TELECOM WIRELESS CORPORATION
0000 XXX XXXXXXXXX, 00XX XX.
XXXXXXXXX, XX 00000
September 23,1999
Commtel Services Ltd
C/o Teacher Xxxxx Xxxxx
00-00 Xxxxxxx Xxx
Xxxxxx XX0X0XX
("Xxxxxx Lender")
Re: BRIDGE LOAN TO TELECOM WIRELESS CORPORATION
Dear Bridge Lender.
This letter agreement will confirm our understanding and agreement with
respect to the proposed bridge loan (the "Bridge Loan") in the principal
amount of $__________ to be made by you and certain others (the "Lenders", or
individually, the "Lender") to the undersigned Telecom Wireless Corporation.
a Utah Corporation (the "Borrower"), and is entered into in order to induce
you to make the Bridge Loan and in consideration therefor, as follows,
1. The Bridge Loan made by you will be evidenced by promissory
notes of the Company, dated the date of the making of the Bridge Loan (the
"Notes") payable to each Lender, in the aggregate principal amount of
$___________, bearing interest at ten (10%) percent per annum, with principal
and interest due and payable in full on the earlier of (a) ___________, 1999
and (b) the date of the receipt by the Company of financing aggregating at
least $2,000,000 (the "Maturity Date").
2. The Bridge Loan will be disbursed in immediately available funds
by wire transfer to the following account:
Bank One
0000 Xxxxx Xxxxxxx Xxx., Xxx. 000
Xxxx Xxxxx, XX 00000
ABA #: 000000000
For the Account of: Telecom Wireless Corporation
Account #: 10065599387
Bank #250
3. In consideration for the the loan the Company shall issue to the
Bridge Lender an aggregate of warrants to purchase _________ shares of the
Company's common stock at a price of $7.00 per share for a period terminating
on the later of (a) four years from issuance and (b) the date on which a
registration statement relating to the shares underlying the warrants has
been in effect for two years (the "Initial Warrants"). If the loan has not
been repaid in full (inclusive of accrued interest) on or before
_____________, 1999, the Company shall issue to the Bridge Lender additional
warrants to purchase ____________ shares on the same terms and conditions as
the Initial Warrants. The exercise price of all such warrants shall be
subject to adjustment on the same basis as the repricing warrants issued in
conjunction with the Company's Rule 506 offering. The Company agrees to
provide piggyback registration rights for the shares underlying the warrants
and the warrants shall contain reasonable and standard cashless exercise
provisions.
4. In the event that the Company has not paid to the Lender all
principal and interest due and owing on or prior to the Maturity Date, the
Borrower shall be in default of the Note and:
a. The interest rate on all principal and accrued interest
shall become 18%;
b. The Borrower shall be immediately obligated to maintain
with the SEC an effective registration statement pursuant to the
Securities Exchange Act of 1933 which would provide for the resale
of (i) the stock underlying the. warrants and (ii) any common
stock of the Borrower into which the Lender has the option to
convert the Note.
c. 1) The Borrower shall, at its option, have the right to
convert the Note (principal and accrued interest) into
common stock of the Borrower at a price which is equal to
50% of the five day average closing bid price of the
Borrower's common stock for that period immediately prior
to the Lender's notice of conversion. Such conversion
option shall commence upon the Borrower's default under the
Note and shall terminate on the following the effectiveness
of the registration statement referred to in subsection
4.b. above for a period of two years.
2) If following a default and the vesting of the
Lender conversion option the Borrower desires to cure such
default by making payment on its financial obligations
under the Note, the Borrower must provide the Lender with
written notice at least 30 days prior to such payment of
its desire to make such Payment. The Lender may, upon the
receipt of
such notice, by written notice received during such 30
day period, refuse the Borrower's offer to redeem the
note and thus retain the conversion rights which accrued
to the Note upon such default. This conversion option,
and any other rights of the Lender upon default, do not
limit or compromise the Bridge Lender's other remedies,
including those set forth in the other provisions of this
Agreement or the Note and at law.
3) The conversion of the Note shall be deemed to
have been made immediately prior to the close of business
on the date (each, an "EXERCISE DATE") of the surrender to
the Company for exercise of the Note. Such conversion,
evidenced in writing, shall be executed by the Bridge
Lender or his attorney duly authorized in writing and shall
be delivered to the Company at its corporate offices
located at 0000 XXX Xxxxxxxxx, 00xx Xx., Xxxxxxxxx, XX
00000 (the "CORPORATE OFFICE"), or at any such other office
or agency as the Company may designate.
4) The person entitled to receive the number of
shares deliverable on conversion shall be treated for all
purposes as the holder of such shares as of the close of
business on the Exercise Date. The Company shall not be
obligated to issue any fractional share interest in shares
issuable or deliverable an such conversion and such
fractional shares shall be of no value whatsoever.
5) Within ten days after the conversion date,
the Company, at its own expense, shall cause to be issued
and delivered to the person or persons entitled to receive
the same, a certificate or certificates in the name
requested by the Bridge Lender for the number of shares
deliverable on such conversion. No adjustment shall be
made in respect of cash dividends on shares delivered on
such conversion. All shares of Common Stock delivered upon
such conversion shall be validly issued, fully paid and
non-assessable.
5. The Lenders shall have no obligation to make the Bridge Loan
unless and until the following conditions precedent have been satisfied in
the sole judgment of the Lenders:
a.. The Notes and the warrants shall have been executed and
delivered and all other legal matters related to the Bridge Loan
have been satisfied;
b. All legal matters relating to the Bridge Loan shall be
reasonably satisfactory to counsel for the Lenders.
6. The Company represents to the Lenders that this letter agreement
(the "Agreement"), the Notes and the Warrant Agreements and Warrant
Certificates have been duly executed by it, have been duly authorized by all
necessary corporate action on the part of the Company, constitute the valid
and legally binding obligation of the Company, enforceable in accordance with
their terms except as such enforceability may be limited by laws of
bankruptcy, fraudulent conveyance, creditors rights or principles of equity,
and are not inconsistent with the terms of the Company's certificate of
incorporation or bylaws, and that the execution, delivery and performance of
the Agreement, the Notes and the Warrants do not and will not breach or
result in a default under any agreement to which the Company is a party.
7. The Lender shall have the Opportunity to convert its Note into
the private equity placement being conducted on behalf of the Company by
First Equity Capital Securities, Inc.
This Agreement shall be governed by and construed in accordance with
the law of the State of New York. may not be amended, modified or waived
except in writing, signed by both parties hereto, shall be binding upon the
Company and inure to benefit of the Lenders and its respective successors,
assigns, heirs and legal representatives.
Very truly yours,
TELECOM WIRELESS CORPORATION, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
EVP, CFO
Agreed and Accepted
By:
-----------------------------------
NOTE
$250,000.00 September 23, 1999
For value received, the undersigned, TELECOM WIRELESS, INC., a Utah
corporation having an address at 0000 XXX Xxxxxxxxx, 00xx Xx., Xxxxxxxxx,
Xxxxxxxx 00000 (the "Borrower"), hereby promises to pay to the order of
Commtel Services Ltd, c/o Teacher Xxxxx Xxxxx, 00-00 Xxxxxxx Xxx, Xxxxxx
XX0X0XX (xxx "Payee"), the principal sum of Two Hundred and Fifty Thousand
Dollars ($250,000.00), on the earlier of (i) November 23, 1999 and (ii) the
date on which the Borrower receives, in aggregate, financing in an amount of
gross proceeds of at least $2,000,000, together with all accrued interest
through and including the date of payment. Interest shall be payable at a
rate per annum (computed for actual days elapsed on the basis of a 365-day
year) of ten percent (10.0%). The Borrower may prepay this Note at any time
prior to the due date hereof, in full, without premium or penalty.
All indebtedness outstanding under this Note after maturity shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) at the rate of eighteen (18.0%) percent per annum, and all such
interest shall be payable on demand.
Payments of both principal and interest on this Note are to be made at
the office of the Payee at Commtel Services Ltd, c/o Teacher Xxxxx Xxxxx,
00-00 Xxxxxxx Xxx, Xxxxxx XX0X0XX, or such other place as the holder hereof
shall designate to the Borrower in writing, in lawful money of the United
States of America in immediately available funds.
The Borrower shall pay reasonable costs and expenses of collection,
including, without limitation, reasonable attorneys' fees and disbursements
in the event that any action, suit or proceeding is brought by the holder
hereof to collect this Note and either the holder obtains a judgment in its
favor that is not appealed from or is upheld on appeal, or such action, suit
or proceeding is settled with any sum due and owing to the holder as a result
of such settlement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES
PERTAINING TO CONFLICT OF LAWS.
THE BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT, UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS NOTE MAY
BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, OR IN
THE UNITED STATES DISTRICT COURT FOR THE STATE OF NEW YORK. THE BORROWER, BY
THE EXECUTION AND DELIVERY OF THIS NOTE, EXPRESSLY AND IRREVOCABLY ASSENTS
AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH COURT IN ANY SUCH
ACTION OR PROCEEDING. BY ITS ACCEPTANCE OF THIS NOTE BY THE HOLDER AND BY THE
EXECUTION HEREOF BY THE BORROWER, EACH AGREES THAT ANY AND ALL LEGAL ACTION
RELATING TO THIS NOTE SHALL BE BROUGHT, AND MAINTAINED, ONLY IN SUCH COURTS.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT,
SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY
DELIVERY THEREOF TO IT AT THE ADDRESS SET FORTH ABOVE OR SUCH OTHER ADDRESS
AS THE BORROWER SHALL HAVE THERETOFORE NOTIFIED THE HOLDER HEREOF IN WRITING
OR IN ANY OTHER MANNER PERMITTED BY LAW. IN THE EVENT SERVICE ON THE BORROWER
IS EFFECTED AS SET FORTH IN THE PRECEDING SENTENCE, THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR
PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE, FORUM NON CONVENIENS, OR ANY SIMILAR BASIS. THE BORROWER SHALL NOT BE
ENTITLED IN ANY ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED
UNDER THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS SUCH
DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK.
TELECOM WIRELESS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
EVP CFO
Schedule to Bridge Loan Agreement
Identifying Other Bridge Loan Agreements
to Which Telecom Wireless Is a Party
That Are Substantially Identical And
Material Details in Which Such Agreements
Differ from Filed Agreement
Date Requiring
Issuance of
Additional
No. of Warrants if
Amount of Initial Loan Not Paid
Date Holder Loan Due Date Warrants in Full by
-------- ---------------------------- --------- -------- -------- ---------------
09/01/99 Commtel Services Ltd. $125,000 10/31/99 12,500 10/01/99
09/01/99 Xxxxxxx X. Xxxxxx $75,000 10/31/99 7,500 10/01/99
09/01/99 Xxxxxxx X. Xxxxxx $50,000 10/31/99 5,000 10/01/99
09/23/99 Commtel Services Ltd. $250,000 11/23/99 25,000 10/23/99
09/23/99 A.I. International Corporate
Holdings Ltd. $175,000 11/23/99 17,500 10/23/99
09/23/99 Xxxxxxxx X. Xxxxxx $75,000 11/23/99 7,500 10/23/99
09/23/99 Kiam Interests Ltd. $250,000 11/23/99 25,000 10/23/99
