Warrant Agreement - Worldwide Wireless Systems Inc. and Continental Stock & Trust Co.
WARRANT AGREEMENT
This Warrant Agreement (the "Agreement") is by and among WORLDWIDE
WIRELESS SYSTEMS, INC., a Delaware corporation (the "Company") and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, a New York corporation, as Warrant Agent (the
"Warrant Agent").
Background
1. In connection with a public offering of its securities (the
"Offering") through a firm commitment underwriting with Dupont Securities
Group, Inc. (the "Underwriter") pursuant to a Registration Statement filed
on Form SB-2 with the Securities and Exchange Commission under the Securities
Act of 1933 on __________, 1997 (the "Offering"), the Company proposes to
issue 1,500,000 redeemable common stock purchase warrants (the "Warrants").
2. The Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof.
N O W , T H E R E F O R E ,
In consideration of the premises and the mutual covenants and
agreements herein set forth, and in reliance on the representations and
warranties contained herein, the parties hereby agree as follows:
Section 1. Definitions. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Average Closing Bid Price", means the average closing bid
price of the Company's Common Stock reported by NASDAQ for
the 10 trading days immediately preceding the respective
closing of the Offering.
(b) "Common Stock" shall mean the authorized stock of the Company
of any class, whether now or hereafter authorized, which has
the right to participate in the distribution of earnings and
assets of the Company without limit as to amount or
percentage, which at the date hereof consists of 20,000,000
shares of Common Stock, $.01 par value per share.
(c) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its
principal business shall be administered, which office is
located on the date hereof at 2 Broadway, 19thFloor, New
York, New York 10004.
(d) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both: (i) the
Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder
thereof or his attorney duly authorized in writing; and (i)
payment in cash, or by official bank or certified check made
payable to the Warrant Agent, of an amount in lawful money
of the United States of America equal to the applicable
Purchase Price.
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(e) "Purchase Price" shall mean the price to be paid upon exercise
of each Warrant in accordance with the terms hereof, which
price shall be $_____ per share, subject to adjustment from
time to time pursuant to the provisions of Section 9 hereof,
and subject to the Company's right to reduce the Purchase
Price; upon notice to all Warrant Holders.
(f) "Redemption Price" shall mean the price at which the Company
may, at its option, redeem the Warrants, in accordance with
the terms hereof, which price shall be $.10 per Warrant,
subject to adjustment from time to time pursuant to the
provisions of Section 9.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the
books maintained by the Warrant Agent pursuant to Section 6.
(h) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company, as the Company's transfer agent, or its authorized
successor, as such.
(i) "Warrant Expiration Date" shall mean, with respect to each
Warrant, 3:00 p.m. (New York, New York time) on the fifth
anniversary of the date of issuance of the Warrants, or the
Redemption Date as defined in Section 8, whichever is
earlier; provided that if such date shall in the State of
New York be a holiday or a day on which banks are authorized
to close, then 3:00 p.m. (New York, New York time) on the
next following day which in the State of New York is not a
holiday nor a day on which banks are authorized to close.
Upon notice to all Warrant Holders, the Company shall have
the right to extend the Warrant Expiration Date.
Section 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Holder
of the Warrant Certificate representing such Warrant to
purchase one (1) share of Common Stock upon the exercise
thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9.
(b) Upon execution of this Agreement, Warrant Certificates
representing the number of Warrants sold pursuant to the
Registration Statement shall be executed by the Company and
delivered to the Warrant Agent. Upon written order of the
Company signed by its President or Chairman or a Vice
President and by its Secretary or an Assistant Secretary,
the Warrant Certificates shall be countersigned, issued and
delivered by the Warrant Agent.
(c) From time to time, up to the Warrant Expiration Date, the
Transfer Agent shall countersign and deliver stock
certificates in required whole number denominations
representing the amount of shares of Common Stocks sold in
the Offering, subject to adjustment as described herein,
upon the exercise of Warrants in accordance with this
Agreement.
(d) From time to time, up to the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant
Certificates in required whole number denominations to the
persons
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entitled thereto in connection with any transfer or exchange
permitted under this Agreement; provided that no Warrant
Certificates shall be issued except to: (i) those initially
issued hereunder; (ii) those issued on or after the Initial
Warrant Exercise Date, upon the exercise of fewer than all
Warrants represented by any Warrant Certificate, to evidence
any unexercised Warrants held by the exercising Registered
Holder; (iii) those issued upon any transfer or exchange
pursuant to Section 6; (iv) those issued in replacement of
lost, stolen, destroyed or mutilated Warrant Certificates
pursuant to Section 7; (v) those issued pursuant to the
Placement Agents' Warrants; and (vi) at the option of the
Company, in such form as may be approved by its Board of
Directors, to reflect any adjustment or change in the
Purchase Price, the number of shares of Common Stock
purchasable upon exercise of the Warrants or the Redemption
Price therefor made pursuant to Section 9.
Section 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates for the Warrants shall be
substantially in the form annexed hereto as Exhibit A and
may have such letters, numbers or other marks of
identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement or as may be required
to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform
to usage. The Warrant Certificates shall be dated the date
of issuance thereof (whether upon initial issuance,
transfer, exchange or in lieu of mutilated, lost, stolen, or
destroyed Warrant Certificates) and issued in registered
form. Warrants shall be numbered serially with the letter W
on the Warrants.
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice
President and by its Secretary or an Assistant Secretary, by
mutual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the
Company's seal. Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid
for any purpose unless so countersigned. Incase any officer
of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company
before the date of issuance of the Warrant Certificates or
before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates may nevertheless
be countersigned by the Warrant Agent, issued and delivered
with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such
officer of the Company. After countersignature by the
Warrant Agent, Warrant Certificates shall be delivered by
the Warrant Agent to the registered Holder without further
action by the Company, except as otherwise provided by
Section 4(a).
Section 4. Exercise.
(a) Each Warrant may be exercised by the Registered Holder thereof
at any time on or after the Initial Warrant Exercise Date,
but not after the Warrant Expiration Date, upon the terms
and subject to the conditions set forth herein and in the
applicable Warrant Certificate. The Company shall not be
obligated to deliver any securities pursuant to the
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exercise of this Warrant unless a registration statement
under the Securities Act of 1933, with respect to such
securities is effective. The Company has covenanted and
agreed that it will use all reasonable efforts to keep the
Registration Statement current while any of the Warrants are
outstanding. This Warrant shall not be exercisable by a
Registered Holder in any state where such exercise would be
unlawful. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise
Date and the person entitled to receive the securities
deliverable upon such exercise shall be treated for all
purposes as the holder upon exercise thereof as of the close
of business on the Exercise Date. As soon as practicable on
or after the Exercise Date, the Warrant Agent shall deposit
the proceeds received from the exercise of a Warrant and
shall notify the Company in writing of the exercise of the
Warrants. Promptly following, and in any event within five
(5) days after the date of such notice from the Warrant
Agent, the Warrant Agent, on behalf of the Company, shall
cause to be issued and delivered to the person or persons
entitled to receive the same, a certificate or certificates
for the securities deliverable upon such exercise (plus a
Warrant Certificate for any remaining unexercised Warrants
of the Registered Holder) unless prior to the date of
issuance of such certificates the Company shall instruct the
Warrant Agent to refrain from causing such issuance of
certificates pending clearance of checks received in payment
of the Purchase Price pursuant to such Warrants. The Warrant
Agent shall notify the Underwriter of any exercise of this
Warrant within ten (10) days after the date of such
exercise.
Section 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely
for the purpose of issuance upon exercise of Warrants, such
number of shares of Common Stock as shall then be issuable
upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall, at the time of
delivery, be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof (other than those which
the Company shall promptly pay or discharge) and that upon
issuance such shares shall be listed on each national
securities exchange, if any, on which the other shares of
outstanding Common Stock of the Company are then listed.
(b) The Company covenants that if any securities to be reserved
for the purpose of exercise of Warrants hereunder require
registration with, or approval of, any governmental
authority under any federal securities law before such
securities may be validly issued or delivered upon such
exercise, then the Company will in good faith and as
expeditiously as reasonably possible, endeavor to secure
such registration or approval. The Company will use all
reasonable efforts to obtain appropriate approvals or
registrations under state "blue sky"securities laws with
respect to any such securities. However, Warrants may not be
exercised by, or shares of Common Stock issued to, any
Registered Holder in any state in which such exercise would
be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with
respect to the issuance of Warrants, or the issuance or
delivery of any shares upon exercise of the Warrants;
provided, however, that if the shares of Common Stock are to
be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant
being exercised, then no such
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delivery shall be made unless the person requiring the same
has paid to the Warrant Agent the amount of transfer taxes
or charges incident thereto, if any.
Section 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of
Warrants of the same class or may be transferred in whole or
in part. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office,
and upon satisfaction of all the terms and provisions
hereof, the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor
the Warrant Certificate or Certificates which the Registered
Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in which,
subject to such reasonable regulations as it may prescribe,
it shall register Warrant Certificates and the transfer
thereof in accordance with its regular practice. Upon due
presentment for registration of transfer of any Warrant
Certificate at such office, the Company shall execute and
the Warrant Agent shall issue and deliver to the transferee
or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants of the
same class.
(c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the
subscription form on the reverse thereof shall be duly
endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form
satisfactory to the Company and the Warrant Agent, duly
executed by the Registered Holder or his attorney-in-fact
duly authorized in writing.
(d) A service charge may be imposed by the Warrant Agent for any
exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment
by such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be
promptly canceled by the Warrant Agent and thereafter
retained by the Warrant Agent until termination of this
Agreement or resignation as Warrant Agent.
(f) Prior to due presentment for registration of transfer thereof,
the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute
owner thereof and of each Warrant represented thereby
(notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer
of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
Section 7. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the
case of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall (in the
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absence of notice to the Company and/or Warrant Agent that the Warrant
Certificate has been acquired by a bonafide purchaser) countersign and deliver
to the Registered Holder in lieu thereof a new Warrant Certificate of like
tenor representing an equal aggregate number of Warrants. Applicants for a
substitute Warrant Certificate shall comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.
Section 8. Redemption.
(a) At any time after the first anniversary of the date hereof,
on not less than thirty (30) days' prior written notice, the
Warrants may be redeemed, at a price of $.10 per Warrant,
provided the average closing bid price of the Company's
Common Stock on the Nasdaq Stock Market (or the last sale
price, if quoted on a national securities exchange) for
twenty (20) consecutive trading days ending on the fifteenth
day prior to the date of the notice of redemption equals or
exceeds $9.00 per share (subject to adjustment by the
Company in accordance with Section 9 hereof). The notice of
redemption will be sent to the registered address of the
registered holder of the Warrant. All Warrants must be
redeemed if any are redeemed.
(b) In case the Company shall desire to exercise its right to so
redeem the Warrants, it shall request the Warrant Agent to
mail a notice of redemption to each of the Registered
Holders of the Warrants to be redeemed, first class, postage
prepaid, not later than the thirtieth (30th) day before the
date fixed for redemption, at their last address as shall
appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the
Registered Holder receives such notice.
(c) The notice of redemption shall specify: (i) the Redemption
Price; (ii) the date fixed for redemption; (iii) the place
where the Warrant Certificates shall be delivered and the
redemption price paid; and (iv) that the right to exercise
the Warrant shall terminate at 3:00 p.m. (New York, New York
time) on the business day immediately preceding the date
fixed for redemption. No failure to mail such notice nor any
defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to
a holder (i) to whom notice was not mailed; or (ii) whose
notice was defective. An affidavit of the Warrant Agent or
of the Secretary or the Company that notice of redemption
has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant that has been called for
redemption shall terminate at 3:00 p.m. (New York, New York
time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Holders
of the redeemed Warrants shall have no further rights except
to receive, upon surrender of the redeemed Warrant, the
Redemption Price.
(e) From and after the date specified for redemption, the Company
shall, at the place specified in the notice of redemption,
upon presentation and surrender to the Company by or on
behalf of the Registered Holder thereof of one or more
Warrants to be redeemed, deliver or cause to be delivered to
or upon the written order of such Holder a sum in cash equal
to the Redemption Price of each such Warrant. From and after
the date fixed for redemption and upon the depositor setting
aside by the Company of a sum sufficient to
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redeem all the Warrants called for redemption, such Warrants
shall expire and become void and all rights hereunder and
under the Warrant Certificates, except the right to receive
payment of the Redemption Price, shall cease.
(f) In case the Company shall desire to exercise its right to so
redeem the Warrants before the Warrants are exercisable, the
Warrants shall become immediately exercisable upon receipt
of written notice of the Company's intent to redeem.
Section 9. Adjustment of Purchase Price and Number of Shares of Common
Stock or Warrants.
(a) Subject to the exceptions referred to in Section 9 (g), in the
event the Company shall, at any time or from time to time
after the date hereof, subdivide or combine the outstanding
shares of Common Stock into a greater or lesser number of
shares (any such subdivision or combination being herein
called a "Change of Shares") , then, and thereafter upon
each further Change of Shares, the applicable Purchase Price
in effect immediately prior to such Change of Shares shall
be changed to a price (including any applicable fraction of
a cent) determined by multiplying the Purchase Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such Change of
Shares and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately
after such Change of Shares. Upon each adjustment of the
applicable Purchase Price pursuant to this Section 9, the
total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions
contained in Section9(b)) be such number of shares
(calculated to the nearest tenth) purchasable at the
applicable Purchase Price immediately prior to such
adjustment multiplied by a fraction, the numerator of which
shall be the applicable Purchase Price in effect immediately
prior to such adjustment and the denominator of which shall
be the applicable Purchase Price in effect immediately after
such adjustment.
(b) In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock, or in
case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation
and which does not result in any reclassification, capital
reorganization or other change of outstanding shares of
Common Stock), or incase of any sale or conveyance to
another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall
cause effective provision to be made so that each holder of
a Warrant then outstanding shall have the right thereafter,
by exercising such Warrant, to purchase the kind and number
of shares of stock or other securities or property
(including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation,
merger, sale or conveyance by a holder of the number of
shares ofCommon Stock that might have been purchased upon
exercise of such Warrant, immediately prior to such
reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. Any such
provision shall include provision for adjustments that shall
be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 9. The foregoing
provisions, shall similarly apply to
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successive reclassifications, capital reorganizations and
other changes of outstanding shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(c) Irrespective of any adjustments or changes in the Purchase
Price or the number of shares of Common Stock purchasable
upon exercise of the Warrants, the Warrant Certificates
theretofore and thereafter issued shall, unless the Company
shall exercise its option to issue new Warrant Certificates
pursuant to Section 2 (e), continue to express the
applicable Purchase Price per share, the number of shares
purchasable thereunder as the Purchase Price per share, and
the number of shares purchasable thereunder as were
expressed in the Warrant Certificates when the same were
originally issued.
(d) After each adjustment of the Purchase Price pursuant to this
Section 9, the Company will promptly prepare a certificate
signed by the Chairman or President, and by the Treasurer or
an Assistant Treasurer or the Secretary or an Assistant
Secretary, of the Company setting forth: (i) the applicable
Purchase Price as so adjusted; (ii) the number of shares of
Common Stock purchasable upon exercise of each Warrant after
such adjustment, and the number of Warrants to which the
registered holder of each Warrant shall then be entitled;
and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate
with the Warrant Agent and cause a brief summary thereof to
be sent by ordinary first class mail to the Placement Agents
and to each registered holder of Warrants at his last
address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity
thereof except as to the holder to whom the Company failed
to mail such notice, or except as to the holder whose notice
was defective. The affidavit of an officer of the Warrant
Agent or the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts
stated therein.
(e) For purposes of Section 9(a) and 9(b) hereof, the following
provisions (i) and (ii) shall also be applicable:
(i) The number of shares of Common Stock outstanding at
any given time shall include shares of Common Stock
owned or held by or for the account of the Company
and the sale or issuance of such treasury shares or
the distribution of any such treasury shares shall
not be considered a Change of Shares for purposes
of said Sections.
(ii) No Adjustment of the Purchase Price shall be made
unless such adjustment would require an increase or
decrease of at least five cents ($.05) in such
price; provided that any adjustments which by
reason of this clause (ii) are not required to be
made shall be carried forward and shall be made at
the time of and together with the next subsequent
adjustment which, together with any adjustments so
carried forward, shall require an increase or
decrease of at least $0.05 in the Purchase Price
then in effect hereunder.
(f) No Adjustment of Purchase Price in Certain Cases.
Notwithstanding any provision to the contrary contained
herein, no adjustment of the Purchase Price shall be made:
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(i) Upon the issuance or sale of: (i) the Underwriters'
Warrants or the securities underlying the
Underwriters' Warrants; (ii) the shares issuable
pursuant to the options, warrants, rights, stock
purchase agreements or convertible or exchangeable
securities outstanding or in effect on the date
hereof as described in the Prospectus; (iii) any
shares of Common Stock to be issued upon exercise
of options granted by the Company under stock
option plans subsequently adopted by the Company;
(iv) securities issued in connection with the
acquisition of, or merger with, any entity by the
Company; and (v) any Shares issued in connection
with the Offering.
(ii) If the amount of said adjustments shall aggregate
less than five cents ($.05) for one (1) share of
Common Stock; provided, however, that in such case
any adjustment that would otherwise be required
then to be made shall be carried forward and shall
be made at the time of and together with the next
subsequent adjustment which, together with any
adjustment so carried forward, shall aggregate at
least five cents ($.05) for one (1) share of Common
Stock.
(g) As used in this Section 9, the term "Common Stock" shall mean
and include the Company's Common Stock authorized on the
date of the Offering of the Units and shall also include any
capital stock of any class of the Company thereafter
authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof
to participate in dividends and in the distribution of
assets upon the voluntary liquidation, dissolution or
winding up of the Company; provided, however, that the
shares issuable upon exercise of the Warrants shall include
only shares of such class designated in the Company's
Certificate of Incorporation as Common Stock on the date of
the Offering or: (i) in the case of any reclassification,
change, consolidation, merger, sale or conveyance of the
character referred to in Section 9(c) hereof, the stock,
securities or property provided for in such Section; or (ii)
in the case of any reclassification or change in the
outstanding shares of Common Stock issuable upon exercise of
the Warrants as a result of a subdivision or combination or
consisting of a change in par value, or from par value to no
par value, or from no par value to par value, such shares of
Common Stock as so reclassified or changed.
(h) Any determination as to whether an adjustment in the Purchase
Price in effect hereunder is required pursuant to Section 9,
or as to the amount of any such adjustment, if required,
shall be binding upon the holders of the Warrants and the
Company if made in good faith by the Board of Directors of
the Company.
Section 10. Fractional Warrants and Fractional Shares.
(a) If the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 9
hereof, the Company shall nevertheless not be required to
issue fractions of shares, upon exercise of the Warrants or
otherwise, or to distribute certificates that evidence
fractional shares. With respect to any fraction of a share
called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional
share, determined as follows:
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(i) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading
on the Nasdaq National Market, the current value
shall be the last reported sale price of the Common
Stock on such exchange on the last business day
prior to the date of exercise of the Warrant, or if
no such sale is made on such day, the average of
the closing bid and asked prices for such day on
such exchange; or
(ii) If the Common Stock is not listed or admitted to
unlisted trading privileges, the current value
shall be the mean of the last reported bid and
asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the
date of the exercise of the Warrant; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked
prices are not so reported, the current value shall
be an amount determined in such reasonable manner
as may be prescribed by the Board of Directors of
the Company.
Section 11. Warrant Holders Not Deemed Stockholders. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon
exercise of such Warrants for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the holder of Warrants, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance or reclassification of stock,
change of par value or change of stock to no par value, consolidation, merger
o conveyance or otherwise), or to receive notice of meetings, or to receive
dividends or subscription rights, until such Holder shall have exercised such
Warrants and been issued shares of Common Stock in accordance with the
provisions hereof.
Section 12. Rights of Action. All rights of action with respect to
this Agreement are vested in the respective Registered Holders of the
Warrants, and any Registered Holder of a Warrant, without consent of the
Warrant Agent or of the holder of any other Warrant, may, in his own behalf
and for his own benefit, enforce against the Company his right to exercise his
Warrants for the purchase of shares of Common Stock in the manner provided in
the Warrant Certificates and this Agreement.
Section 13. Agreement of Warrant Holders. Every holder of a Warrant,
by his acceptance thereof, consents and agrees with the Company, the Warrant
Agent and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of
the Warrant Agent by the Registered Holder thereof in person
or by his attorney duly authorized in writing and only if
the Warrant Certificates representing such Warrants are
surrendered at the office of the Warrant Agent, duly
endorsed or accompanied by a proper instrument of transfer
satisfactory to the Warrant Agent and the Company in their
sole discretion, together with payment of any applicable
transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered
as the holder and as the absolute, true and lawful owner of
the Warrants represented thereby for all purposes, and
neither the Company nor the
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<PAGE>
Warrant Agent shall be affected by any notice or knowledge
to the contrary, except as otherwise expressly provided in
Section 7 hereof.
Section 14. Cancellation of Warrant Certificates. If the Company
shall purchase or acquire any Warrant or Warrants, the Warrant Certificate or
Warrant Certificates evidencing the same shall thereupon be delivered to the
Warrant Agent and canceled by it and retired. The Warrant Agent shall also
cancel Common Stock following exercise of any or all of the Warrants
represented thereby or delivered to it for transfer, split-up, combination or
exchange.
Section 15. Concerning the Warrant Agent. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent
shall not, by issuing and delivering Warrant Certificates or by any other act
hereunder be deemed to make any representations as to the validity, value or
authorization of the Warrant Certificates or the Warrants represented thereby
or of any securities or other property delivered upon exercise of any Warrant
or whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Purchase Price or the Redemption Price provided in
this Agreement, or to determine whether any fact exists which may require any
such adjustments, or with respect to the nature or extent of any such
adjustment, when made, or with respect to the method employed in making the
same. It shall not: (i) be liable for any recital or statement of facts
contained herein or for any action taken, suffered or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties; (ii) be responsible for any failure on the part of
the Company to comply with any of its covenants and obligations contained in
this Agreement or in any Warrant Certificate; or (iii) be liable for any act
or omission in connection with this Agreement except for its own negligence or
willful misconduct. The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel. Any
notice, statement, instruction, request, direction, order or demand of the
Company shall be sufficiently evidenced by an instrument signed by the
Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary, (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable expenses
hereunder; it further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's negligence
or willful misconduct.
In the event of a dispute under this Agreement between the Company
and the Underwriter regarding proceeds received by the Warrant Agent from the
exercise of the Warrants, the Warrant Agent shall have the right, but not the
obligation, to bring an interpleader action to resolve such dispute.
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<PAGE>
The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), after
giving 30 days' prior written notice to the Company. At least 15 days prior to
the date such resignation is to become effective, the Warrant Agent shall
cause a copy of such notice of resignation to be mailed to the Registered
Holder of each Warrant Certificate at the Company's expense. Upon such
resignation, or any inability of the Warrant Agent to act as such hereunder,
the Company shall appoint a new warrant agent in writing. If the Company shall
fail to make such appointment within a period of 15 days after it has been
notified in writing of such resignation by the resigning Warrant Agent, then
the Registered Holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Any new
warrant agent, whether appointed by the Company or by such a court shall be a
bank or trust company having a capital and surplus as shown by its last
published report to its stockholders, of not less than Ten Million Dollars
($10,000,000.00), or a stock transfer company. After acceptance in writing of
such appointment by the new warrant agent is received by the Company, such new
warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant
Agent, without any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged or any corporation resulting from any consolidation
to which the Warrant Agent or any new warrant agent shall be a party or any
corporation succeeding to the trust business of the Warrant Agent shall be a
successor warrant agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as successor to the Warrant
Agent under the provisions of the preceding paragraph. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent
to be mailed to the Company and to the Registered Holder of each Warrant
Certificate. The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effects as though it were not
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
Section 16. Modification of Agreement. The Warrant Agent and the
Company may by supplemental agreement make any changes or corrections in this
Agreement: (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; or (ii) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant
Certificates; provided, however, that this Agreement shall not otherwise be
modified, supplemented or altered in any respect except with the consent in
writing of the Registered Holders of Warrant Certificates representing not
less than 50% of the Warrants then outstanding; and provided, further, that no
change in the number or nature of the securities purchasable upon the exercise
of any Warrant, or the Purchase Price therefor, or the acceleration of the
Warrant Expiration Date, shall be made without the consent in writing of the
Registered Holder of the Warrant Certificate representing such Warrant, other
than such changes as are specifically prescribed by this Agreement as
originally executed.
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<PAGE>
Section 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail,
postage prepaid as follows: if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at P.O. Box 470, Ascutney,
VT 05030, Attention: President, with a copy to Gravel and Shea, 76 St. Paul
Street, Burlington, Vermont 05401, attention Peter S. Erly, Esq., or at such
other address as may have been furnished to the Warrant Agent in writing by
the Company; if to the Warrant Agent, at Continental Stock Transfer & Trust
Company, 2 Broadway, 19th Floor, New York, New York 10004.
Section 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
Section 19. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent and their respective
successors and assigns, and the holders from time to time of the Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any other person any right, remedy or claim, in equity or at law,
or to impose upon any other person any duty, liability or obligation.
Section 20. Termination. This Agreement shall terminate at the close
of business on the Expiration Date of all the Warrants of such earlier date
upon which all warrants have been exercised, except that the Warrant Agent
shall account to the Company for cash held by it and the provisions of Section
15hereof shall survive such termination.
Section 21. Counterparts. This Agreement may be executed in several
counterparts which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the _____ day of ______________, 1997.
WORLDWIDE WIRELESS SYSTEMS, INC.
By:___________________________________
Duly Authorized Agent
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:___________________________________
Duly Authorized Agent
Countersigned:
Dated:________________________ CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
SEAL By:___________________________________
Duly Authorized Agent
- 13 -
<PAGE>
Exhibit "A"
FORM OF FACE OF WARRANT CERTIFICATE
No. _____ _______ (______) Warrants
VOID AFTER January 31, 2000
CLASS A REDEEMABLE COMMON STOCK WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK OF
WORLDWIDE WIRELESS SYSTEMS, INC.
This certifies that FOR VALUE RECEIVED or registered assigns
(the"Registered Holder") is the owner of the number of Redeemable Common Stock
purchase Warrants (the "Warrants") specified above. Each Warrant entitles the
Registered Holder to purchase, subject to the terms and conditions set forth
in this Certificate and the Warrant Agreement (as hereinafter defined), one
fully paid and nonassessable share of Common Stock, $.01 par value, of
Worldwide Wireless Systems, Inc., a Delaware corporation (the "Company"), at
any time between one year from __________ and the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse hereof duly executed, at
the corporate office of Continental Stock Transfer & Trust Company as Warrant
Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$_____ per share (the "Purchase Price") in lawful money of the United States
of America in cash or by official bank or certified check made payable to the
Warrant Agent.
This Warrant Certificate and each Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement (the "Warrant Agreement"), dated as of
__________, 1997, by and among the Company and the Warrant Agent.
In the event of certain events provided for in the Warrant Agreement,
the Purchase Price and the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 3:00 p.m. (New York, New York
time) on __________, 2002, or such earlier date as the Warrants shall be
redeemed. If such date shall in the State of New York be a holiday or a day on
which the banks are authorized to close, then the Expiration Date shall be
3:00 p.m. (New York, New York time) the next day which in the State of New
York is not a holiday nor a day in which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, with respect to such securities is effective. The
Company has covenanted and agreed that it will file a registration statement
and will use all reasonable efforts to cause the same to become effective and
to keep such registration statement current
<PAGE>
while any of the Warrants are outstanding. This Warrant shall not be
exercisable by a Registered Holder in any state where such exercise would be
unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof
by the Registered Holder at the corporate office of the Warrant Agent, for a
new warrant Certificate or Warrant Certificates of like tenor representing an
equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment together with any
tax or other governmental charge imposed in connection therewith, for
registration or transfer of this Warrant Certificate at such office, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
This Warrant may be redeemed at the option of the Company, at a
Redemption Price of $.10 per Warrant, provided that (a) the closing price of
the Company's Common Stock on the Nasdaq Small Cap Market as reported by the
National Quotation Bureau, Incorporated (or the last sale price, if quoted on
a national securities exchange) equals or exceeds $9.00 for at least 20
consecutive trading days ending on the fifteenth (15th) business day prior to
the date of the notice of redemption. Notice of redemption shall be given not
later than the thirtieth (30th) day before the date fixed for redemption, all
as provided in the Warrant Agreement. On and after the date fixed for
redemption, the Registered Holder shall have no rights with respect to this
Warrant except to receive the $.10 per Warrant upon surrender of this
Certificate.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed, manually or in facsimile by two (2) of its officers
thereunto duly authorized and a facsimile of its corporate seal to be
imprinted hereon.
Dated: _______________________ WORLDWIDE WIRELESS SYSTEMS, INC.
SEAL By:___________________________________
President
By:___________________________________
Secretary
<PAGE>
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
(_____) Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
------------------
------------------
------------------
------------------
please print or type name and address
and be delivered to
------------------
------------------
------------------
------------------
please print or type name and address
and if such number of Warrants shall not be all the Warrants evidenced by This
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated:________________________ ______________________________________
Signature
----------------------
Street Address
----------------------
City, State and Zip Code
----------------------
Taxpayer ID Number
----------------------
Signature Guaranteed
<PAGE>
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
------------------
------------------
------------------
------------------
please print or type name and address
_____ (_____) of the Warrants represented by this __________Warrant
Certificate, and hereby irrevocably constitutes and appoints ____________
Attorney to transfer This Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Dated:________________________ ______________________________________
Signature Guaranteed
THE SIGNATURE MUST BE GUARANTEED BY A MEDALLION BANK