Ownership. Each Stockholder is the sole owner of the
shares of Series A Preferred Stock set forth opposite such Stockholder's name on
the Schedule of Holders, and no Stockholder has pledged, hypothecated or
otherwise encumbered the shares of Series A Preferred Stock set forth opposite
such Stockholder's name on the Schedule of Holders. Upon the date of this
Agreement and the delivery of the shares of Series A Preferred Stock to the
Corporation, the shares of Series A Preferred Stock shall be free of liens and
encumbrances of every type, nature or description.
4.5 Investment Intent. The Stockholders are acquiring the
Exchange Shares for investment for their own respective accounts and not with a
view to, or for re-sale in connection with, any public distribution, and
understand that the Exchange Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the representations of the Stockholders set
forth herein.
4.6 Restricted Securities. The Stockholders understand and
agree that the Exchange Shares may not be sold, transferred or otherwise
disposed of without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective Registration Statement
covering the Exchange Shares, or an available exemption from registration under
the Securities Act, the Exchange Shares must be held indefinitely. In
particular, the Stockholders are aware that the Exchange Shares constitute
"Restricted Securities" as defined in Rule 144 promulgated under the Securities
Act and may not be sold pursuant to such Rule unless all of the conditions of
that Rule are met. The Stockholders agree that the certificate or certificates
representing the Exchange Shares may bear such restrictive legends as may be
deemed necessary or appropriate by the Board of Directors of the Corporation, in
order to denote and clarify their status as Restricted Securities.
4.7 Disclosure. The Stockholders understand that their
representations and warranties set forth herein shall be deemed material and to
have been relied upon by the Corporation. No representation or warranty by the
Stockholders in this Agreement, and no written statement contained in any
document, certificate or other writing delivered by a Stockholder to the
Corporation in connection with this Agreement contains any untrue statement of
material fact, or omits a material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
5. Indemnification.
5.1 Indemnification of Stockholders. The Corporation hereby
indemnifies and holds the Stockholders, and each of them and their respective
agents, consultants and advisors harmless from and against any and all losses,
claims, damages, taxes (of any nature), expenses (including costs of
investigation and reasonable legal fees and expenses at trial or on appeal and
without initiation of suit) or other liabilities which arise out of or result
from any misrepresentation or breach of any warranty, representation or covenant
of the Corporation in the Agreement.
5.2 Indemnification of the Corporation. The Stockholders, and
each of them, hereby indemnify and hold the Corporation and its directors,
officers, agents, consultants and advisors harmless from and against any and all
losses, claims, damages, taxes (of any nature), expenses (including costs of
investigations and reasonable legal fees and expenses at trial or on appeal and
without initiation of suit) or other liabilities which arise out of or result
from any misrepresentation or breach of any warranty, representation or covenant
of the Stockholders in this Agreement.
5.3 Indemnification Procedure. If any action is commenced
against, or claim is made by, an indemnified party under this Section 5, the
indemnified party shall give notice to the indemnifying party of such action or
claim covered by this indemnity within thirty (30) days following the
indemnified party's knowledge thereof. To the extent that failure to give such
notice unduly prejudices the indemnifying party and causes additional damages to
be incurred, the indemnifying party shall not be liable for such additional
damages. The failure to give such notice will not relieve the indemnifying party
from any liability which it may otherwise have to the indemnified party whether
arising hereunder or otherwise. With respect to each such notice, the
indemnifying party shall immediately retain counsel satisfactory to the
indemnified party and take such other actions as are necessary to defend the
indemnified party or to discharge the indemnity obligations hereunder. The
Corporation and the Stockholders seeking indemnification or from whom
indemnification is being sought shall participate in all decisions regarding the
defense of any action to be taken concerning the indemnified obligations or the
discharge thereof. If the indemnifying party fails to notify the indemnified
party within thirty (30) days of receipt of the indemnified party's notice that
the indemnifying party must retain counsel and take such other actions as are
necessary, the indemnified party may, at its option, conduct such defense at the
expense of the indemnifying party and the indemnifying party shall pay on demand
any amounts owed hereunder to the indemnified party.
6. General Provisions.
6.1 Waiver; Remedies. No failure on the part of any party to
exercise, and no delay in exercising a right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege, and no waiver whatever shall be valid, unless in writing signed by
the other party or parties to be charged and then only to the extent
specifically set forth in such writing. All remedies, rights, powers and
privileges, either under this Agreement or by law or otherwise afforded to the
parties to this Agreement, shall be cumulative and shall not be exclusive of any
remedies, rights, powers and privileges provided by law. Each party hereto may
exercise all such remedies afforded to it in any order of priority.
6.2 Successors. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, personal representatives, successors and
assigns of the parties. No party shall delegate its or their duties or
obligations hereunder without the written consent of the other parties, which
consent shall not be unreasonably withheld.
6.3 Governing Law. The rights and obligations of the parties
pursuant to this Agreement shall be governed by and construed in accordance with
the laws of the State of Utah, without giving effect to any choice or conflict
of law rule or provision (whether of the State of Utah or other jurisdiction)
which would cause the application of any law or rule other than of the State of
Utah.
6.4 Severability. Should any term or provision of this
Agreement or the application thereof to any circumstance, in any jurisdiction
and to any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable such term or
provision in any other jurisdiction, the remaining terms and provision of this
Agreement or the application of such terms and provisions to circumstances other
than those as to which it is held invalid or unenforceable.
6.5 Incorporation of Exhibits and Schedules. All exhibits and
schedules attached to this Agreement are incorporated herein as though fully set
forth.
6.6 Entire Agreement. This Agreement, together with its
exhibits and schedules, constitutes the entire agreement among the parties
pertaining to the subject matter herein and supersedes all prior and
contemporaneous agreements, representation and understandings of the parties in
connection with the transactions contemplated hereby. No supplement,
modification or amendment shall be binding unless executed in writing by all
parties.
6.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original instrument and
all of which together shall be considered one and the same agreement. Delivery
and receipt of executed pages by facsimile transmission shall constitute
effective and binding executing and delivery of this Agreement.
6.8 Expenses. Except as otherwise expressly provided herein,
the parties shall bear their own expenses, including the fees and expenses of
any attorneys, accountants or others engaged by them incurred in connection with
this Agreement and the transaction contemplated hereby.
6.9 Attorneys' Fees. Should any litigation be commenced
between the parties or their representatives concerning any provision of this
Agreement or the rights and duties of any person in relation thereto, the party
prevailing in such litigation shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum as and for its attorneys' fees and
costs and court costs in such litigation which shall be determined by the court
in such litigation or in a separate action brought for that purpose.
6.10 Arbitration. Any controversy arising under, out of, in
connection with, or relating to, this Agreement, and any amendment thereof, or
the breach thereof, shall be determined and settled by arbitration in Salt Lake
City, Utah, in accordance with the rules of the American Arbitration
Association. Any award rendered therein shall be final and binding on each and
all of the parties thereto and their personal representatives, and judgment may
be entered thereon in any court having competent jurisdiction thereon. The
prevailing party shall be entitled to recover, from the other party, his full
costs incurred as a result of the arbitration, including reasonable attorneys'
fees.
6.11 Advisers' Fees. Each party hereto shall bear his own
legal, accounting, or other expenses with respect to the consummation of the
transaction contemplated herein.
In witness whereof, the parties hereto have signed or caused this
Agreement to be signed in their respective names as of the day and date first
above written.
Wireless Cable & Communications, Inc.
___________________________________
Xxxxx X'Xxxxxxxx,
Chief Executive Officer
Petroleora Argentina San Jorge SA Fondelec Essential Services
Growth Fund, L.P.
By _____________________ By________________________
______________________ __________________________
_______________________ __________________________
Pegasus Fund XX Xxxxxxx A Floor & Associates
By _____________________ By________________________
______________________ __________________________
_______________________ __________________________
_________________________ ___________________________
Xxxxxx X'Xxxxxxxx Xxxxx X'Xxxxxxxx
_________________________ __________________________
Xxxx X'Xxxxxxxx Xxxxx X'Xxxxxxxx
_________________________ __________________________
Xxxxx Xxxxx Xxxxx Xxxxxxxx
_________________________ Xxxxxxx Enterprises, L.L.C.
Xxxx Xxxxxxxx
By_________________________
_________________________
_________________________
EXHIBIT A
SCHEDULE OF SHAREHOLDERS
Name No. of Shares
Petrolora Argentina San Jorge SA 609,709 Series A Preferred
________ Exchange Shares
Fondelec Essential Services Growth 595,417 Series A Preferred
________ Exchange Shares
Pegasus Fund LP 14,292 Series A Preferred
________ Exchange Shares
Floor Emanuel A Floor & Associates 19,981 Series A Preferred
________ Exchange Shares
Xxxxxx X'Xxxxxxxx 1,192,872 Series A Preferred
________ Exchange Shares
Xxxxx X'Xxxxxxxx 359,660 Series A Preferred
________ Exchange Shares
Xxxx X'Xxxxxxxx 199,811 Series A Preferred
________ Exchange Shares
Xxxxx X'Xxxxxxxx 89,915 Series A Preferred
________ Exchange Shares
Xxxxx Xxxxx 89,915 Series A Preferred
________ Exchange Shares
Xxxxx Xxxxxxxx 39,962 Series A Preferred
________ Exchange Shares
Xxxx Xxxxxxxx 5,994 Series A Preferred
________ Exchange Shares
Xxxxxxx Enterprises 39,962 Series A Preferred
________ Exchange Shares
