SURRENDER AND EXCHANGE AGREEMENT
This Surrender and Exchange Agreement is entered into as of January 21,
2005, by and between Usurf America, Inc., a Nevada corporation (the "Company")
and Evergreen Venture Partners, LLC ("Purchaser").
WITNESSETH:
WHEREAS, Company and Purchaser entered into that certain Stock Purchase
Agreement dated as of February 27, 2004 (the "Purchase Agreement") pursuant to
which Company issued and sold to Purchaser and Purchaser purchased 10,000,000
shares (the "SPA Shares") of common stock of the Company, $0.001 par value per
shares (the "Common Stock") and warrants to purchase up to 12,500,000 shares of
Common Stock (the "SPA Warrants");
WHEREAS, Company and Purchaser entered into that certain Convertible
Loan and Collateral Agreement dated as of December 23, 2003 (the "Loan
Agreement") pursuant to which the Company issued and the Purchaser obtained that
certain Note (as defined therein) together with warrants to purchase up to
10,000,000 shares of Common Stock (the "LA Warrants");
WHEREAS, on or about April 23, 2004, Purchaser and Company terminated
the Note and in CONSIDERATION therefore, Company issued to Purchaser 5,000,000
shares of Common Stock and an additional warrant to purchase up to 14,000,000
shares of Common Stock (the "Adjustment Warrants");
WHEREAS, effective as of August 19, 2004, Company issued in favor of
Purchaser 17,000,000 shares of Common Stock pursuant to certain price adjustment
and protection provisions of the Loan Agreement and the Loan Documents (as
defined in the Loan Agreement) including the Note (the "Adjustment Shares");
WHEREAS, on September 19, 2003, Purchaser and Company entered into that
certain Letter Agreement pursuant to which Company issued and Purchaser obtained
a warrant to purchase up to 3,816,667 shares of Common Stock (the "Prior
Warrant");
WHEREAS, in December, 2004, Purchaser surrendered warrants to purchase
25,000,000 shares of Common Stock represented by the 5,000,000 ($0.18 exercise
price) Common Stock Purchase Warrant and the 5,000,000 ($0.26 exercise price)
Common Stock Purchase Warrant under the Loan Agreement, the 12,500,000 Common
Stock Purchase Warrant under the SPA and 2,500,000 Common Stock Purchase
Warrants of the 3,816,667 Prior Warrants that were terminated and canceled by
the Company;
WHEREAS, Purchaser currently holds collectively 32,000,000 shares of
Common Stock inclusive of the SPA Shares and the Adjustment Shares, and warrants
to purchase up to 15,316,667 shares of Common Stock inclusive of the 14,000,000
Adjustment Warrants and 1,316,667 of the Prior Warrants;
WHEREAS, Company wishes to reduce its issued and outstanding shares of
Common Stock and reduce its outstanding securities convertible into or
exchangeable for shares of Common Stock;
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WHEREAS, Purchaser has agreed in exchange for a promissory note in the
principal amount of $750,000 as described herein to surrender to the Company
certain of the shares of Common Stock it now owns and warrants it now holds, and
to terminate fully and completely each and every Loan Document and the Purchase
Agreement; and
WHEREAS, Company wishes to issue the promissory note in exchange for the
surrender of the Common Stock and Warrants by the Purchaser, and in exchange for
the full and final termination of the Loan Agreement, the Loan Documents and the
Purchase Agreement.
THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Company and Purchaser (each a "party" and together the
"parties") hereby agree as follows:
I. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below, including the exhibit hereto or amendments hereof.
(a) "Agreement" shall mean this Surrender and Exchange Agreement and all
exhibits hereto or amendments hereof.
(b) "Securities Act" shall mean the Securities Act of 1933, as amended,
and includes the rules and regulations of the Securities and Exchange Commission
("SEC") promulgated thereunder, as such shall then be in effect.
Any term used herein to which a special meaning has been ascribed shall
be construed in accordance with either (1) the context in which such term is
used, or (2) the definition provided for such terms in the place in this
Agreement at which such term is first used. Any capitalized term used herein but
not defined herein shall have the meaning ascribed to such terms in the
referenced agreement or document.
II. DISCLOSURES
Purchaser hereby acknowledges that it has examined, or has had the
opportunity to examine, all of Company's periodic filings made with the SEC
pursuant to the Securities Exchange Act of 1934. Further, Purchaser hereby
acknowledges that it has had the opportunity to ask questions of, and receive
answers from, the officers of Company regarding the periodic filings of Company
and otherwise investigate the matters contained therein.
III. SURRENDER AND EXCHANGE; TERMINATION
(a) Purchaser hereby surrenders to Company 17,000,000 shares of the
Common Stock now owned by Purchaser, represented by stock certificates number
1648 (the "Surrendered Shares"). Company accepts such Surrendered Shares and
such Surrendered Shares shall be immediately deemed canceled. Company shall
instruct its transfer agent to issue to Purchaser any breakdown certificates for
shares in excess of the Surrendered Shares evidenced by the certificates
tendered by Purchaser. Such breakdown certificates shall be marked with the same
legend(s) as the original surrendered certificates.
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(b) Purchaser hereby surrenders to Company the 14,000,000 Adjustment
Warrants and 1,316,667 Prior Warrants representing all of the outstanding SPA
Warrants, LA Warrants and the Prior Warrants. Company accepts such Surrendered
Warrants and such Surrendered Warrants shall be immediately deemed canceled.
(c) Purchaser hereby terminates, waives and abandons and any all rights
or privileges arising under and inuring to Purchaser under the Loan Agreement
and each and every Loan Document and under the Purchase Agreement, and releases
and discharges Company form its obligations and duties under such agreements
(the "Terminated Agreements") save and except for Company's obligations under
Article V of the Purchase Agreement with respect to the registration of the SPA
Shares under the Company's next Registration Statement (as defined therein).
(d) In consideration of the actions and agreements set forth in
paragraphs (a), (b) and (c) of this Article III, Company hereby issues to
Purchaser, and Purchaser hereby accepts, the promissory note in the form of that
attached hereto as Exhibit A (the "Exchange Note")
(e) The Exchange Note is issued to Purchaser subject to all of the
terms and conditions set forth herein.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Company represents and warrants to Purchaser:
(a) Organization and Corporate Authority. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and is qualified to do business as a foreign corporation in all
jurisdictions where the ownership of property or maintenance of an office would
require qualification. Company has all requisite corporate power and authority,
governmental permits, consents, authorizations, registrations, licenses and
memberships necessary to own its property and to carry on its business in the
places where such properties are now owned and operated or such business is
being conducted.
(b) Authorization. All corporate action on the part of Company and its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement, for the performance of Company's obligations
hereunder and for the issuance and delivery of the Exchange Note has been taken.
This Agreement, when executed and delivered, shall constitute a legal, valid and
binding obligation of Company.
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Company:
(a) Purchaser has the authority to enter into, and perform under, this
Agreement.
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(b) Purchaser represents and warrants that it is an "accredited
investor" within the meaning of that term as used in Rule 501 of Regulation D of
the Rules and Regulations of the SEC of the Securities Act and is capable,
through experience and financial strength, to make and understand an investment
decision leading to the purchase of the exchange of the Surrendered Stock and
the Surrendered Warrants and the issuance of the Exchange Note therefore as
contemplated herein.
VI. MISCELLANEOUS
(a) Arbitration. In the event of a dispute between the parties that
arises out of this Agreement, the parties agree to submit such dispute to
arbitration before the American Arbitration Association (the "Association") in
Colorado Springs, Colorado, in accordance with the then-current rules of the
Association; the award rendered by the arbitrator(s) shall be binding and a
judgment may be obtained on any such award in any court of competent
jurisdiction. It is expressly agreed that the arbitrator(s), as part of any
award, may award attorneys fees to the prevailing party.
(b) Governing Law. This Agreement shall be deemed to be a contract made
under, governed by and construed in accordance with the substantive laws of the
State of Colorado.
(c) Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute but one and the
same documents.
(d) Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, assigns heirs and
administrators of the parties hereto.
(e) Entire Agreement. This Surrender and Exchange Agreement, along with
any other document delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
hereof.
ACCORDINGLY, the parties have signed this Surrender and Exchange
Agreement as of the day and year first above written.
USURF AMERICA, INC. EVERGREEN VENTURE PARTNERS, LLC
By: Xxxxxxx X. XxXxxxxx By:/s/ Xxxx Xxxxxxx
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Xxxxxxx X. XxXxxxxx Name: Xxxx Xxxxxxx
President and CEO Title: Manager
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EXHIBIT A
FORM OF NOTE
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