SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of the date of acceptance set forth below, is entered into by and among 5G WIRELESS COMMUNICATIONS, INC., a Nevada corporation, with headquarters located at 0000 X. Xxxxxx Xxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 (the "Company"), and each entity named on the signature page hereto (each, a "Buyer") (each agreement with a Buyer being deemed a separate and independent agreement between the Company and such Buyer, except that each Buyer acknowledges and consents to the rights granted to each other Buyer under such agreement and the Transaction Agreements (as defined below).
WITNESSETH:
WHEREAS, the Company and the Buyers are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and Section 4(2) of the 1933 Act; and
WHEREAS, the Buyers wish to purchase, upon the terms and subject to the conditions of this Agreement, up to an aggregate amount of $400,000.00 of notes of the Company (the "Notes"), which will be convertible into shares of Common Stock, par value $0.001 per share, of the Company (the "Common Stock"), upon the terms and subject to the conditions of such Notes, and subject to acceptance of this Agreement by the Company.
NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase.
(i) The undersigned hereby agrees to purchase from the Company Notes in the principal amount stated on the signature page hereof, having the terms and conditions and being in the form attached hereto as Exhibit A.
(ii) Subject to the terms and conditions of this Agreement and the other Transaction Agreements (as defined below), the Buyers will purchase the Notes at a Closing (the "Closing") held on a Closing Date (as defined below).
(iii) The purchase price to be paid by the Buyers shall be equal to the face amount of the Notes being purchased on such Closing Date, and shall be payable in United States Dollars.
b. Certain Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:
(i) "Affiliate" means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled by or is under common control with such specified Person.
(ii) "Certificates" means the relevant Notes duly executed on behalf of the Company and issued in the name of the respective Buyer.
(iii) "Closing Date" means the date of a Closing.
(iv) "Conversion Shares" means the shares of Common Stock issuable upon conversion of the Notes.
(v) "Effective Date" means the effective date of the Registration Statement covering the Registrable Securities (as those terms are defined in the Registration Rights Agreement defined below) for the Notes issued on the Closing Date.
(vi) "Escrow Agent" means First Union National Bank, Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000.
(vii) "Notes" means all or any portion of the Notes.
(viii) "Person" means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.
(ix) "Purchase Price" means the purchase price for the Notes.
(x) "SEC Documents" shall mean, as of a particular date, the Company's most recently filed Form 10-K and all documents filed with the SEC subsequent to the date of such Form 10-K.
(xi) "Securities" means the Notes and the Common Stock issuable upon conversion of the Notes.
(xii) "Shares" means the shares of Common Stock representing any or all of the Conversion Shares.
c. Form of Payment; Delivery of Certificates.
(i) The Buyers shall pay the Purchase Price for the relevant Notes by delivering immediately available good funds in United States Dollars to the Escrow Agent for the benefit of Company at the Closing on the Closing Date, subject to the payment of fees and expenses as provided in Section 12(a) and 12(b).
(ii) No later than the Closing Date, but in any event upon payment by the Buyers to the Escrow Agent of the relevant Purchase Price, the Company shall deliver the relevant Certificates to the Escrow Agent for the benefit of Buyers.
d. Method of Payment. Payment to the Company of the Purchase Price shall be made at the Closing by wire transfer of funds to:
Beneficiary Account Name: 5G Wireless Communications, Xxx.0000 X. Xxxxxx
Xxx, Xxxxx 000Xxx Xxxxx, Xxxxxx 00000
Beneficiary Account No.: 3572000434
Incoming Account No.: 5000000016439
ABA/Transit No.: 053 000 219
Attention: CT-4882 New York
Beneficiary Bank: First Union National BankOne World Trade Center, Suite
2. BUYER'S REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
Each Buyer represents and warrants to, and covenants and agrees with, the Company as follows:
a. Without limiting any Buyer's right to sell the Common Stock pursuant to the Registration Statement, each Buyer is purchasing the Notes and will be acquiring the Shares for its own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.
b. If any Buyer is an individual, such Buyer confirms that (i) (either alone, or with his or her advisor, if any) he or she has carefully reviewed the risks of, and other considerations relating to, investment in the Company and (either alone, or with his or her advisor, if any) possesses the knowledge and experience in financial and business matters generally, and in illiquid investments in particular, to be capable of evaluating the merits and risks (including, without limitation, the economic and tax risks) of an investment in the Company and of making an informed investment decision; (ii) he or she has the financial means to make and pay for his or her subscription and can bear the risk of loss of his or her entire investment; and (iii) he or she had individual income in excess of U.S.$200,000, or joint income with his or her spouse in excess of U.S.$300,000, in each of the calendar years 1999 and 2000 and reasonably expects to have individual income in excess of U.S.$200,000, or joint income in excess of U.S.$300,000, in the calendar year 2001, or has individual net worth in excess of U.S.$1,000,000.
c. If any Buyer is not an individual, such Buyer is (i) an "accredited investor" as that term is defined in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Securities.
d. The Buyer understands that the Notes have not been and will not be registered under the 1933 Act or under the securities or "blue sky" laws of any state or any jurisdiction outside the United States and, therefore, cannot be resold unless they are registered under the 1933 Act (and, in some cases, under state securities or "blue sky" laws or the laws of other jurisdictions) or an exemption from registration is available and that he or she will have no right to require registration of the Notes.
e. All subsequent offers and sales of the Notes and the Shares by each Buyer shall be made pursuant to registration of the Shares under the 1933 Act or pursuant to an exemption from registration.
f. Each Buyer understands that the Notes are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyers set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyers to acquire the Notes.
g. The Buyer reviewed the SEC Documents and has conducted his or her own independent analysis of the prospective operations and assets of the Company and investment in the Securities. The Buyer has relied solely upon the such independent investigations made by the Buyer in making a decision to purchase the Securities and has not received from the Company, officers thereof, or any other person or entity acting on behalf of the Company any representations or warranties that are inconsistent with the SEC Documents.
h. Each Buyer understands that its investment in the Securities involves a high degree of risk that the Buyer will lose all or part of its investment.
i. The Buyer confirms that he or she has adequate means of providing for contingencies; the Buyer has no need for liquidity in this investment; and the Buyer can afford the loss of this entire investment.
j. The Buyer confirms that, except for the Note in the form attached hereto as Exhibit A, neither the Buyer or his or her advisors, if any, has been furnished any offering materials or literature by the Company, its agents, officers, or directors.
k. The Buyer confirms that he or she has the full right and power to perform pursuant to this Agreement, or is executing this Agreement in a representative or fiduciary capacity, that he or she has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual for whom he or she is executing this Agreement, and such individual has full right and power to perform pursuant to this Agreement.
l. Each Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities.
m. If any Buyer is not an individual, such Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. This Agreement and the Transaction Agreements have been duly and validly authorized, executed and delivered on behalf of the Buyer and create a valid and binding agreement of the Buyer enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to the Buyer that:
a. Concerning the Notes and the Shares. There are no preemptive rights of any stockholder of the Company to acquire the Notes or the Shares.
b. Reporting Company Status. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a material adverse effect on the business, operations or condition (financial or otherwise) or results of operation of the Company and its subsidiaries taken as a whole (a "Material Adverse Effect"). The Company has registered its Common Stock pursuant to Section 12 of the 1934 Act, and the Common Stock is listed (or quoted) and traded on the OTC Bulletin Board Market of the National Association of Securities Dealers, Inc. The Company has received no notice, either oral or written, with respect to the continued eligibility of the Common Stock for such listing (or quoting), and the Company has maintained all requirements for the continuation of such listing (or quoting).
c. Authorized Shares. The authorized capital stock of the
Company consists of (i) 50,000,000 shares of Common Stock, par value $0.001
per share, of which 28,520,450 shares are issued and outstanding as of the
date of this Agreement. All issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. The Company has sufficient authorized and unissued shares of
Common Stock as may be necessary to effect the issuance of the Shares. The
Shares have been duly authorized and, when issued upon conversion of, or as
interest on, the Notes will be duly and validly issued, fully paid and non
assessable and will not subject the holder thereof to personal liability by
reason of being such holder. At all times, the Issuer shall keep available
Common Stock duly authorized for issuance against the Notes.
d. Securities Purchase Agreement; Registration Rights
Agreement. This Agreement and the Registration Rights Agreement between the
Company and the Buyers, substantially in the form of Exhibit B annexed hereto
(the "Registration Rights Agreement"), and the transactions contemplated
thereby, have been duly and validly authorized by the Company. This Agreement
has been duly executed and delivered by the Company. Each of this Agreement,
the Notes and the Registration Rights Agreement, when executed and delivered
by the Company, are and will be, valid and binding agreements of the Company,
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
e. Non contravention. The execution and delivery of this
Agreement, the Note and the Registration Rights Agreement by the Company, the
issuance of the Securities, and the consummation by the Company of the other
transactions contemplated by this Agreement, the Registration Rights Agreement
and the Notes do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under
(i) the articles of incorporation or by laws of the Company, each as
currently in effect, (ii) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the Company is a party or by which
it or any of its properties or assets are bound, including any listing
agreement for the Common Stock, except as herein set forth, (iii) to its
knowledge, any existing applicable law, rule, or regulation or any applicable
decree, judgment, or order of any court, United States federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any of its properties or assets, or (iv) the
Company's listing agreement for its Common Stock, except such conflict, breach
or default which would not have a Material Adverse Effect.
f. Approvals. No authorization, approval or consent of
any court, governmental body, regulatory agency, self regulatory
organization, or stock exchange or market or the stockholders of the Company
is required to be obtained by the Company for the issuance and sale of the
Securities to the Buyers as contemplated by this Agreement, except such
authorizations, approvals and consents that have been obtained.
g. SEC Filings. None of the Company's SEC Documents
contained, at the time it was filed, any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements made therein in light of the circumstances
under which they were made, not misleading. The Company has since March 1,
2000 timely filed all requisite forms, reports and exhibits thereto with the
SEC.
h. Absence of Certain Changes. Since December 31, 1999,
there has been no material adverse change and no material adverse development
in the business, properties, operations, condition (financial or otherwise),
or results of operations of the Company, except as disclosed in the Company's
SEC Documents. Since December 31, 1999, except as provided in the Company's
SEC Documents, the Company has not (i) incurred or become subject to any
material liabilities (absolute or contingent) except liabilities incurred in
the ordinary course of business consistent with past practices; (ii)
discharged or satisfied any material lien or encumbrance or paid any material
obligation or liability (absolute or contingent), other than current
liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to stockholders with respect to its capital stock, or purchased or
redeemed, or made any agreements to purchase or redeem, any shares of its
capital stock; (iv) sold, assigned or transferred any other tangible assets,
or canceled any debts or claims, except in the ordinary course of business
consistent with past practices; (v) suffered any substantial losses or waived
any rights of material value, whether or not in the ordinary course of
business, or suffered the loss of any material amount of existing business;
(vi) made any changes in employee compensation, except in the ordinary course
of business consistent with past practices; or (vii) experienced any material
problems with labor or management in connection with the terms and conditions
of their employment.
i. Full Disclosure. There is no fact known to the
Company (other than general economic conditions known to the public generally
or as disclosed in the Company's SEC Documents) that has not been disclosed in
writing to the Buyers that (i) would reasonably be expected to have a Material
Adverse Effect, (ii) would reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations pursuant to this
Agreement or any of the agreements contemplated hereby (collectively,
including this Agreement, the "Transaction Agreements"), or (iii) would
reasonably be expected to materially and adversely affect the value of the
rights granted to the Buyers in the Transaction Agreements.
j. Absence of Litigation. Except as set forth in the
Company's SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, wherein
an unfavorable decision, ruling or finding would have a Material Adverse
Effect or which would adversely affect the validity or enforceability of, or
the authority or ability of the Company to perform its obligations under, any
of the Transaction Agreements.
k. Absence of Events of Default. Except as set forth in
Section 3(e) hereof, no Event of Default (or its equivalent term), as defined
in the respective agreement to which the Company is a party, and no event
which, with the giving of notice or the passage of time or both, would become
an Event of Default (or its equivalent term) (as so defined in such
agreement), has occurred and is continuing, which would have a Material
Adverse Effect.
l. Prior Issues. During the twelve (12) months preceding
the date hereof, the Company has not issued any convertible securities or any
shares of the Common Stock or preferred stock of the Company.
m. No Undisclosed Liabilities or Events. The Company has no
liabilities or obligations other than those disclosed in the Company's SEC
Documents or those incurred in the ordinary course of the Company's business
since December 31, 1998, and which individually or in the aggregate, do not or
would not have a Material Adverse Effect. No event or circumstances has
occurred or exists with respect to the Company or its properties, business,
condition (financial or otherwise), or results of operations, which, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed. There are no proposals currently under consideration
or currently anticipated to be under consideration by the Board of Directors
or the executive officers of the Company which proposal would (x) change the
certificate of incorporation or other charter document or by laws of the
Company, each as currently in effect, with or without shareholder approval,
which change would reduce or otherwise adversely affect the rights and powers
of the shareholders of the Common Stock or (y) materially or substantially
change the business, assets or capital of the Company, including its interests
in subsidiaries.
n. No Default. The Company is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any material indenture, mortgage, deed of trust or
other material instrument or agreement to which it is a party or by which it
or its property is bound.
o. No Integrated Offering. Neither the Company nor any of
its affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since July 1, 2000, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under Rule
506 of Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.
p. Dilution. The number of Shares issuable upon conversion
of the Notes may increase substantially in certain circumstances, including,
but not necessarily limited to, the circumstance wherein the market price of
the Common Stock declines prior to the conversion of the Notes. The
Company's executive officers and directors have studied and fully understand
the nature of the securities being sold hereby and recognize that they have a
potential dilutive effect and further that the conversion of the Note and/or
sale of the Conversion Shares may have an adverse effect on the market price
of the Common Stock. The board of directors of the Company has concluded, in
its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that its obligation to
issue the Shares upon conversion of the Notes is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyers acknowledge that (1)
the Notes have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyers shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that
the Securities to be sold may be sold pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms
of said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other person is under any obligation to register the
Securities (other than pursuant to the Registration Rights Agreement) under
the 1933 Act or to comply with the terms and conditions of any exemption
thereunder.
b. Restrictive Legend. The Buyers acknowledge and agree
that the Notes, and, until such time as the Shares have been registered under
the 1933 Act as contemplated by the Registration Rights Agreement and sold in
accordance with an effective Registration Statement, certificates and other
instruments representing any of the Securities shall bear a restrictive legend
in substantially the following form (and a stop transfer order may be placed
against transfer of any such Securities):
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
c. Registration Rights Agreement. The parties hereto agree
to enter into the Registration Rights Agreement on or before the initial
Closing Date.
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Securities to the Buyers
required under any United States laws and regulations applicable to the
Company, or by any domestic securities exchange or trading market, and to
provide a copy thereof to the Buyers promptly after such filing.
e. Reporting Status. So long as the any of the Buyers
beneficially own any of the Securities, the Company shall file all reports
required to be filed with the SEC pursuant to Section 13 or 15(d) of the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination. Except as otherwise
set forth in this Agreement and the Transaction Agreements, the Company will
take all reasonable action under its control to obtain and to continue the
listing (or quoting) and trading of its Common Stock (including, without
limitation, all Registrable Securities) on the OTC Bulletin Board Market of
the National Association of Securities Dealers, Inc. and will comply in all
material respects with the Company's reporting, filing and other obligations
under the by laws or rules of the National Association of Securities Dealers,
Inc. ("NASD").
f. Use of Proceeds. The Company will use the proceeds
from the sale of the Notes (excluding amounts paid by the Company for legal
fees in connection with the sale of the Notes) for internal working capital
purposes.
g. Certain Agreements. (i) The Company covenants and
agrees that it will not, without the prior written consent of the Buyers,
enter into any subsequent or further offer or sale of Common Stock or
securities convertible into Common Stock (collectively, "New Common Stock")
with any third party pursuant to a transaction which in any manner permits the
sale of the New Common Stock on any date which is earlier than ninety (90)
days from the last day of the calendar month in which the Effective Date
occurs. The limitations described in this section shall not apply to (w) any
underwritten offering of securities made pursuant to a written underwriting
agreement with a nationally or regionally recognized investment bank, (x)
any issuance of securities or assumption of debt made in connection with a
merger, acquisition of or purchase of the assets of another entity where the
purpose of such issuance is not to raise equity capital, or (y) any issuance
of warrants made to a bank or other commercial lending institution in
connection with a loan made to the Company by such bank or institution.
h. Available Shares. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield two hundred percent (200%) of the number of
shares of Common Stock issuable at conversion as may be required to satisfy
the conversion rights of the Buyers pursuant to the terms and conditions of
the Notes which have been issued and not yet converted. If at any time, the
Company does not have available an amount of authorized and non issued Shares
necessary to satisfy full Conversion of the then outstanding amount of the
Notes, the Company shall call and hold a special meeting within 30 days of
such occurrence, for the sole purpose of increasing the number of shares
authorized. Management of the Company shall recommend to shareholders to
vote in favor of increasing the number of Common Stock authorized. Management
shall also vote all of its shares in favor of increasing the number of Common
Stock authorized.
i. Reimbursement. If (i) any Buyer, other than by reason
of its gross negligence, willful misconduct or breach of law, becomes involved
in any capacity in any action, proceeding or investigation brought by any
stockholder of the Company, in connection with or as a result of the
consummation of the transactions contemplated by the Transaction Agreements,
or if such Buyer is impleaded in any such action, proceeding or investigation
by any Person, or (ii) any Buyer, other than by reason of its gross
negligence, willful misconduct or breach of law, becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC against
or involving the Company or in connection with or as a result of the
consummation of the transactions contemplated by the Transaction Agreements,
or if such Buyer is impleaded in any such action, proceeding or investigation
by any Person, then in any such case, the Company will reimburse such Buyer
for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, as such
expenses are incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to any
affiliates of the Buyers who are actually named in such action, proceeding or
investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of the Buyers and any such Affiliate,
and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Buyers and any such
Affiliate and any such Person. Except as otherwise set forth in the
Transaction Agreements, the Company also agrees that neither any Buyer nor any
such Affiliate, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any person asserting claims on
behalf of or in right of the Company in connection with or as a result of the
consummation of the Transaction Agreements except to the extent that any
losses, claims, damages, liabilities or expenses incurred by the Company
result from the gross negligence or willful misconduct of such Buyer or from a
breach of the representations, covenants and conditions contained herein or
from a breach of law.
5. TRANSFER AGENT INSTRUCTIONS.
a. Promptly following the purchase by the Buyers of the
Notes in accordance with Section 1(c) hereof, the Company will irrevocably
instruct its transfer agent to issue Common Stock from time to time upon
conversion of the Notes in such amounts as specified from time to time by the
Company to the transfer agent, bearing the restrictive legend specified in
Section 4(b) of this Agreement prior to registration of the Shares under the
1933 Act, registered in the name of the respective Buyer or its permitted
assigns and in such denominations to be specified by such Buyer in connection
with each conversion of the Notes. The Company warrants that if the Buyer is
not in breach of the representations and warranties contained in this
Agreement, no instruction other than such instructions referred to in this
Section 5 and stop transfer instructions to give effect to Section 4(a) hereof
prior to registration and sale of the Shares under the 1933 Act will be given
by the Company to the transfer agent and that the Shares shall otherwise be
freely transferable on the books and records of the Company as and to the
extent provided in this Agreement, the Registration Rights Agreement, and
applicable law. Nothing in this Section shall affect in any way the Buyers'
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities. If any Buyer provides the Company with an opinion
of counsel reasonably satisfactory to the Company that registration of a
resale by such Buyer of any of the Securities in accordance with clause (1)(B)
of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this
Agreement) permit the transfer of the Securities and, in the case of the
Converted Shares or the Warrant Shares, as the case may be, promptly instruct
the Company's transfer agent to issue one or more certificates for Common
Stock without legend in such name and in such denominations as specified by
the Buyer.
b. (i) The Company will permit the Buyers to exercise
their rights to convert the Notes by telecopying or delivering an executed and
completed Notice of Conversion to the Company and delivering, within five (5)
business days thereafter, the original Notes being converted to the Company by
express courier, with a copy to the transfer agent.
(ii) The term "Conversion Date" means, with respect to any conversion elected
by the holder of the Notes, the date specified in the Notice of Conversion,
provided the copy of the Notice of Conversion is given either via mail or
facsimile to or otherwise delivered to the Company in accordance with the
provisions hereof so that it is received by the Company on or before such
specified date.
(iii) The Company will transmit the certificates representing the Converted
Shares issuable upon conversion of any Notes (together, unless otherwise
instructed by the Buyer, with Notes not being so converted) to the Buyer at
the address specified in the Notice of Conversion (which may be the Buyer's
address for notices as contemplated by Section 11 hereof or a different
address) via express courier, by electronic transfer or otherwise, within five
(5) business days if the address for delivery is in the United States and
within seven (7) business days if the address for delivery is outside the
United States (such fifth business day or seventh business day, as the case
may be, the "Delivery Date") after (A) the business day on which the Company
has received both of the Notice of Conversion (by facsimile or other delivery)
and the original Notes being converted (and if the same are not delivered to
the Company on the same date, the date of delivery of the second of such
items) or (B) the date an interest payment on the Note, which the Company has
elected to pay by the issuance of Common Stock, as contemplated by the Notes,
was due.
c. From and after the date on which the Shares have been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement, the failure to issue unrestricted, freely tradable Shares to the
Buyers upon Conversion shall be considered an Event of Default, which if not
cured within ten (10) days, shall entitle the Buyers to accelerate full
repayment of the Notes then outstanding. The Company acknowledges that the
failure to honor a Notice of Conversion, shall cause definable financial
hardship on the Buyers.
d. The Company will authorize its transfer agent to give
information to a Buyer or such Buyer's representative relating to the transfer
of the Company's shares of Common Stock to the Buyer, upon the request of the
Buyer or any such representative. The Company will provide such Buyer with a
copy of the authorization so given to the transfer agent.
e. Each Buyer shall be entitled to exercise its conversion
privilege with respect to the Notes notwithstanding the commencement of any
case under 11 U.S.C. §101 et seq. (the "Bankruptcy Code"). In the event
the Company is a debtor under the Bankruptcy Code, the Company hereby waives,
to the fullest extent permitted, any rights to relief it may have under 11
U.S.C. §362 in respect of such Buyer's conversion privilege. The
Company hereby waives, to the fullest extent permitted, any rights to relief
it may have under 11 U.S.C. §362 in respect of the conversion of the
Notes. The Company agrees, without cost or expense to such Buyer, to take or
to consent to any and all action necessary to effectuate relief under 11
U.S.C. §362.
6. CLOSING DATE.
a. The Closing Date shall occur on the date which is the
first trading day after each of the conditions contemplated by Sections 7 and
8 hereof shall have either been satisfied or been waived by the party in whose
favor such conditions run.
b. Notwithstanding any other provision in this Agreement,
one or more Buyers who have deposited monies into escrow pursuant to this
Agreement ("Funded Buyers") may elect to proceed with a Closing prior to the
receipt into escrow of the full $400,000 contemplated by this Agreement (an
"Early Closing") if: (i) each Funded Buyer who wishes to participate in such
Early Closing has consented to such Early Closing in writing and (ii) the
aggregate funds to be invested at such Early Closing shall be not less than
$200,000. All conditions to the Buyers' obligations to purchase Notes shall
be satisfied in connection with the Early Closing (and in connection with any
subsequent Closing). A Buyer which consents to participate in an Early
Closing shall be deemed to acknowledge that there can be no guarantees that
subsequent investments will be made in the Company pursuant to this Agreement.
c. If a Closing has not occurred with respect to funds in
escrow by __________, 2001, then such funds shall be returned to the
respective Buyers within 5 days thereof.
d. The Closing of each purchase and issuance of Notes
shall occur on the Closing Date at the offices of Sidley Xxxxxx Xxxxx & Xxxx
LLP , Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX and shall take place no later than
3:00 P.M., New York time, on such day or such other time as is mutually agreed
upon by the Company and the Buyers.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyers understand that the Company's obligation to sell the Notes to the
Buyer pursuant to this Agreement on a Closing Date is conditioned upon:
a. The execution and delivery of this Agreement by the
Buyers;
b. Delivery by the Buyers to the Escrow Agent of good
funds as payment in full of an amount equal to the Purchase Price for the
Notes in accordance with this Agreement;
c. The accuracy on the Closing Date of the
representations and warranties of the Buyers contained in this Agreement, each
as if made on such date, and the performance by the Buyers on or before such
date of all covenants and agreements of the Buyers required to be performed on
or before such date; and
d. There shall not be in effect any law, rule or
regulation prohibiting or restricting the transactions contemplated hereby, or
requiring any consent or approval which shall not have been obtained.
8. CONDITIONS TO THE BUYERS' OBLIGATION TO PURCHASE.
The Company understands that the Buyers' obligation to purchase the Notes on a
Closing Date is conditioned upon:
a. The execution and delivery of this Agreement and
the Registration Rights Agreement by the Company;
b. Delivery by the Company to the Escrow Agent of the
Certificates in accordance with this Agreement;
c. The accuracy in all material respects on the
Closing Date of the representations and warranties of the Company contained in
this Agreement, each as if made on such date, and the performance by the
Company on or before such date of all covenants and agreements of the Company
required to be performed on or before such date;
d. On the Closing Date, the Buyers shall have received
an opinion of counsel for the Company, dated as of the Closing Date, in form,
scope and substance reasonably satisfactory to the Buyers, substantially to
the effect set forth in Exhibit C annexed hereto;
e. There shall not be in effect any law, rule or
regulation prohibiting or restricting the transactions contemplated hereby, or
requiring any consent or approval which shall not have been obtained;
f. From and after the date hereof to and including
the Closing Date, the trading of the Common Stock shall not have been
suspended by the SEC or the NASD and trading in securities generally on the
New York Stock Exchange or The NASDAQ/National Market System shall not have
been suspended or limited, nor shall minimum prices been established for
securities traded on The NASDAQ/National Market System, nor shall there be any
outbreak or escalation of hostilities involving the United States or any
material adverse change in any financial market that in either case in the
reasonable judgment of the Buyers makes it impracticable or inadvisable to
purchase the Notes; and
g. Payment by the Company of all amounts due pursuant
to Section 12 of this Agreement and any other fees and expenses which are the
obligation of the Company under this Agreement or the Transaction Documents.
9. GOVERNING LAW; MISCELLANEOUS.
a. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions. To the extent determined by such
court, the Company shall reimburse the Buyers for any reasonable legal fees
and disbursements incurred by the Buyers in enforcement of or protection of
any of its rights under any of the Transaction Agreements.
b. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
c. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto.
d. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
e. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto.
f. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original.
g. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
h. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement
or the validity or enforceability of this Agreement in any other jurisdiction.
i. This Agreement may be amended only by the written
consent of a majority in interest of the holders of the Notes and an
instrument in writing signed by the Company.
j. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
10. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of
(a) the date delivered, if delivered by personal delivery as against written
receipt therefor or by confirmed facsimile transmission,
(b) the seventh business day after deposit, postage prepaid, in the United
States Postal Service by registered or certified mail, or
(c) the third business day after mailing by next day express courier, with
delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days advance written notice similarly given to each of the other
parties hereto):
COMPANY: 5G Wireless Communications, Xxx.0000 X. Xxxxxx Xxx, Xxxxx 000Xxx
Xxxxx, Xxxxxx 00000
Attn: Chief Financial OfficerTelephone No.: 604-273-7270Telecopier No.:
604-207-0565
BUYERS: At the address set forth on the signature page of this Agreement.
with copies to:
Hunter Singerc/o May Xxxxx Group, Xxx.Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Xxx
Xxxx, XX 00000
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's
and the Buyers' representations and warranties herein shall survive for a
period of twelve (12) months after the respective Closing and shall inure to
the benefit of the Buyers and the Company and their respective successors and
assigns.
12. FEES; EXPENSES.
a. At each Closing May Xxxxx Group, Inc. shall receive
cash compensation equal to 10% of the Notes being sold at such Closing and at
the initial Closing the Company shall issue one or more warrants (the
"Warrants") to purchase 300,000 shares of the Common Stock to May Xxxxx Group,
Inc.
b. At the initial Closing, the Company shall pay Sidley
Xxxxxx Xxxxx & Xxxx LLP the sum of $15,000 for legal fees and expenses
incurred in the transaction consummated hereunder and in connection with the
preparation of this Agreement and the Private Equity Subscription Agreement,
dated the date hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyers and
the Company as of the date set forth below.
Date: July ___, 2001
COMPANY:
5G WIRELESS COMMUNICATIONS, INC.
By:
Title:
BUYER:
Name of Buyer:
By:(Signature of Authorized Person)
Printed Name and Title
Address:
Telephone:
Facsimile:
Jurisdiction of Incorporation:
Principal Amount of Notes to be Purchased: $
Exhibit A
FORM OF NOTE
Exhibit B
REGISTRATION RIGHTS AGREEMENT
Exhibit C
FORM OF OPINION OF COMPANY COUNSEL
TO BE DELIVERED
PURSUANT TO SECTION 8(d)
(i) The Company has been duly incorporated, is validly
existing and is in good standing as a corporation under the laws of the State
of Nevada.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the SEC Documents and to enter into and perform its obligations under the
Transaction Documents.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(iv) The Transaction Documents, including the Notes, have been
duly authorized, executed and delivered by the Company, and each constitutes
the legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms.
(v) The Conversion Shares have been duly authorized for
issuance and sale to the Buyer pursuant to the Securities Purchase Agreement
and when issued by the Company and delivered by the Company as provided in the
Transaction Documents, will be fully paid, validly issued and non-assessable;
and no holder of the Conversion Shares is or will be subject to personal
liability by reason of being such a holder. The Company has reserved an
adequate number of shares of Common Stock for issuance pursuant to the
Securities Purchase Agreement.
(vi) The issuance of the Conversion Shares is not, and will
not be, subject to preemptive or other similar rights of any securityholder of
the Company.
(vii) The form of certificates used to evidence the Conversion
Shares and the form of note used to represent the Notes comply in all material
respects with all applicable statutory requirements, with any applicable
requirements of the charter and by-laws of the Company and the requirements of
the market[s] in which the Common Stock trades and is listed or is quoted.
(viii) To the best of our knowledge, except as otherwise
disclosed in the SEC Documents, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which may reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially
and adversely affect the assets, properties or operations thereof, taken as a
whole, or the consummation of the transactions contemplated in the Transaction
Documents or the performance by the Company of its obligations thereunder.
(ix) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws. Based solely on
inquiries we have made of the Company's Executive Vice President/Chief
Financial Officer, Senior Vice President/General Counsel/Secretary, Vice
President/Treasurer and Vice President/Controller, no default by the Company
or any subsidiary exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument, except for defaults which would not have a Material Adverse
Effect.
(x) The authorized capital stock of the Company consists of
50,000,000 shares of Common Stock, par value $0.001 per share, of which
______________ shares are issued and outstanding.
