Exhibit 10.1
THIS NOTE AND THE SECURITIES INTO WHICH
THIS NOTE IS CONVERTIBLE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR IN ANY
OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES
LAWS UNLESS OFFERED, SOLD OR TRANSFERRED
PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
CONVERTIBLE PROMISSORY NOTE AGREEMENT
Date: December 9, 2005
$250,000.00
FOR
VALUE RECEIVED, WAVERIDER COMMUNICATIONS INC., a
corporation organized under the laws of the
State of Nevada (hereinafter called
the "Borrower" or the "Corporation"),
hereby promises to pay to the order of
WAVE WIRELESS CORPORATION or its registered
assigns (the "Holder"), the sum of
TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00) on June 7, 2006 (the "Scheduled
Maturity Date"), and to pay interest on the
unpaid principal balance hereof at a
rate of eight percent (8%) per annum
(except as otherwise provided herein).
Interest shall accrue on the unpaid
principal balance hereof commencing on the
date hereof (the "Issue Date"), until the
same is paid, whether at maturity, or
upon prepayment, repayment, or otherwise.
Interest shall be calculated based on
a 365 day year and the principal amount
hereof, together with all accrued and
unpaid interest thereon, shall be due and
payable on the Scheduled Maturity
Date. All payments of principal and
interest (to the extent not converted in
accordance with the terms hereof) shall be
made in, and all references herein to
monetary denominations shall refer to,
lawful money of the United States of
America. All payments shall be made at such
address as the Holder shall have
given or shall hereafter give to the
Borrower by written notice made in
accordance with the provisions of this
Note.
The term "Note" and all references thereto, as used throughout
this instrument, shall mean this instrument
as originally executed, or if later
amended or supplemented, then as so amended
or supplemented.
ARTICLE I
CERTAIN DEFINITIONS
The following terms shall have the following meanings:
A. "Common Stock" means the Common Stock,
par value $0.0001 per share, of the
Corporation.
B. "Conversion Amount" means the
outstanding principal amount of this Note,
together with all accrued and unpaid
interest thereon, on the Conversion Date.
C. "Conversion Date" means the date on
which this Note is converted into
Conversion Securities.
D. "Conversion Securities" means shares of
Common Stock.
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E. "Conversion Price" means $0.11815.
F. "Strategic Transaction" means the
proposed merger between a wholly owned
subsidiary of the Holder and the
Borrower.
ARTICLE II
MECHANISM FOR NOTE EXCHANGE INTO STRATEGIC TRANSACTION
A. Strategic Transaction Purchase Price
Credit. In the event the Strategic
Transaction is consummated, the Note shall
be cancelled and the number of shares
of Holder common stock to be issued to the
stockholders of Borrower in the
Strategic Transaction shall be reduced by
that number of shares determined by
dividing the principal value of the Note by
the Transaction Conversion Price,
which shall equal eighty-five (85%) percent
of the per share purchase price for
the Corporation's common stock implied by
the final exchange ratio in the
Strategic Transaction.
ARTICLE III
CONVERSION
A. Optional Conversion. This Note may be
convertible at any time by Holder, at
its sole election, into shares of the
Corporation's common stock at the
Conversion Price.
B. Mechanics of Conversion.
(i) On the
Conversion Date, the Holder shall surrender or cause to be
surrendered this Note, duly endorsed to the
Corporation or the Corporation's
transfer agent.
(ii) The
Corporation shall pay any and all taxes that may be imposed
upon
it with respect to the issuance and
delivery of the Conversion Securities upon
the conversion of this Note.
(iii) If the
number of Conversion Securities issuable upon conversion of
this Note would result in fractional
shares, in lieu of the fractional shares,
the Corporation shall make a cash payment
based upon the Conversion Price then
in effect.
ARTICLE IV
RESERVATION OF SHARES
A. Reserved Amount. The Corporation shall
reserve 2,500,000 authorized and
unissued shares of Common Stock for
issuance upon conversion of this Note
pursuant to Article III.A hereof, and
thereafter the number of authorized but
unissued shares of Common Stock so reserved
shall not be decreased and shall at
all times be sufficient to provide for the
conversion of this Note pursuant to
Article III.A hereof at the then current
Conversion Price (the number of shares
of Common Stock so reserved pursuant to
this Article IV.A being referred to
herein as the "Reserved Amount").
ARTICLE V
MISCELLANEOUS
A. Failure or Indulgency Not Waiver. No
failure or delay on the part of the
Holder in the exercise of any power, right
or privilege hereunder shall operate
as a waiver thereof, nor shall any single
or partial exercise of any such power,
right or privilege preclude other or
further exercise thereof or of any other
right, power or privilege.
<PAGE>
B. Notices. Any notices required or
permitted to be given under the terms of
this Note shall be sent by certified or
registered mail (return receipt
requested) or delivered personally or by
courier or by confirmed telecopy, and
shall be effective five days after being
placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered
personally or by courier or
confirmed telecopy, in each case addressed
to a party. The addresses for such
communications shall be:
If to the Corporation:
WaveRider Communications, Inc.
255 Consumers Road
Suite 500
Toronto, Ontario
Canada M2J 1R4
Telephone: 1 416 502 3200
Facsimile: 1 416 502
2968
Attention: Chief
Executive Officer
If to the Holder:
Wave Wireless Corporation
1996 Lundy Ave.
San Jose, CA 95131
Telephone: (408) 943-4200
Facsimile: (408) 943-4305
Attention: Dan Rumsey
Each party shall provide notice to the other parties of any change
in
address or the address of any transferee of
the Note.
C. Amendment Provision. This Note and any
provision hereof may be amended only
by an instrument in writing signed by the
Corporation and the Holder.
D. Assignability. This Note shall be
binding upon the Corporation and its
successors and assigns and shall inure to
the benefit of the Holder and its
successors and assigns. Notwithstanding
anything to the contrary contained in
this Note, this Note may be pledged and all
rights of the Holder under this Note
may be assigned to any affiliate or to any
other person or entity without the
consent of the Corporation.
E. Governing Law; Jurisdiction. This Note
shall be governed by and construed in
accordance with the laws of the State of
Nevada applicable to contracts made and
to be performed in the State of Nevada. The
Corporation irrevocably consents to
the jurisdiction of the United States
federal courts and the state courts
located in the State of Nevada in any suit
or proceeding based on or arising
under this Note and irrevocably agrees that
all claims in respect of such suit
or proceeding may be determined in such
courts. The Corporation irrevocably
waives the defense of an inconvenient forum
to the maintenance of such suit or
proceeding. The Corporation further agrees
that service of process upon the
Corporation
