-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DdVG44rajv17uHFT7WO5/T/Dk7zwaL3mJArESrL9xIhN3PN+/8iyr2SfppSn7kOL AZjq+u0Kae1clpEPYoRYog== 0001021408-02-006934.txt : 20020514 0001021408-02-006934.hdr.sgml : 20020514 ACCESSION NUMBER: 0001021408-02-006934 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPEEDCOM WIRELESS CORP CENTRAL INDEX KEY: 0001014343 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 582044990 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21061 FILM NUMBER: 02646834 BUSINESS ADDRESS: STREET 1: 7020 PROFESSIONAL PARKWAY STREET 2: EAST CITY: SARASOTA STATE: FL ZIP: 34240 BUSINESS PHONE: 941-907-2300 MAIL ADDRESS: STREET 1: 7020 PROFESSIONAL PARKWAY STREET 2: EAST CITY: SARASOTA STATE: FL ZIP: 34240 FORMER COMPANY: FORMER CONFORMED NAME: LTI HOLDINGS INC DATE OF NAME CHANGE: 19990813 FORMER COMPANY: FORMER CONFORMED NAME: LAMINATING TECHNOLOGIES INC DATE OF NAME CHANGE: 19960621 10QSB 1 d10qsb.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDING MARCH 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ____________ COMMISSION FILE NUMBER 0-21061 SPEEDCOM WIRELESS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 58-2044990 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 7020 PROFESSIONAL PARKWAY EAST SARASOTA, FL 34240 (941) 907-2300 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) Yes[x] No[ ], and (2) has been subject to such filing requirements for the past 90 days Yes[x] No [ ]. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the last practicable date: April 30, 2002 - 10,601,332 common shares, $.001 par value. Transitional small business disclosure format (check one): Yes [ ] No [x] SPEEDCOM WIRELESS CORPORATION FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 2002 INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets as of March 31, 2002 and December 31, 2001 3 Statements of Operations for the three months ended March 31, 2002 and 2001 4 Statements of Cash Flows for the three months ended March 31, 2002 and 2001 5 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. OTHER INFORMATION Item 2. Recent Sales of Unregistered Securities 20 Item 4. Submission of Matters to a Vote of Security Holders 21 Item 6. Exhibits and Reports on Form 8-K 22 Signatures 22 Exhibit Index 23 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements SPEEDCOM WIRELESS CORPORATION BALANCE SHEETS
March 31, December 31, 2002 2001 --------------------------------- Assets (unaudited) Current assets: Cash $ 185,837 $ 273,614 Restricted cash 2,651 42,724 Accounts receivable, net of allowances of $150,939 and $213,278 in 2002 and 2001, respectively 924,868 1,883,533 Current portion of leases receivable 639,966 778,030 Inventories, net 1,505,650 1,825,234 Prepaid expenses and other current assets 124,047 146,593 --------------------------------- Total current assets 3,383,019 4,949,728 Property and equipment, net 931,939 1,034,558 Leases receivable 70,367 811,103 Note receivable - related party 271,045 267,126 Other assets, net 109,168 122,104 Intellectual property, net 1,303,734 1,372,937 --------------------------------- Total assets $ 6,069,272 $ 8,557,556 ================================= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 1,789,397 $ 2,455,803 Advance from factor 40,861 298,676 Accrued expenses 982,942 1,056,140 Current portion of loans from stockholders 84,363 76,000 Current portion of deferred revenue 39,132 74,911 Current portion of notes and capital leases payable 52,379 33,174 --------------------------------- Total current liabilities 2,989,074 3,994,704 Deferred revenue, net of current portion 9,893 13,517 Notes and capital leases payable, net of current portion 31,781 39,254 Stockholders' equity: Common stock, $.001 par value, 30,000,000 shares authorized, 10,601,332 and 10,122,113 shares issued and outstanding in 2002 and 2001, respectively 10,601 10,122 Preferred stock, $4.50 stock liquidation value per share, 10,000,000 shares authorized, 3,835,554 and 3,835,554 shares issued and outstanding in 2002 and 2001, respectively 5,455,702 5,455,702 Additional paid-in capital 17,770,561 17,710,477 Accumulated deficit (20,198,340) (18,666,220) --------------------------------- Total stockholders' equity 3,038,524 4,510,081 --------------------------------- Total liabilities and stockholders' equity $ 6,069,272 $ 8,557,556 =================================
See accompanying notes. 3 SPEEDCOM WIRELESS CORPORATION STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended March 31, 2002 2001 -------------------------------- Net revenues $ 1,917,505 $ 4,017,275 Cost of goods and services 1,049,532 2,234,491 -------------------------------- Gross margin 867,973 1,782,784 Operating costs and expenses: Salaries and related 934,752 1,315,406 General and administrative 686,422 850,982 Selling expenses 253,008 518,722 Provision for bad debt 321,401 1,674 Depreciation and amortization 175,923 107,200 -------------------------------- 2,371,506 2,793,984 -------------------------------- Loss from operations (1,503,533) (1,011,200) Other expense, net: Interest expense, net (26,091) (160,766) Other (expense) income, net (2,496) 2,413 -------------------------------- (28,587) (158,353) -------------------------------- Net loss $ (1,532,120) $ (1,169,553) ================================ Net loss per share: Basic and diluted $ (0.15) $ (0.13) ================================ Shares used in computing basic and diluted net loss per share 10,447,815 9,313,863 ================================
See accompanying notes. 4 SPEEDCOM WIRELESS CORPORATION STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31, 2002 2001 ------------------------ Operating activities Net loss $ (1,532,120) $ (1,169,553) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 175,923 107,200 Provision for bad debt 321,401 1,674 Provision for inventory obsolescence 12,909 -- Common stock issued for services 67,509 10,000 Amortization of original issue discount on debt -- 93,390 Changes in operating assets and liabilities: Restricted cash 40,073 -- Accounts receivable 1,037,639 (766,088) Leases receivable 478,425 (47,510) Inventories 306,675 495,458 Prepaid expenses and other current assets 22,546 97,540 Intellectual property -- (210,000) Other assets 12,936 (124,905) Accounts payable and accrued expenses (686,306) (62,791) Deferred revenue (39,403) 13,533 ----------------------------- Net cash provided by (used in) operating activities 218,207 (1,562,052) Investing activities Purchases of equipment (4,101) (194,314) ----------------------------- Net cash used in investing activities (4,101) (194,314) Financing activities Net payments to factor (257,815) -- Proceeds from loans from and warrants issued to stockholders -- 1,770,000 Payments of loans from stockholders (36,000) -- Payments of notes and capital leases (8,268) (142,020) Proceeds from sale of common stock and warrants 200 94,432 ----------------------------- Net cash (used in) provided by financing activities (301,883) 1,722,412 ----------------------------- Net decrease in cash (87,777) (33,954) Cash at beginning of period 273,614 227,066 ----------------------------- Cash at end of period $ 185,837 $ 193,112 =============================
See accompanying notes. 5 SPEEDCOM WIRELESS CORPORATION STATEMENTS OF CASH FLOWS (CONTINUED) (unaudited)
Three Months Ended March 31, 2002 2001 ------------------------ Supplemental disclosure of noncash investing and financing activities Conversion of accounts receivable to lease receivable -- $ 1,333,000 Conversion of accounts payable to notes payable $ 20,000 $ 558,442 Conversion of accounts payable to loans from stockholders $ 44,363 -- Common stock to be issued for software license -- $ 650,000 Common stock issued for services $ 67,509 -- Conversion of debt to equity -- $ 40,000
See accompanying notes. 6 SPEEDCOM WIRELESS CORPORATION NOTES TO FINANCIAL STATEMENTS MARCH 31, 2002 (unaudited) 1. Business SPEEDCOM Wireless Corporation (SPEEDCOM) was incorporated in Florida on March 16, 1994 and reincorporated in Delaware on September 26, 2000. SPEEDCOM manufactures and installs custom broadband wireless networking equipment for business and residential customers internationally. Through its Wave Wireless Networking division, SPEEDCOM manufactures a variety of broadband wireless products, including the SPEEDLAN family of wireless Ethernet bridges and routers. Internet service providers, telephone company operators and private organizations in over 60 countries use SPEEDCOM products to provide "last-mile" wireless connectivity between multiple buildings at speeds up to 155 Megabits per second and distances up to 25 miles. SPEEDCOM Wireless Corporation is an ISO 9001 registered company. 2 Basis of Presentation The accompanying financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. The accompanying financial statements should be read in conjunction with SPEEDCOM's annual financial statements and notes thereto included in SPEEDCOM's Form 10-KSB. In the opinion of management, the financial statements reflect all adjustments (consisting of only normal and recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for those periods presented. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. 3. Liquidity and Management's Plans Projected cash flows from SPEEDCOM's current operations are not sufficient to finance SPEEDCOM's current and projected working capital requirements. SPEEDCOM will have to obtain additional capital to execute its business plan for 2002. In April 2002, SPEEDCOM borrowed $750,000 from three institutional investors, which was used for current operations. In May 2002, SPEEDCOM borrowed an additional $250,000 from three institutional investors, which was used for current operations. SPEEDCOM will seek additional capital to fund the growth of its business, develop next generation products and to take advantage of opportunities that may arise. This additional capital could come from the sale of common or preferred stock, or from additional borrowings. There can be no assurance that such financing will be available on acceptable terms, if at all. If SPEEDCOM is unable to secure significant additional financing, SPEEDCOM will have to further downsize its business or explore other alternatives. The 7 financial statements do not include any adjustments that might arise as a result of this uncertainty. 4. Inventories A summary of inventories at March 31, 2002 and December 31, 2001 is as follows: 2002 2001 (unaudited) ---------------------------- Component parts $ 764,247 $ 596,985 Completed assemblies 615,043 1,081,568 Completed assemblies consigned to others 126,360 146,681 ---------------------------- $ 1,505,650 $1,825,234 ============================ 5. Intellectual Property A summary of intellectual property at March 31, 2002 and December 31, 2001 is as follows: 2002 2001 (unaudited) ---------------------------- Intellectual property $ 1,599,500 $1,599,500 Less accumulated amortization (295,766) (226,563) ---------------------------- $ 1,303,734 $1,372,937 ============================ In January 2001, SPEEDCOM acquired worldwide rights for six years to PacketHop(TM), a wireless routing software developed by SRI International (SRI). Under the terms of the agreement, SPEEDCOM obtains rights to SRI's PacketHop(TM) technology in the fixed wireless infrastructure market for the primary frequencies below 6 GHz. Per the agreement, SRI International received a total of 325,000 shares of common stock of SPEEDCOM that was issued in four traunches. Each traunch was measured on the specific date that the stock was issued on. As of March 31, 2002, the value of these shares at the date of grant is classified in Intellectual property on the balance sheet. SPEEDCOM also has paid $360,000 in cash, included in Intellectual property on the balance sheet, which is being amortized over six years. Per the terms of the agreement, SRI may terminate the exclusive period (18 months) by providing written notice of such termination unless by such time SPEEDCOM has successfully closed a liquid event where SRI had the opportunity to obtain net proceeds of at least $5,000,000. Due to the fact that such an event has not occurred, it is expected that SPEEDCOM will lose its exclusive rights to PacketHop(TM) in July 2002, but will retain its perpetual license agreement. SPEEDCOM has evaluated this long-lived asset for impairment by comparing the discounted expected future cash flows to its carrying amount. The undiscounted expected future cash flows are more than the carrying value of the asset, so an impairment loss has not been recognized. 6. Accrued Expenses A summary of accrued expenses at March 31, 2002 and December 31, 2001 is as follows: 8 2002 2001 (unaudited) ---------------------------- Accrued payroll $ 190,599 $ 170,419 Accrued commissions 130,762 71,179 Severance costs 217,499 256,826 Registration statement late filing fee 163,970 163,970 Other 280,112 393,746 ---------------------------- $ 982,942 $ 1,056,140 ============================ 7. Related Party Transactions Note Receivable-Related Party During 2001, SPEEDCOM sold its InstallGuys division to SPEEDCOM's Chief Executive Officer. In return, SPEEDCOM received two 6% secured promissory notes totaling $211,295. In October, SPEEDCOM loaned InstallGuys an additional $50,000 at 6% interest. The notes and interest are due in August 2004. Loans from Stockholders SPEEDCOM issued an 18% $50,000 promissory note to SPEEDCOM's Vice President of Sales in December 2001. The note is due May 15, 2002 and is secured by property of SPEEDCOM. During February 2002, $10,000 of this loan was repaid. During April 2002, $20,000 of this loan was repaid. SPEEDCOM also issued an 18% $106,000 promissory note to an investor in December 2001 that was due December 28, 2001. SPEEDCOM paid $80,000 of this note in December 2001. In January 2002, SPEEDCOM paid the remaining $26,000 balance on the note and accrued interest. In March 2002, SPEEDCOM issued three promissory notes to each of SPEEDCOM's outside Board members for $14,738, $13,875 and $15,750, respectively. Each note bears an interest rate of 14% and carries an additional 2% penalty on outstanding principle not paid by April 15, 2002. $11,000 of these notes was paid in April 2002. The remaining principle of the notes, interest and penalties has not been repaid. 8. Notes and Capital Leases Payable A summary of notes and capital leases payable at March 31, 2002 and December 31, 2001 is as follows: 9
2002 2001 (unaudited) ----------------------------- 8% automobile loan payable in monthly installments through January 2003, secured by equipment $ 3,918 $ 5,057 12% convertible note 20,000 -- Capital lease obligations 60,242 67,371 ----------------------------- 84,160 72,428 Less current portion (52,379) (33,174) ----------------------------- $ 31,781 $ 39,254 =============================
In January 2002, SPEEDCOM entered into a financial relations and consultant contract whereby the consultant will receive each month a $10,000 convertible note with a 12% coupon rate. The notes are convertible at any time at $1.125 per share. As of March 31, 2002, the note holders possess rights to convert the notes to 22,500 shares of restricted common stock. This contract was cancelled in May 2002. 9. Stockholders' Equity Common Stock In January 2002, 459,219 shares were issued as a result of a repricing provision that applied to 83,000 shares of common stock issued on October 30, 2000 for a price of $7.35 per share, or a total of $610,050. Additional shares were issued based on a reset price, which is the weighted average closing price of SPEEDCOM common stock for the first ten trading days of January 2002; provided that the reset price is not less than $1.1251 or more than $1.19. Because the average price of SPEEDCOM's common stock during the first ten trading days of 2002 was below the $1.1251 reset floor, the total number of shares, as adjusted after repricing, was determined by dividing $610,050 by such floor. Also in January 2002, 20,000 options were exercised at $0.01 per share for 20,000 shares of common stock. Employee Stock-Based Compensation In February 2002, SPEEDCOM issued stock options to employees for the purchase of 750,100 common shares at $0.60 per share. The Company recorded $67,500 in stock-based compensation expense in relation to these options during the three months ended March 31, 2002. These options vest upon the achievement during 2002 of certain revenue milestones or in full in one year from the issuance. The revenue milestone had not been met as of March 31, 2002. These options vest upon a change of control transaction with the ability to exercise the options for up to one year after vesting. Upon a change of control and if the one year performance period has not expired, the employee may surrender the performance options for cash payment at the calculated change of control common share transaction value for payment within 30 days by the surviving company. 10 Preferred Stock Each share of preferred stock issued in August 2001 is convertible at any time into two shares of common stock, subject to anti-dilution protection, and will accrue dividends, beginning August 23, 2003, to be paid upon conversion at the rate of 14% per year times the $3.38 per share liquidation preference. The liquidation preference increased from $2.25 to $3.38 ($4.50 if paid in stock) because a change of control agreement was not announced by February 23, 2002 and closed by April 23, 2002. 10. Customer Concentrations Although SPEEDCOM serves a large and varied group of customers, two customers accounted for 11% and 17% of SPEEDCOM's revenue for the three months ended March 31, 2002, respectively. One customer accounted for 14% of SPEEDCOM's revenue for the three months ended March 31, 2001. In addition, four customers accounted for 51% of SPEEDCOM's gross accounts receivable as of March 31, 2002. SPEEDCOM intends to continue to attempt to diversify and expand its customer base with its current limited resources and maintain overhead costs at low levels. 11. Lease Restructuring During the three months ended March 31, 2002, SPEEDCOM converted two of its leases receivable, recorded at approximately $1,290,000, into a new lease receivable with approximately $336,000 due immediately, five payments of $50,000 due over a five month period and a balloon payment of approximately $328,000 due in August 2002. As a result of this restructuring of the lease, SPEEDCOM recorded a provision for bad debt of approximately $395,000 for the three months ending March 31, 2002. 12. Subsequent Event In April 2002, SPEEDCOM borrowed $750,000 from three institutional investors. In May 2002, SPEEDCOM borrowed an additional $250,000 from three institutional investors. The loans bear an interest rate of 15% and are payable at the earlier of (i) ninety days following the execution of a definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the SPEEDCOM's assets or (ii) July 31, 2002. As a stipulation to these loans, the term of all outstanding Series B Warrants of SPEEDCOM dated August 23, 2001 was extended to July 31, 2002. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The discussion in this document contains trend analysis and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties, such as statements concerning growth and future operating results; developments in markets and strategic 11 focus; new products and services and product technologies and future economic, business and regulatory conditions. Such forward-looking statements are generally accompanied by the words such as "plan", "estimate", "expect", "believe", "should", "would", "could", "anticipate", "may" and other words that convey uncertainty of future events or outcomes. These forward-looking statements and other statements made elsewhere in this report are made in reliance on the Private Securities Litigation Reform Act of 1995. The section below entitled "Certain Factors That May Affect Future Results, Financial Condition and Market Price of Securities" sets forth material factors that could cause actual results to differ materially from these statements. Overview SPEEDCOM is a multi-national company based in Sarasota, Florida. SPEEDCOM employs approximately 70 people. Through its Wave Wireless Networking division, SPEEDCOM manufactures a variety of broadband wireless products, including its SPEEDLAN family of wireless ethernet bridges and routers. Internet service providers, telephone company operators and private organizations in more than 60 countries use SPEEDCOM products to provide "last-mile" wireless connectivity between multiple buildings at speeds up to 155 Megabits per second and distances up to 25 miles. Results of Operations The following table sets forth the percentage of net revenues represented by certain items in SPEEDCOM's Statements of Operations for the periods indicated. Three Months Ended March 31, 2002 2001 ------------------- Net revenues 100% 100% Cost of goods and services 55% 56% ------------------ Gross margin 45% 44% Operating costs and expenses: Salaries and related 49% 32% General and administrative 36% 21% Selling expenses 13% 13% Provision for bad debt 17% 0% Depreciation and amortization 9% 3% ------------------ 124% 69% ------------------ Loss from operations (79)% (25)% Other expense, net: Interest expense, net (1)% (4)% Other (expense) income, net (0)% 0% ------------------ (1)% (4)% ------------------ Net loss (80)% (29)% ================== 12 Three Months Ended March 31, 2002 and March 31, 2001 Net revenues decreased 52% from approximately $4,017,000 in the three months ended March 31, 2001 to approximately $1,918,000 in the three months ended March 31, 2002. This decrease was due to unexpected delays in spending decisions by both potential and current customers during the first quarter. This factor, combined with the challenging economic environment in both the United States and overseas, contributed to disappointing results. SPEEDCOM believes that a unique focus on offering a complete spectrum of fixed wireless products and its strength in key international markets will enable SPEEDCOM to endure these difficult economic times. Cost of goods and services decreased 53% from approximately $2,234,000 for the three months ended March 31, 2001 to approximately $1,050,000 for the three months ended March 31, 2002, due primarily to decreases in SPEEDCOM's revenues. Revenues from customers in foreign geographic areas increased to 64% of revenues for the three months ended March 31, 2002 as compared to 45% of revenues the three months ended March 31, 2001. The percentage of sales that are from international customers is expected to increase slightly during the year ended December 31, 2002. Salaries and related, general and administrative and selling expenses decreased by 30% from approximately $2,685,000 for the three months ended March 31, 2001 to approximately $1,874,000 for the three months ended March 31, 2002. This decrease was primarily due to a decrease in salaries and related expenses of approximately $381,000 related to decreased average headcount, a decrease in general and administrative expenses of approximately $165,000 related to reduced spending on travel, investor relations and consultancy fees, partially offset by increases in rent expense, and a decrease in selling expenses of approximately $266,000 related primarily to reduced trade show participation. During the three months ended March 31, 2002, SPEEDCOM converted two of its leases receivable, recorded at approximately $1,290,000, into a new lease receivable with approximately $336,000 due immediately, five payments of $50,000 due over a five month period and a balloon payment of approximately $328,000 due in August 2002. As a result of this restructuring of the lease, SPEEDCOM recorded a provision for bad debt of approximately $395,000 for the three months ending March 31, 2002. Net interest expense decreased from approximately $161,000 for the three months ended March 31, 2001 to approximately $26,000 for the three months ended March 31, 2002. This decrease was due to the addition of notes payable and loans from stockholders during the fourth quarter of 2000 and the first quarter of 2001 that were converted to preferred stock during 2001. Net loss increased 31% from approximately $1,170,000, or $.13 per share, in the three months ended March 31, 2001 to approximately $1,532,000, or $.15 per share, in the three months ended March 31, 2002, as a result of the foregoing factors. 13 Taxes At March 31, 2002, SPEEDCOM had net operating loss carryforwards (NOLs) for federal income tax purposes of approximately $11,500,000. The NOLs expire at various dates through the year 2021. Utilization of SPEEDCOM's net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitation could result in the expiration of the net operating loss before utilization. Liquidity and Capital Resources During the three months ended March 31, 2002, SPEEDCOM's operating activities provided approximately $218,000 of cash. This was primarily due to decreases in accounts receivable, leases receivable and inventory partially offset by its net loss for the period and decreases in accounts payable and accrued expenses. SPEEDCOM purchased approximately $4,000 of fixed assets during the three months ending March 31, 2002 as compared to approximately $194,000 during the same period in 2001. SPEEDCOM does not have any material commitments for capital expenditures in the future. SPEEDCOM used approximately $302,000 primarily through payments to factored accounts receivable and payments on loans from stockholders. As of March 31, 2002, SPEEDCOM had cash of approximately $186,000. During the three months ended March 31, 2001, SPEEDCOM used approximately $1,562,000 of cash for its operating activities. This was primarily due to increases in accounts receivable (due to increases in sales) and the net loss for the period. SPEEDCOM purchased approximately $194,000 of fixed assets during the three months ending March 31, 2001 as compared to approximately $167,000 during the same period in 2000. To fund this growth in assets and sales, SPEEDCOM raised approximately $1,770,000 through the issuance of loans from and warrants issued to stockholders. In April 2002, SPEEDCOM borrowed $750,000 from three institutional investors, which was used for current operations. In May 2002, SPEEDCOM borrowed an additional $250,000 from three institutional investors, which was used for current operations. The loans bear an interest rate of 15% and are payable at the earlier of (i) ninety days following the execution of a definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of SPEEDCOM's assets or (ii) July 31, 2002. As a stipulation to these loans, the term of all outstanding Series B Warrants of SPEEDCOM dated August 23, 2001 was extended to July 31, 2002. Projected cash flows from SPEEDCOM's current operations are not sufficient to finance SPEEDCOM's current and projected working capital requirements. SPEEDCOM believes that it will have to seek additional capital to execute its business plan for 2002. SPEEDCOM will seek additional capital to fund the growth of its business, develop next generation products and to take advantage of opportunities that may arise. This additional capital could come from the sale of common or preferred stock, or from borrowings. There can be no assurance that such financing will be available on acceptable terms, if at all. If SPEEDCOM is unable to secure significant 14 additional financing, SPEEDCOM will have to further downsize its business or explore other alternatives. The financial statements do not include any adjustments that might arise as a result of this uncertainty. Certain Factors That May Affect Future Results, Financial Condition and Market Price of Securities If we do not raise additional capital, we will not be able to fulfill our business plan or continue as a going concern. In order to take advantage of possible opportunities in 2002 and to execute our business plan for 2002 and 2003, we need to raise additional financial capital. This additional capital could come from the sale of common or preferred stock, the exercise of outstanding warrants, from borrowings, customer deposits, or from a strategic transaction such as a merger. If we are unsuccessful in raising that capital we may not have sufficient funding to purchase necessary goods and services to execute our business plan. SPEEDCOM's 2002 and 2003 business plans include next generation products which will have initial lead times for acquiring inventory that are much longer than current ones and that may require deposits upfront. SPEEDCOM will need to raise additional capital to fund these longer lead times for purchasing inventory in order to execute its 2002 and 2003 business plans. If this capital is not obtained, additional changes in SPEEDCOM's cost structure and capital expenditures could be required, such as employee terminations and delays in the introductions of the next generation of products or SPEEDCOM may be unable to continue as a going concern. We may not be able to compete successfully in the fixed wireless broadband market in view of rapid technological change and the resources required to deal with technological change. The markets for our products and the technologies utilized in the industry in which we operate evolve rapidly and depend on key technologies, including wireless local area networks, wireless packet data, modem and radio technologies. SPEEDCOM is developing a series of next generation products, which incorporates the PacketHop(TM) licensed technology from SRI. Delays in developing these products could have a negative effect on our future competitiveness as the industry is constantly changing as new technologies are developed. The fixed wireless broadband market is at an early stage of development and is rapidly evolving. As is typical for a new and rapidly evolving industry, demand and market acceptance for recently introduced wireless networking products and services are subject to a high level of uncertainty. Market acceptance of particular products cannot be predicted; however, it is likely that new products will not be generally accepted unless they operate at higher speeds and are sold at lower prices. While the number of businesses recognizing the value of wireless solutions is increasing, we do not know whether sufficient demand for our products will emerge and become sustainable. Prospects must be evaluated due to the risks encountered by a company in the early stages of marketing new products or services, particularly in light of the uncertainties relating to the new and evolving markets in which we operate. There can be no assurance that we will succeed in 15 addressing any or all of these risks, and the failure to do so would reduce demand for SPEEDCOM's products. We could encounter future competition from larger wireless, computer and networking equipment companies. We could also encounter additional future competition from companies that offer products that replace or are alternatives to radio frequency wireless solutions. These products include, for example, products based on infra-red technology, products based on laser technology, systems that utilize existing telephone wires or cables within a building as a wired network backbone and satellite systems outside of buildings. Major changes could render products and technologies obsolete or subject to intense competition from alternative products or technologies or by improvements in existing products or technologies. For example, Internet access and wireless local loop equipment markets may stop growing, whether as a result of the development of alternative technologies, such as fiber optic, coaxial cable or satellite systems. Also, new or enhanced products developed by other companies may be technologically incompatible with SPEEDCOM's products and render our products obsolete. Many of SPEEDCOM's current and potential competitors have significantly greater financial, marketing, technical and other resources and, as a result, may be able to respond more quickly to new or emerging technologies or standards and to changes in customer requirements, or to devote greater resources to the development, promotion and sale of products or to deliver competitive products at a lower end user price. Current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to increase the ability of their products to address the needs of SPEEDCOM's existing and prospective customers. Accordingly, it is possible that new competitors or alliances among competitors may emerge and rapidly acquire significant market share. Increased competition could result in price reductions, reduced operating margins and loss of market share by SPEEDCOM. SPEEDCOM's reliance on limited sources of wireless and computer components could result in delayed product shipment and higher costs and could damage customer relationships. Many of the key hardware and software components necessary for the assembly of SPEEDCOM's products are only available from a single supplier or from a limited number of suppliers. Our reliance on sole or limited source suppliers involves several risks, including: . suppliers could increase component prices significantly, without advance notice; . suppliers could discontinue or delay delivery of product components for reasons such as inventory shortages, new product offerings, increased cost of materials, destruction of manufacturing facilities, labor disputes and bankruptcy; and . in order to compensate for potential component shortages or discontinuance, in the future we may hold more inventory than is immediately required, resulting in increased inventory costs. 16 If our suppliers are unable to deliver or ration components to us, we could experience interruptions and delays in manufacturing and sales, which could result in cancellation of orders for products or the need to modify products. This may cause substantial delays in product shipments, increased manufacturing costs and increased product prices. Further, we may not be able to develop alternative sources for these components in a timely way, if at all, and may not be able to modify our products to accommodate alternative components. These factors could damage our relationships with current and prospective customers lasting longer than any underlying shortage or discontinuance. Expanding indirect distribution channels may result in increased costs and lower margins. To increase revenues, we believe that we must increase the number of our distribution partners. Management's strategy includes an effort to reach a greater number of end users through indirect channels. SPEEDCOM is currently investing, and plans to continue to invest, significant resources to develop these indirect channels. These efforts may not generate the revenues necessary to offset such investments. We will be dependent upon the acceptance of our products by distributors and their active marketing and sales efforts relating to our products. The distributors to whom we sell products are independent and are not obligated to deal with SPEEDCOM exclusively. Because SPEEDCOM does not generally fulfill orders by end users of its products sold through distributors, SPEEDCOM will be dependent upon the ability of distributors to accurately forecast demand and maintain appropriate levels of inventory. Management expects that SPEEDCOM's distributors will also sell competing products. These distributors may not continue, or may not give a high priority to, marketing and supporting our products. This and other channel conflicts could result in diminished sales through the indirect channels. Additionally, because lower prices are typically charged on sales made through indirect channels, increased indirect sales could adversely affect the average selling prices and result in lower gross margins. Growth may divert management resources from current operations. SPEEDCOM anticipates that expansion will be required to address potential growth in the customer base and market opportunities. Future expansion is expected to place a significant strain on our management, technical, operational, administrative and financial resources. SPEEDCOM will need to effectively manage any expansion, which could divert attention and resources from current operations. The expansion may be inadequate to support future operations. We may be unable to attract, retain, motivate and manage required personnel, including finance, administrative and operations staff, or to successfully identify, manage and exploit existing and potential market opportunities because of inadequate staffing. We may also be unable to manage growth in our multiple relationships with original equipment manufacturers, distributors and other third parties. 17 Our international operations and sales involve significant risks that could reduce sales and increase expenses. We anticipate that revenues from customers outside North America will continue to account for a significant portion of our total revenues for the foreseeable future. Expansion of international operations has required, and will continue to require, significant management attention and resources. In addition, we remain heavily dependent on distributors to market, sell and support our products internationally. International operations are subject to additional risks, including the following: . difficulties of staffing and managing foreign operations due to time differences, language barriers and staffing constraints in the foreign sales offices; . longer customer payment cycles and greater difficulties in collecting accounts receivable increase the amount of time that we have to fund our purchase of the inventory sold; . unexpected changes in regulatory requirements, exchange rates, trading policies, tariffs and other barriers could increase our costs; . uncertainties of laws and enforcement relating to the protection of intellectual property could allow competitors to infringe on our technology; . limits on the ability to sue and enforce a judgment for accounts receivable increase the risk of bad debt expense; . potential adverse tax consequences could create additional expense; and . political and economic instability in Latin America could limit our sales in that region. SPEEDCOM has a history of losses and may never achieve or sustain profitability. SPEEDCOM has incurred significant losses since its inception, and expects to continue to incur net losses through at least the first half of 2002. SPEEDCOM intends to increase its operating expenses, however revenues may not grow or even continue at their current level. If revenues do not rapidly increase or if expenses increase at a greater pace than revenues, SPEEDCOM will never become profitable. Our common stock price is volatile. Our stock and the NASDAQ stock market in general have experienced significant price and volume fluctuations in recent months and the market prices of technology companies have been highly volatile. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been instituted against that company. Such litigation could result in substantial costs and diversion of management's attention. If our common stock is delisted from the NASDAQ SmallCap Market, it may be more difficult to sell shares of our common stock. Our common stock is currently listed on the NASDAQ SmallCap Market. On April 30, 2002, the closing sale price of our common stock was $0.30 per share. We have been warned that certain standards for continued listing on the NASDAQ SmallCap Market have not been met 18 relating to our share price. NASDAQ has issued a warning letter giving a 180 day grace period to SPEEDCOM to regain compliance. Delisting from the NASDAQ SmallCap Market could result in a less liquid market for our common stock than would otherwise exist. As a result, our shares may be more difficult to sell because potentially smaller quantities of shares could be bought and sold, transactions could be delayed and security analyst and news coverage of our company may be reduced. These factors could result in lower prices and larger spreads in the bid and ask prices for our shares. We are obligated to issue a substantial number of shares of our common stock upon conversion of preferred stock and exercise of warrants that are outstanding. If the preferred stock securityholders elect to convert their preferred stock and exercise their warrants in order to sell the underlying shares of common stock, it will substantially increase the number of SPEEDCOM's shares of common stock outstanding. The exercise or conversion of a substantial number of SPEEDCOM's convertible securities may depress the market price of the common stock and will decrease the relative voting power of existing common stock securityholders. Should a significant number of SPEEDCOM's convertible securities be exercised or converted, the resulting increase in the amount of the common stock in the public market could have a substantial dilutive effect on SPEEDCOM's outstanding common stock. Public resales of our common stock following the exercise or conversion of the securities may depress the prevailing market price of our common stock. Under the anti-dilution provisions of the preferred stock, if SPEEDCOM issues common stock or common stock equivalents at a purchase price, conversion price or warrant or option exercise price that is less than the current preferred stock conversion price of $1.125 per share, the conversion price of the preferred stock will be reduced using a customary weighted average basis formula. Under the anti-dilution provisions of warrants issued in August 2001, (1) the exercise price will be lowered to equal the purchase price, conversion price or warrant or option exercise price for any common stock or common stock equivalents issued (other than to employees) at a purchase price, conversion price or warrant or option exercise price less than the current per share exercise price of the applicable warrants ($2.50 in the case of Series A Warrants and $0.01 in the case of Series B Warrants), and (2) the number of warrants will be increased by the same percentage as the percentage by which the exercise price is reduced. Alternatively, (1) the exercise price will be reduced by the percentage by which the purchase price, conversion price or warrant or option exercise price of any issued security (others than to employees) is less than the current market price of the common stock, and (2) the number of warrants will be increased by the same percentage as the percentage by which the exercise price is reduced, if this formula results in a lower exercise price than the adjustment described in the preceding sentence. Similar anti-dilution provisions apply to warrants to acquire 513,333 shares at an exercise price of $2.50 per share. 19 Our manufacturing capabilities are limited and could prevent us from keeping up with customer demand. SPEEDCOM has no experience in large-scale manufacturing. If our customers were to place orders substantially greater than current levels, SPEEDCOM's present manufacturing abilities may not be adequate to meet such demand. There can be no assurance that we will be able to contract additional manufacturing personnel on a timely basis. Our concentrated ownership structure means that our two controlling shareholders can control the outcome of any shareholder vote. Michael W. McKinney and Barbara McKinney currently control a majority of SPEEDCOM's common stock. Therefore, certain corporate actions, which the Board of Directors may deem advisable for the shareholders of SPEEDCOM as a whole, such as a business combination, may not be approved by the common shareholders if submitted to a vote, unless Michael W. McKinney and Barbara McKinney approve the potential transaction. SPEEDCOM is subject to extensive and unpredictable government regulation, which could make our products obsolete, raise our development costs and create opportunities for other competitors. SPEEDCOM is subject to various FCC rules and regulations in the United States and to other government regulations abroad. There can be no assurance that new FCC regulations will not be promulgated or that existing regulations outside of the United States would not adversely affect international marketing of SPEEDCOM's products. Regulatory changes, including changes in the allocation of available frequency spectrum, could significantly impact operations by restricting development efforts, rendering current products obsolete or increasing the opportunity for additional competition. In September 1993 and in February 1995, the FCC allocated additional spectrum for personal communications services. In January 1997, the FCC authorized 300 MHz of additional unlicensed frequencies in the 5 Gigahertz frequency range. In 2000, the FCC modified the rules for "frequency hopping spread spectrum" radios to allow greater power utilization in certain circumstances. These changes in the allocation of available frequency spectrum could create opportunities for other wireless networking products and services or shift the competitive balance between SPEEDCOM and its competitors. PART II. OTHER INFORMATION Item 2. Recent Sales of Unregistered Securities During the three months ended March 31, 2002 SPEEDCOM sold the following securities, which were not registered under the Securities Act. The purchases and sales were exempt pursuant to Section 4(2) of the Securities Act (and/or Regulation D promulgated thereunder) as transactions by an issuer not involving a public offering, where the purchasers represented their 20 intention to acquire the securities for investment only, not with a view to distribution, and received or had access to adequate information about the registrant. 1. 459,219 shares of common stock (January 30, 2002) were issued as part of a repricing agreement. These securities were issued to 3 accredited investors. In addition, during the three months ended March 31, 2002, a former employee of SPEEDCOM exercised options to purchase 20,000 shares of common stock for $.01 per share. These purchases and sales were exempt pursuant to Rule 701 promulgated under the Securities Act. Item 4. Submission of Matters to a Vote of Security Holders The following proposals are described in the Notice and Proxy Statement filed by SPEEDCOM with the SEC on February 4, 2002: Proposal 1: To approve SPEEDCOM's issuance of common stock upon the conversion of Series B convertible preferred stock and the exercise of related warrants sold to selected institutional and accredited investors in a private offering. Proposal 2: To approve an increase in the number of authorized shares of our common stock from 30 million to 60 million shares, in order, among other things, to provide sufficient authorized shares to cover the conversion of the Series B convertible preferred stock and the exercise of the related warrants.
--------------------------------------------------------------------------------------- For Against Abstained --------------------------------------------------------------------------------------- Proposal 1 6,704,934 66,557 1,353 --------------------------------------------------------------------------------------- Proposal 2 6,685,782 86,779 283 ---------------------------------------------------------------------------------------
The following proposals are described in the Notice and Proxy Statement filed by SPEEDCOM with the SEC on April 19, 2002: Proposal 1: Election of one Director to the Board Proposal 2: Approve the appointment of Ernst & Young LLP as SPEEDCOM's independent certified public accountants for the year ended December 31, 2002 Based upon the results of the voting for Proposal 2 and the recommendation of SPEEDCOM's Board of Directors, Proposal 3 was voted upon at the annual meeting of shareholders held on May 6, 2002: Proposal 3: To approve the appointment of Aidman, Piser & Company as SPEEDCOM's independent certified public accountants for the year ended December 31, 2002 21
--------------------------------------------------------------------------------------- For Against Abstained --------------------------------------------------------------------------------------- Proposal 1 2,845,370 5,585,750 -- --------------------------------------------------------------------------------------- Proposal 2 2,811,405 5,618,515 1,200 --------------------------------------------------------------------------------------- Proposal 3 8,431,120 -- -- ---------------------------------------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The exhibits in the accompanying Exhibit Index are filed as part of this Quarterly Report on Form 10-QSB. (b) Reports on Form 8-K Form 8-K was filed on March 15, 2002 regarding the resignation of two Directors and the appointment of two Directors to SPEEDCOM's Board of Directors. Form 8-K was filed April 25, 2002 regarding the change in SPEEDCOM's certifying accountant. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SPEEDCOM Wireless Corporation /s/ Michael W. McKinney Chairman, Chief Executive May 14, 2002 - ----------------------- Michael W. McKinney Officer and Director 22 Exhibit Index
Number Description 3.1(3) Amended and Restated Certificate of Incorporation of SPEEDCOM Wireless Corporation 3.2(1) Amended and Restated Bylaws of SPEEDCOM Wireless Corporation 4.8(2) Warrant No. W-1 to Purchase 146,667 Shares of Common Stock issued to S.A.C. Capital Associates, LLC 4.9(2) Warrant No. W-2 to Purchase 73,333 Shares of Common Stock issued to SDS Merchant Fund, L.P. 4.10(2) Warrant No. W-3 to Purchase 220,000 Shares of Common Stock issued to Oscar Private Equity Investments, L.P. 4.11(2) Warrant No. W-4 to Purchase 73,333 Shares of Common Stock issued to Bruce Sanguinetti 4.12(3) Purchase Agreement, dated August 23, 2001, by and among SPEEDCOM Wireless Corporation and the Purchasers, as defined 4.13(3) Registration Rights Agreement, dated August 23, 2001, by and among SPEEDCOM Wireless Corporation and the Purchasers, as defined 4.14(3) Form of Series A Warrant of SPEEDCOM Wireless Corporation dated August 23, 2001 4.15(3) Form of Series B Warrant of SPEEDCOM Wireless Corporation dated August 23, 2001 4.16(3) Settlement Agreement between SPEEDCOM Wireless Corporation and I.W. Miller Group, Inc. dated June 25, 2001 4.17 Secured Promissory Note dated April 26, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy Fund, LLC 4.18 Secured Promissory Note dated May 7, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy Fund, LLC. 4.19 Secured Promissory Note dated April 26, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy Institutional Fund LLC 4.20 Secured Promissory Note dated May 7, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy Institutional Fund LLC. 4.21 Secured Promissory Note dated April 26, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy International LTD 4.22 Secured Promissory Note dated May 7, 2002 between SPEEDCOM Wireless Corporation and DMG Legacy International LTD 4.23 Letter Loan Agreement dated April 26, 2002 4.24 Security Agreement dated April 26, 2002 4.25 Letter Agreement dated April 26, 2002 4.26 Agreement to Vote Shares dated April 26, 2002 24.1(3) Powers of Attorney
____________ (1) Incorporated by reference to the Form 10-QSB filed May 14, 2001. (2) Incorporated by reference to the Form 8-K filed July 2, 2001. (3) Incorporated by reference to the Form S-3 filed September 18, 2001. 23 EX-4.17 3 dex417.txt SECURED PROMISSORY NOTE DATED APRIL 26, 2002 Exhibit 4.17 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $82,500.00 New York, New York April 26, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY FUND LLC or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth herein, or at such ------ other place as the holder may designate in writing to the Borrower, the principal sum of up to EIGHTY-TWO THOUSAND FIVE HUNDRED DOLLARS (U.S. $82,500.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter Loan ---- Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter ------ Loan Agreement"). Concurrently with the issuance of this Note, the Borrower is - -------------- issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity -------- Date") of: (i) ninety (90) days following the execution of a definitive - ---- agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change in --------- Control Transaction"); (ii) July 31, 2002, if a Change in Control Transaction - ------------------- has not occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower hereunder shall ------------------ be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to be made shall ---------------------------- be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may prepay, at the ---------------------------- option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower -------- Prepayment Notice") at a cash price equal to 150% of the sum of the outstanding - ----------------- principal amount and any interest accrued and outstanding (the "Borrower -------- Prepayment Price"). The Borrower may not deliver a Borrower Prepayment Notice to - ---------------- the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6th) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, notarized and ----------- unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower 2 shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall be binding ------------------------------------ upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, Breaches and ------------------------------------------------------------ Injunctive Relief. Upon an Event of Default (as defined in the Letter Loan - ----------------- Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this Note ------------------------------- acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE 3 PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically provided ---------------- herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other communication ------- permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: -------------------------- Name: Title: 5 EX-4.18 4 dex418.txt SECURED PROMISSORY NOTE DATED MAY 7, 2002 Exhibit 4.18 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $27,500.00 New York, New York May 7, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY FUND LLC or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth herein, or at such ------ other place as the holder may designate in writing to the Borrower, the principal sum of up to TWENTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS (U.S. $27,500.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter Loan ---- Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter ------ Loan Agreement"). Concurrently with the issuance of this Note, the Borrower is - -------------- issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity Date") of: ------------- (i) ninety (90) days following the execution of a definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change in Control ----------------- Transaction"); (ii) July 31, 2002, if a Change in Control Transaction has not - ----------- occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower hereunder ------------------- shall be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to be made ---------------------------- shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may prepay, at the ---------------------------- option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower -------- Prepayment Notice") at a cash price equal to 150% of the sum of the outstanding - ----------------- principal amount and any interest accrued and outstanding (the "Borrower -------- Prepayment Price"). The Borrower may not deliver a Borrower Prepayment Notice to - ---------------- the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6/th/) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, notarized and ----------- unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the 2 case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall be binding ------------------------------------ upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, Breaches and ------------------------------------------------------------ Injunctive Relief. Upon an Event of Default (as defined in the Letter Loan - ----------------- Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this Note ------------------------------- acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN 3 OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically provided ---------------- herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by and construed -------------- in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other communication ------- permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: ___________________________________ Name: Title: 5 EX-4.19 5 dex419.txt SECURED PROMISSORY NOTE DATED APRIL 26, 2002 Exhibit 4.19 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $292,500.00 New York, New York April 26, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY INSTITUTIONAL FUND LLC or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth ------ herein, or at such other place as the holder may designate in writing to the Borrower, the principal sum of up to TWO HUNDRED NINETY-TWO THOUSAND FIVE HUNDRED DOLLARS (U.S. $292,500.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred ---- to in the Letter Loan Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter Loan Agreement"). Concurrently with the issuance of this --------------------- Note, the Borrower is issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity Date") of: ------------- (i) ninety (90) days following the execution of a definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change in Control ----------------- Transaction"); (ii) July 31, 2002, if a Change in Control Transaction has not - ----------- occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower hereunder shall ------------------ be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to be made shall ---------------------------- be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may prepay, at the ---------------------------- option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower -------- Prepayment Notice") at a cash price equal to 150% of the sum of the outstanding - ----------------- principal amount and any interest accrued and outstanding (the "Borrower -------- Prepayment Price"). The Borrower may not deliver a Borrower Prepayment Notice to - ---------------- the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6/th/) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, notarized and ----------- unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower 2 shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall be binding ------------------------------------ upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, Breaches and ------------------------------------------------------------ Injunctive Relief. Upon an Event of Default (as defined in the Letter Loan - ----------------- Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this Note ------------------------------- acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE 3 PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically provided ---------------- herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other communication ------- permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: -------------------------- Name: Title: 5 EX-4.20 6 dex420.txt SECURED PROMISSORY NOTE DATED MAY 7, 2002 Exhibit 4.20 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $97,500.00 New York, New York May 7, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY INSTITUTIONAL FUND LLC or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth ------ herein, or at such other place as the holder may designate in writing to the Borrower, the principal sum of up to NINETY-SEVEN THOUSAND FIVE HUNDRED DOLLARS (U.S. $97,500.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter ---- Loan Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter Loan Agreement"). Concurrently with the issuance of this Note, the --------------------- Borrower is issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity -------- Date") of: (i) ninety (90) days following the execution of a definitive - ---- agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change in --------- Control Transaction"); (ii) July 31, 2002, if a Change in Control Transaction - ------- ----------- has not occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower hereunder ------------------ shall be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to be made ---------------------------- shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may prepay, at the ---------------------------- option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower -------- Prepayment Notice") at a cash price equal to 150% of the sum of the outstanding - ----------------- principal amount and any interest accrued and outstanding (the "Borrower -------- Prepayment Price"). The Borrower may not deliver a Borrower Prepayment Notice to - ---------------- the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6/th/) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, notarized and ----------- unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the 2 case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall be binding ------------------------------------ upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, Breaches and ------------------------------------------------------------ Injunctive Relief. Upon an Event of Default (as defined in the Letter Loan - ----------------- Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this Note ------------------------------- acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN 3 OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically provided ---------------- herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other communication ------- permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: ___________________________________ Name: Title: 5 EX-4.21 7 dex421.txt SECURED PROMISSORY NOTE DATED APRIL 26, 2002 Exhibit 4.21 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $375,000.00 New York, New York April 26, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY INTERNATIONAL LTD. or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth herein, or ------ at such other place as the holder may designate in writing to the Borrower, the principal sum of up to THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS (U.S. $375,000.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter ---- Loan Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter Loan Agreement"). Concurrently with the issuance of this Note, the --------------------- Borrower is issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity Date") of: (i) ninety (90) days following the execution of a ------------- definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change ------ in Control Transaction"); (ii) July 31, 2002, if a Change in Control Transaction - ---------------------- has not occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower ------------------ hereunder shall be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to ---------------------------- be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may ---------------------------- prepay, at the option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower Prepayment Notice") at a cash price equal to 150% of the sum of the -------------------------- outstanding principal amount and any interest accrued and outstanding (the "Borrower Prepayment Price"). The Borrower may not deliver a Borrower Prepayment ------------------------- Notice to the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6/th/) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, ----------- notarized and unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower 2 shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall ------------------------------------ be binding upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, ----------------------------------------------- Breaches and Injunctive Relief. Upon an Event of Default (as defined in the - ------------------------------ Letter Loan Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this ------------------------------- Note acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE 3 SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically ---------------- provided herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by ------------- and construed in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other ------- communication permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: _______________________________ Name: Title: 5 EX-4.22 8 dex422.txt SECURED PROMISSORY NOTE DATED MAY 7, 2002 Exhibit 4.22 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. SPEEDCOM WIRELESS CORPORATION SECURED PROMISSORY NOTE ----------------------- U.S. $125,000.00 New York, New York May 7, 2002 FOR VALUE RECEIVED, the undersigned, Speedcom Wireless Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of -------- DMG LEGACY INTERNATIONAL LTD. or any future permitted holder of this promissory note (the "Lender"), at the principal office of the Lender set forth herein, or ------ at such other place as the holder may designate in writing to the Borrower, the principal sum of up to ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS (U.S. $125,000.00), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the "Note"). This Note is the Note referred to in the Letter ---- Loan Agreement dated April 26, 2002 between the Borrower and the Lender (the "Letter Loan Agreement"). Concurrently with the issuance of this Note, the --------------------- Borrower is issuing separate notes to separate purchasers pursuant to the Letter Loan Agreement. 1. Principal and Interest Payments. ------------------------------- (a) The Borrower shall repay in full the entire principal balance then outstanding under this Note on the first to occur (the "Maturity -------- Date") of: (i) ninety (90) days following the execution of a definitive - ---- agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lender which would result in a change in control of the Borrower (a "Change in Control Transaction"); (ii) July 31, 2002, if a Change in Control Transaction ----------------------------- has not occurred; or (iii) the acceleration of the obligations as contemplated by this Note. The Maturity Date may be extended as agreed upon in writing between the parties. (b) Interest on the outstanding principal balance of this Note shall accrue at a rate of fifteen percent (15%) per annum. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and shall be payable by the Borrower and shall be payable by the Borrower in cash in full on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Borrower will pay interest to the Lender, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twenty percent (20%) per annum. 2. Security Agreement. The obligations of the Borrower hereunder ------------------ shall be secured by, and the Lender shall be entitled to the rights and security granted by the Borrower pursuant to, the Security Agreement dated as of April 26, 2002 by the Borrower for the benefit of the Lender. 3. Payment on Non-Business Days. Whenever any payment to be made ---------------------------- shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 4. Borrower's Prepayment Option. The Borrower may prepay, at the ---------------------------- option of its Board of Directors, all or any portion of the outstanding principal amount of this Note and the accrued and unpaid interest thereon upon five (5) business days prior written notice to the Lender (the "Borrower -------- Prepayment Notice") at a cash price equal to 150% of the sum of the outstanding - ----------------- principal amount and any interest accrued and outstanding (the "Borrower -------- Prepayment Price"). The Borrower may not deliver a Borrower Prepayment Notice to - ---------------- the Lender unless the Borrower has clear and good funds for a minimum of the amount it intends to prepay in a bank account controlled by the Borrower. The Borrower Prepayment Notice shall state the date of prepayment (the "Borrower -------- Prepayment Date"), the Borrower Prepayment Price, the amount of the Note of such - --------------- Lender to be prepaid, the amount of accrued and unpaid interest through the Borrower Prepayment Date and shall call upon the Lender to surrender to the Borrower on the Borrower Prepayment Date at the place designated in the Borrower Prepayment Notice such Lender's Note. The Borrower Prepayment Date shall be no more than five (5) trading days after the date on which the Lender is notified of the Borrower's intent to prepay the Note (the "Borrower Prepayment Notice -------------------------- Date"). If the Borrower fails to pay the Borrower Prepayment Price by the sixth - ---- (6/th/) trading day following the Borrower Prepayment Notice Date, the prepayment will be declared null and void and the Borrower shall lose its right to deliver a Borrower Prepayment Notice to the Lender in the future. On or after the Borrower Prepayment Date, the Lender shall surrender the Notes called for prepayment to the Borrower at the place designated in the Borrower Prepayment Notice and shall thereupon be entitled to receive payment of the Borrower Prepayment Price. 5. Replacement. Upon receipt of a duly executed, notarized and ----------- unsecured written statement from the Lender with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the 2 case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 6. Parties in Interest, Transferability. This Note shall be binding ------------------------------------ upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 10 of this Note, or pledged, hypothecated or otherwise granted as Security by the Lender. 7. Remedies, Characterizations, Other Obligations, Breaches and ------------------------------------------------------------ Injunctive Relief. Upon an Event of Default (as defined in the Letter Loan - ----------------- Agreement), the Lender shall have all the rights and remedies contained in the Letter Loan Agreement. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note or in the Letter Loan Agreement, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Lender's right to pursue actual damages for any failure by the Borrower to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Lender and that the remedy at law for any such breach may be inadequate. Therefore the Borrower agrees that, in the event of any such breach or threatened breach, the Lender shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 8. Compliance with Securities Laws. The Lender of this Note ------------------------------- acknowledges that this Note is being acquired solely for the Lender's own account and not as a nominee for any other party, and for investment, and that the Lender shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN 3 OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 9. Borrower Waivers. Except as otherwise specifically provided ---------------- herein, the Borrower and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Borrower liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY. (a) No delay or omission on the part of the Lender in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Lender, nor shall any waiver by the Lender of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion. (b) THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 10. Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 11. Notices. Any notice, request, demand or other communication ------- permitted or required to be given hereunder shall be provided in the manner specified in the Letter Loan Agreement. 4 IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first written above. SPEEDCOM WIRELESS CORPORATION By: ________________________________________ Name: Title: 5 EX-4.23 9 dex423.txt LETTER LOAN AGREEMENT DATED APRIL 26, 2002 Exhibit 4.23 DMG LEGACY FUND LLC DMG LEGACY INSTITUTIONAL FUND LLC DMG LEGACY INTERNATIONAL LTD. c/o DMG Advisors LLC One Sound Shore Drive, Suite 202 Greenwich, CT 06830 April 26, 2002 Speedcom Wireless Corporation 1748 Independence Boulevard, D-4 Sarasota, Florida 34243 RE: Letter Loan Agreement --------------------- Ladies and Gentlemen: 1. Loan. This letter when fully executed will constitute a loan agreement ---- (the "Agreement") among DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC, and DMG Legacy International Ltd. (collectively, the "Lenders"), and Speedcom Wireless Corporation, a Delaware corporation ("Borrower"), pursuant to which Lenders, on the terms and conditions provided herein, shall agree to make one or more loans to or for the benefit of Borrower hereunder (each a "Loan" and collectively, the "Loans"), provided the aggregate principal amount of all Loans shall not exceed One Million Dollars ($1,000,000.00). The day on which Lenders make a Loan is referred to herein as a "Closing Date." The initial Closing Date shall be the date hereof and the initial Loan shall be for the principal amount of $750,000.00. The second Closing Date shall be within five (5) days of the date hereof and the second Loan shall be for the principal amount of $250,000.00. Each Lender's obligation to make a Loan is subject to the Borrower's fulfillment of each of the applicable conditions set forth in Section 4 hereof. 2. Loan Documents. -------------- a. Notes. The Loans shall be evidenced by separate promissory notes ----- issued to the Lenders in the principal amount of each such Loan in the form attached hereto as Exhibit A (together with any replacements and substitutes --------- therefor, the "Notes"). The principal amount of the Loans and interest thereon, calculated at the rate of 15% per annum as provided in the Notes, shall be payable as set forth more particularly therein. b. Security Agreement. The Loans shall be secured by a continuing ------------------ security interest in all of the property and assets of the Borrower pursuant to the terms of a security agreement in the form attached hereto as Exhibit B (the --------- "Security Agreement"). c. Letter Agreement. So long as the Loans are outstanding, Michael ---------------- McKinney shall not sell or transfer any of the shares of common stock of the Borrower beneficially owned or held of record by him, including, without limitation, any shares under his control, pursuant to the terms of a letter agreement by and among Michael McKinney and the Lenders in the form attached hereto as Exhibit C --------- (the "Letter Agreement"). d. Agreement to Vote Shares. Michael McKinney shall vote all of the ------------------------ shares of common stock of the Borrower beneficially owned or held of record by him, including, without limitation, any shares under his control, for any Change in Control Transaction (as defined below) which has been approved by the Borrower's Board of Directors, pursuant to the terms of an Agreement to Vote Shares in the form attached hereto as Exhibit D (the "Agreement to Vote --------- Shares"). e. This Agreement, the Notes, the Security Agreement, the Letter Agreement, the Agreement to Vote Shares and each other document which evidences and/or secures the Loans are hereinafter collectively referred to as the "Loan Documents." 3. Term and Termination. Subject to Section 7 hereof, the aggregate -------------------- principal amount of the outstanding Note and all accrued and unpaid interest thereon and other sums owing hereunder and thereunder shall be due and payable on the earliest (the "Maturity Date") of: (i) ninety (90) days following the ------------- execution of a definitive agreement with respect to a bona fide merger, stock sale or sale of all or substantially all of the Borrower's assets with an acquiror acceptable to the Lenders which would result in a change in control of the Borrower (a "Change in Control Transaction"); (ii) July 31, 2002, if a ----------------------------- Change in Control Transaction has not occurred; or (iii) the acceleration of the obligations as contemplated by this Agreement. The Maturity Date may be extended as agreed upon in writing between the parties. 4. Conditions Precedent. -------------------- a. Documents to be Delivered. The obligation of each Lender to make ------------------------- any Loan is subject to the due execution and delivery by Borrower (or Borrower causing the due execution and delivery) to each Lender of each of the following (all documents to be in form and substance satisfactory to each Lender and their counsel): i. This Agreement, the Notes, the Security Agreement, the Letter Agreement, the Agreement to Vote Shares and each other instrument, agreement and document to be executed and/or delivered pursuant to this Agreement and/or the instruments, agreements and documents referred to in this Agreement. ii. A certified copy of the resolutions of the Board of Directors (or if the Board of Directors takes action by unanimous written consent, a copy of such unanimous written consent containing all of the signatures of the members of the Board of Directors) of the Borrower, dated as of the initial Closing Date, authorizing the execution, delivery and performance of the Loan Documents. iii. A certificate, dated as of the applicable Closing Date, signed by an executive officer of the Borrower to the effect that: (i) the representations and warranties set forth in Section 5 of this Agreement are true and correct as of the applicable Closing Date, (ii) it is the intention of the Borrower to comply with the covenants set forth in Section 6 of this Agreement and the Borrower has no reason to believe that it will not be able to comply with the covenants. 2 iv. The Borrower shall have filed all UCC financing statements in form and substance satisfactory to the Lenders at the appropriate offices to create a valid and perfected security interest in the Collateral (as defined in the Security Agreement). v. As a condition to the second Closing, the Employment Agreement Amendments (as defined in Section 6(a) hereof) shall have been executed and delivered to the Lenders. b. Absence of Certain Events. The following events shall not have ------------------------- occurred or be occurring as of any Closing Date: (i) the occurrence of a Material Adverse Effect (as defined below), or (ii) the inability to comply with the covenants. 5. Representations and Warranties. To induce each Lender, severally and ------------------------------ not jointly, to make the Loan, Borrower hereby represents and warrants to each Lender that at and as of the date hereof: a. The Borrower has been duly incorporated and is validly existing and in good standing under the laws of the state of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted. The Borrower is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary and where the failure so to qualify would have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on the ability of the Borrower to perform its obligations hereunder or on the business, operations, properties, prospects or financial condition of the Borrower. b. Each of the Loan Documents has been duly authorized, validly executed and delivered on behalf of the Borrower and is a valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors' rights generally, and the Borrower has full power and authority to execute and deliver this Agreement and the Loan Documents and to perform its obligations hereunder and thereunder. c. The execution, delivery and performance of this Agreement and the Loan Documents will not (i) conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Borrower's certificate of incorporation or by-laws, or (B) any material provision of any indenture, mortgage, deed of trust or other material agreement or instrument to which the Borrower is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any material provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, Federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Borrower, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbrance upon any material property or assets of the Borrower or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject. 3 d. No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Borrower is required in connection with the valid execution and delivery of this Agreement or the Loan Documents. All representations and warranties made by Borrower under or in connection with this Agreement shall survive the making of the Loans and issuance and delivery of the Note to Lenders, notwithstanding any investigation made by Lenders or on Lenders' behalf. All statements contained in any certificate or financial statement delivered by Borrower to Lenders under this Agreement or any other Loan Document shall constitute representations and warranties made by Borrower hereunder. 6. Affirmative Covenants. To induce each Lender, severally and not --------------------- jointly, to make the Loan, Borrower hereby covenants to each Lender as follows: a. On or before the second Closing, the employees of the Borrower listed on Schedule 6(a) hereto shall enter into and execute amendments to their ------------- respective employment agreements which shall state that such employees shall remain employed by the Borrower through any transition period until at least December 31, 2002 regardless of the parties involved in the Change in Control Transaction (the "Employment Agreement Amendments"). The Employment Agreement ------------------------------- Amendments shall be in a form satisfactory to the Lenders. The employees listed on Schedule 6(a) hereto shall use their best efforts to assist in the transition ------------- of operations of the Borrower and to provide the time and service necessary for the integration of the business and operations of the Borrower into the newly formed or combined entity. b. Michael McKinney shall vote all of the shares of common stock of the Borrower beneficially owned or held of record by him, including, without limitation, any shares under his control, which shares are listed on Schedule -------- 6(b) hereto, for any Change in Control Transaction which has been approved by - ---- the Borrower's Board of Directors. Furthermore, Michael McKinney shall use his best efforts to cause his former spouse to vote her shares for such Change in Control Transaction. c. Borrower shall apply $40,400.00 of the proceeds resulting from the issuance of the Note on the second Closing Date for payment to IW Miller and travel expenses to further develop the Borrower's potential transactions with Waverider Communications Inc., Malibu Networks and any other transaction that Lenders may approve. Such $40,400.00 includes $20,000.00 to be paid by the Lenders to Michael Sternberg for consulting services rendered to the Borrower for April 2002 in payment of any fees currently invoiced to the Borrower by Michael Sternberg. The balance of the proceeds received by the Borrower shall be used for general corporate purposes as set forth in the spreadsheets attached hereto as Exhibit E. All applications of proceeds pursuant to this Section 6(c) --------- shall be approved by the Borrower's Board of Directors. d. The term of all outstanding Series B Warrants of the Borrower dated August 23, 2001 shall be extended until the Maturity Date. 4 7. Events of Default; Remedies. Upon the occurrence of any of the --------------------------- following (each, an "Event of Default"): a. the Borrower shall fail to make the payment of any amount of any principal outstanding after the date such payment shall become due and payable hereunder; or b. the Borrower shall fail to make any payment of interest after the date such interest shall become due and payable hereunder; or c. any representation, warranty, covenant or certification made by the Borrower herein, in the Notes, any other Loan Document or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or d. the Borrower or any of its subsidiaries shall (i) default in any payment of any amount or amounts of principal of or interest on any indebtedness for borrowed money (the "Indebtedness") (other than the Indebtedness hereunder) ------------ the aggregate principal amount of which Indebtedness of all such persons is in excess of $100,000, whether such Indebtedness now exists or shall hereinafter be created, and such default entitles the holder thereof to declare such indebtedness to be due and payable, and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within twelve (12) business days of such acceleration, or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness in excess of $100,000 or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness to cause with the giving of notice if required, such Indebtedness to become due prior to its stated maturity; or e. A judgment or order for the payment of money shall be rendered against the Borrower or any subsidiary in excess of $100,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain outstanding, and there shall be any period of thirty (30) consecutive days following entry of the judgment or order in excess of $100,000 or the judgment or order which causes the aggregate amount described above to exceed $100,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or f. the Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) admit in writing its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), (v) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors' rights generally, (vi) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or 5 g. a proceeding or case shall be commenced in respect of the Borrower or any of it's subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of thirty (30) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Borrower or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Borrower or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of thirty (30) consecutive days; or h. The occurrence of any event which has a Material Adverse Effect. THEN, Lenders may, at their election and without demand or notice of any kind, which are hereby waived, declare the unpaid balance of the Notes, and accrued interest thereon, immediately due and payable, proceed to collect the same, and exercise any and all other rights, powers and remedies given it by this Agreement, the Notes and the other Loan Documents or otherwise at law or in equity. 8. Miscellaneous. ------------- a. The representations and warranties of Borrower contained herein shall survive the making of the Loans and shall remain effective until all indebtedness contemplated hereby shall have been paid by Borrower in full. b. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted. c. Each of the Borrower and each Lender (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Loan Documents and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Borrower and each Lender consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 8(j) below and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 8(c) shall affect or limit any right to serve process in any other manner permitted by law. d. Any forbearance, failure, or delay by a Lender in exercising any right, power, or remedy shall not preclude the further exercise thereof, and all of such Lender's rights, 6 powers, and remedies shall continue in full force and effect until specifically waived in writing by such Lender. e. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. f. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. g. 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. h. Borrower shall reimburse Lenders, on demand, for all reasonable fees and costs incurred by Lenders (including reasonable fees and costs of Lenders' counsel) in connection with the enforcement of Lenders' rights and remedies thereunder. i. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement. j. Any notices, demands or waivers required or permitted to be given under the terms of this Agreement shall be in writing and shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five (5) days after being placed in the mail, if mailed, or upon receipt, if delivered personally or by courier, or by facsimile (if received during normal business hours), in each case to the address of the party to receive such notice, demand or waiver as set forth below: If to Borrower: Speedcom Wireless Corporation 7020 Professional Parkway East Sarasota, Florida 34240 Attention: Sara Byrne, Secretary Fax No.: (941) 907-2394 If to any of the Lenders: c/o DMG Advisors LLC One Sound Shore Drive Suite 202 Greenwich, CT 06830 Attention: Andrew Wilder Fax No.: (203) 629-0345 7 with a copy to: Jenkens & Gilchrist Parker Chapin LLP The Chrysler Building 405 Lexington Avenue New York, New York 10174 Attention: Christopher S. Auguste Tel. No.: (212) 704-6000 Fax No.: (212) 704-6288 Each party shall provide notice to the other party of any change in address, such notice to become effective upon receipt. k. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Borrower shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of Lenders. Notwithstanding the foregoing, each Lender may assign its rights hereunder to any other person or entity without the consent of Borrower. l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person. m. All remedies of Lenders (i) are cumulative and concurrent, (ii) may be exercised independently, successively or together against Borrower, (iii) shall not be exhausted by any exercise thereof, but may be exercised as often as occasion therefor may occur, and (iv) shall not be construed to be waived or released by Lenders' delay in exercising, or failure to exercise, them or any of them at any time it may be entitled to do so. [Signature Page Follows] 8 By executing the appropriate signature line below, Borrower, intending to be legally bound hereby, agrees to the terms and conditions of this Agreement as of the date appearing opposite Borrower's signature. Very truly yours, DMG LEGACY FUND LLC By: ______________________________________ Name: Title: DMG LEGACY INSTITUTIONAL FUND LLC By: _____________________________________ Name: Title: DMG LEGACY INTERNATIONAL LTD. By: _____________________________________ Name: Title: SPEEDCOM WIRELESS CORPORATION By: ________________________________________ Name: Michael McKinney Title: Chief Executive Officer 9 Exhibit A --------- Form of Note 10 Exhibit B --------- Form of Security Agreement 11 Exhibit C --------- Form of Letter Agreement 12 Exhibit D --------- Form of Agreement to Vote Shares 13 Exhibit E --------- Use of Proceeds Spreadsheets 14 Schedule 6(a) ------------- William R. Davis Patrick Pacifico Michael McKinney Philip Decker Sara Byrne 15 Schedule 6(b) ------------- Shares directly owned by Michael McKinney: 1,849,995 Shares owned by Michael McKinney as custodian for Molly Michel McKinney: 321,780 Shares owned by Michael McKinney as custodian for Ryan Lewis McKinney: 321,780 16 EX-4.24 10 dex424.txt SECURITY AGREEMENT DATED APRIL 26, 2002 EXHIBIT 4.24 SECURITY AGREEMENT SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time in accordance herewith and including all attachments, exhibits and schedules hereto, the "Agreement"), dated as of April 26, 2002, made by SPEEDCOM WIRELESS CORPORATION, a Delaware corporation (the "Grantor"), in favor of DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC, and DMG Legacy International Ltd. (collectively, the "Secured Parties"). WHEREAS, the Grantor has issued separate senior secured promissory notes to the Secured Parties (the "Notes") in the aggregate principal amount of $1,000,000 pursuant to a Letter Loan Agreement by and among the Grantor and the Secured Parties dated the date hereof (the "Letter Loan Agreement"); and WHEREAS, it is a condition precedent to the Grantor's making the loan evidenced by the Letter Loan Agreement to the Secured Parties that the Grantor execute and deliver to the Secured Parties a security agreement providing for the grant to the Secured Parties of a continuing security interest in all personal property and assets of the Grantor, all in substantially the form hereof to secure all Obligations (hereinafter defined); NOW, THEREFORE, the parties agree as follows: ARTICLE I. Definitions Section 1.1. Definition of Terms Used Herein. All capitalized terms used ------------------------------- herein and not defined herein have the respective meanings provided therefor in the Letter Loan Agreement. All terms defined in the Uniform Commercial Code (hereinafter defined) as in effect from time to time and used herein and not otherwise defined herein (whether or not such terms are capitalized) have the same definitions herein as specified therein. Section 1.2. Definition of Certain Terms Used Herein. As used herein, the ---------------------------------------- following terms have the following meanings: "Collateral" means all accounts receivable of the Grantor and all personal ---------- and fixture property of every kind and nature, including, without limitation, all furniture, fixtures, equipment, raw materials, inventory, or other goods, accounts, contract rights, rights to the payment of money, insurance refund claims and all other insurance claims and proceeds, tort claims, chattel paper, documents, instruments, securities and other investment property, deposit accounts, rights to proceeds of letters of credit and all general intangibles including, without limitation, all tax refund claims, license fees, patents, patent licenses, patent applications, trademarks, trademark licenses, trademark applications, trade names, copyrights, copyright licenses, copyright applications, rights to sue and recover for past infringement of patents, trademarks and copyrights, computer programs, computer software, engineering drawings, service marks, customer lists, goodwill, and all licenses, permits, agreements of any kind or nature pursuant to which the Grantor possesses, uses or has authority to possess or use property 2 (whether tangible or intangible) of others or others possess, use or have authority to possess or use property (whether tangible or intangible) of the Grantor, and all recorded data of any kind or nature, regardless of the medium of recording including, without limitation, all books and records, software, writings, plans, specifications and schematics; and all proceeds and products of each of the foregoing. "Default" means any event or circumstance which, with the giving of notice, ------- the lapse of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute an Event of Default. "Event of Default" has the meaning specified in the Letter Loan Agreement. ---------------- "Indemnitees" has the meaning specified in Section 7.5(b). ----------- "Lien" means: (i) any interest in property securing an obligation owed to, ---- or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute, or contract, and including a security interest, charge, claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes; (ii) to the extent not included under clause (i), any reservation, exception, encroachment, easement, ---------- right-of-way, covenant, condition, restriction, lease or other title exception or encumbrance affecting property; and (iii) any contingent or other agreement to provide any of the foregoing. "Notes" has the meaning assigned to such term in the first recital of this ----- Agreement. "Obligations" means all indebtedness, liabilities, obligations, covenants ----------- and duties of the Grantor to the Secured Parties of every kind, nature and description, direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now existing of hereafter arising under or in connection with the Notes, the Letter Loan Agreement, this Agreement or the other Loan Documents. "Registered Organization" means an entity formed by filing a registration ----------------------- document with a United States Governmental Authority, such as a corporation, limited partnership or limited liability company. "Revised Article 9" has the meaning specified in Section 7.14. ----------------- "Security Interest" has the meaning specified in Section 2.1 of this ----------------- Agreement. "Uniform Commercial Code" means the Uniform Commercial Code from time to ----------------------- time in effect in the State of New York. ARTICLE II. Security Interest Section 2.1. Security Interest. As security for the payment and ----------------- performance, in full of the Obligations, and any extensions, renewals, modifications or refinancings of the Obligations, the Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Secured Parties, and hereby grants to the Secured Parties, their successors 3 and assigns, a security interest in, all of such Grantor's right, title and interest in, to and under the Collateral (the "Security Interest"). ----------------- Section 2.2. No Assumption of Liability. The Security Interest is granted -------------------------- as security only and shall not subject the Secured Parties to, or in any way alter or modify, any obligation or liability of the Grantor with respect to or arising out of the Collateral. ARTICLE III. Representations and Warranties The Grantor represents and warrants to the Secured Parties that: Section 3.1. Title and Authority. The Grantor has good and valid rights in ------------------- and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Secured Parties the Security Interest and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval which has been obtained. Section 3.2. Filings; Actions to Achieve Perfection. Fully executed -------------------------------------- Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Collateral have been delivered to the Secured Parties for filing in each United States governmental, municipal or other office specified in Schedule A, which are all the filings, recordings and registrations that are ---------- necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Secured Parties in respect of all Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements or with respect to the filing of amendments or new filings to reflect the change of the Grantor's name, location, identity or corporate structure. The Grantor's name is listed in the preamble of this Agreement identically to how it appears on its certificate of incorporation or other organizational documents. Section 3.3. Validity and Priority of Security Interest. The Security ------------------------------------------ Interest constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Obligations, (b) subject only to the filings described in Section 3.2 above and other previously perfected security interests in the Collateral listed on Schedule 3.3 to this ------------ Agreement ("Existing Liens"), a perfected security interest in all Collateral in -------------- which a security interest may be perfected by filing, recording or registration in the United States pursuant to the Uniform Commercial Code or other applicable law in the United States (or any political subdivision thereof) and its territories and possessions or any other country, state or nation (or any political subdivision thereof). The Security Interest is and shall be subordinate to any other Existing Lien on any of the Collateral. Section 3.4. Absence of Other Liens. The Grantor's Collateral is owned by ---------------------- the Grantor free and clear of any Lien other than Existing Liens. Without limiting the foregoing and except as set forth on Schedule 3.4 to this ------------ Agreement, the Grantor has not filed or consented to any 4 filing described in Schedule A in favor of any Person other than the Secured ---------- Parties, nor permitted the granting or assignment of a security interest or permitted perfection of any security interest in the Collateral in favor of any Person other than the Secured Parties. The Grantor's having possession of all instruments and cash constituting Collateral from time to time and the filing of financing statements in the offices referred to in Schedule A hereto results in ---------- the perfection of such security interest. Such security interest is, or in the case of Collateral in which the Grantor obtain rights after the date hereof, will be, a perfected, first priority security interest. Such notices, filings and all other action necessary or desirable to perfect and protect such security interest have been duly taken. Section 3.5. Valid and Binding Obligation. This Agreement constitutes the ---------------------------- legal, valid and binding obligation of the Grantor, enforceable against the Grantor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in this Agreement may be limited by applicable federal or state securities laws. ARTICLE IV. Covenants Section 4.1. Change of Name; Location of Collateral; Place of Business, ----------------------------------------------------------- State of Formation or Organization. - ---------------------------------- (a) The Grantor shall notify the Secured Parties in writing promptly of any change (i) in its corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of its chief executive office, its principal place of business, any office in which it maintains books or records relating to Collateral owned by it (including the establishment of any such new office or facility), (iii) in its identity or corporate structure such that a filed filing made under the Uniform Commercial Code becomes misleading or (iv) in its Federal Taxpayer Identification Number. In extension of the foregoing, the Grantor shall not effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Secured Parties to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Collateral. (b) Without limiting Section 4.1(a), without the prior written consent of the Secured Parties in each instance, the Grantor shall not change its (i) principal residence, if it is an individual, (ii) place of business, if it has only one place of business and is not a Registered Organization, (iii) principal place of business, if it has more than one place of business and is not a Registered Organization, or (iv) state of incorporation, formation or organization, if it is a Registered Organization. Section 4.2. Records. The Grantor shall maintain, at its own cost and ------- expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which the Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect 5 to any part of the Collateral, and, at such time or times as the Secured Parties may reasonably request, promptly to prepare and deliver to the Secured Parties a duly certified schedule or schedules in form and detail satisfactory to the Secured Parties showing the identity, amount and location of any and all Collateral. Section 4.3. Periodic Certification; Notice of Changes. In the event there ----------------------------------------- should at any time be any change in the information represented and warranted herein or in the documents and instruments executed and delivered in connection herewith, the Grantor shall immediately notify the Secured Parties in writing of such change (this notice requirement shall be in extension of and shall not limit or relieve the Grantor of any other covenants hereunder). Section 4.4. Protection of Security. The Grantor shall, at its own cost and ---------------------- expense, take any and all actions necessary to defend title to the Collateral against all persons and to defend the Security Interest of the Secured Parties in the Collateral and the priority thereof against any Lien. Section 4.5. Inspection and Verification. The Secured Parties and such --------------------------- persons as the Secured Parties may reasonably designate shall have the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Collateral is located, to discuss the Grantor's affairs with the officers of the Grantor and its independent accountants and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Collateral, including, in the case of collateral in the possession of any third Person, by contacting any account debtor or third Person possessing such Collateral for the purpose of making such a verification. Out-of-pocket expenses in connection with any inspections by representatives of the Secured Parties shall be (a) the obligations of the Grantor with respect to any inspection after the Secured Parties' demand payment of the Notes or (b) the obligation of the Secured Parties in any other case. Section 4.6. Taxes; Encumbrances. At their option, the Secured Parties may ------------------- discharge, Liens other than Existing Liens at any time levied or placed on the Collateral and may pay for the maintenance and preservation of the Collateral to the extent the Grantor fails to do so and the Grantor shall reimburse the Secured Parties on demand for any payment made or any expense incurred by the Secured Parties pursuant to the foregoing authorization; provided, however, that nothing in this Section shall be interpreted as excusing the Grantor from the performance of, or imposing any obligation on the Secured Parties to cure or perform, any covenants or other obligation of the Grantor with respect to any Lien or maintenance or preservation of Collateral as set forth herein. Section 4.7. Use and Disposition of Collateral. The Grantor shall not make --------------------------------- or permit to be made an assignment, pledge or hypothecation of any Collateral or shall grant any other Lien in respect of the Collateral without the prior written consent of the Secured Parties. The Grantor shall not make or permit to be made any transfer of any Collateral and the Grantor shall remain at all times in possession of the Collateral owned by it, other than with respect to Existing Liens and other liens approved by the Secured Parties. Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time ------------------------ following the date of this Agreement, Grantor, at its own expense, shall maintain or cause to be maintained 6 insurance covering physical loss or damage to the Collateral. In extension of the foregoing and without limitation, such insurance shall be payable to the Secured Parties as loss payee under a "standard" loss payee clause, and the Secured Parties shall be listed as an "additional insured" on Grantor's general liability insurance. Such insurance shall not be terminated, cancelled or not renewed for any reason, including non-payment of insurance premiums, unless the insurer shall have provided the Secured Parties at least 30 days prior written notice. Grantor irrevocably makes, constitutes and appoints the Secured Parties (and all officers, employees or agents designated by the Secured Parties) as its true and lawful agent and attorney-in-fact for the purpose, at any time following the Secured Parties' demand for payment of the Notes, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Secured Parties may, without waiving or releasing any obligation or liability of Grantor hereunder, in their sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Secured Parties deem advisable. All sums disbursed by the Secured Parties in connection and in accordance with this Section, including reasonable attorneys' fees, court costs, expenses and other charges relating thereto, shall be payable upon demand, by Grantor to the Secured Parties and shall be additional Obligations secured hereby. Grantor shall promptly notify the Secured Parties if any material portion of the Collateral owned or held by Grantor is damaged or destroyed. The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall (i) so long as the Secured Parties have not demanded payment of the Notes, be disbursed to Grantor for direct application by Grantor solely to the repair or replacement of Grantor's property so damaged or destroyed, and (ii) in all other circumstances, be held by the Secured Parties as cash collateral for the Obligations. The Secured Parties may, at their sole option, disburse from time to time all or any part of such proceeds so held as cash collateral, upon such terms and conditions as the Secured Parties may reasonably prescribe, for direct application by the Secured Parties solely to the repair or replacement of Grantor's property so damaged or destroyed, or Grantor may apply all or any part of such proceeds to the Obligations. Section 4.9. Legend. Grantor shall legend, in form and manner satisfactory ------ to the Secured Parties, its accounts and its books, records and documents evidencing or pertaining thereto with an appropriate reference to the fact that such accounts have been assigned to the Secured Parties and that the Secured Parties have a security interest therein. ARTICLE V. Further Assurances; Power of Attorney Section 5.1. Further Assurances. Grantor shall, at its own expense, ------------------ execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Secured Parties may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be 7 immediately pledged and delivered to the Secured Parties, duly endorsed in a manner satisfactory to the Secured Parties. Section 5.2. Power of Attorney. ----------------- (a) Grantor hereby irrevocably (as a power coupled with an interest) constitutes and appoints the Secured Parties (and all officers, employees or agents designated by the Secured Parties), its attorney-in-fact with full power of substitution, for the benefit of the Secured Parties, (i) to take all appropriate action and to execute all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement, and without limiting the generality of the foregoing, Grantor hereby grants the power to file one or more financing statements (including fixture filings), continuation statements, filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by Grantor, without the signature of Grantor, and naming Grantor as debtor and the Secured Parties as secured party; and (ii) at any time following the Secured Parties' demand for payment of the Notes (i) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (ii) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (iii) to sign the name of Grantor on any invoice or bill of lading relating to any of the Collateral; (iv) to send verifications of accounts to any account debtor or any other Person liable for an account; (v) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (vi) to settle, compromise, compound, adjust or defend any actions, suits or proceeding relating to all or any of the Collateral; and (vii) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Secured Parties were the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Secured Parties to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Secured Parties, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby, and no action taken or omitted to be taken by the Secured Parties with respect to the Collateral or any part thereof shall give rise to any defense, counterclaim or offset in favor of Grantor or to any claim or action against the Secured Parties. (b) The provisions of this Article shall in no event relieve Grantor of any of its obligations hereunder with respect to the Collateral or any part thereof or impose any obligation on the Secured Parties to proceed in any particular manner with respect to the Collateral or any part thereof, or in any way limit the exercise by the Secured Parties of any other or further right 8 which it may have on the date of this Agreement or hereafter, whether hereunder, by law or otherwise. ARTICLE VI. Remedies Section 6.1. Remedies upon Default. --------------------- (a) Upon the occurrence and during the continuance of an Event of Default, Grantor agrees to deliver each item of its Collateral to the Secured Parties on demand, and it is agreed that the Secured Parties shall have the right to take any of or all the following actions at the same or different times (but at all times subject to any Existing Liens): with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, exercise Grantor's right to bill and receive payment for completed work and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, Grantor agrees that the Secured Parties shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Secured Parties shall deem appropriate. The Secured Parties shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Secured Parties shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Grantor, and Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. (b) The Secured Parties shall give Grantor ten (10) days' written notice (which Grantor agrees is reasonable notice within the meaning of Section 9-504(3) of the Uniform Commercial Code) of the Secured Parties' intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Secured Parties may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Secured Parties may (in their sole and absolute discretion) determine. The Secured Parties shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Secured Parties may, without 9 notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Secured Parties until the sale price is paid by the purchaser or purchasers thereof, but the Secured Parties shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section, the Secured Parties may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to the Secured Parties from Grantor as a credit against the purchase price, and the Secured Parties may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Secured Parties shall be free to carry out such sale pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Secured Parties shall have entered into such an agreement all Obligations have been paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Secured Parties may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Section 6.2. Application of Proceeds. The Secured Parties shall apply the ----------------------- proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: (a) FIRST, to the payment of all costs and expenses incurred by the Secured Parties in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder, under the Letter Loan Agreement, the Notes and the other Loan Documents; (b) SECOND, to the payment in full of the Obligations; and (c) THIRD, to Grantor, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may otherwise direct. Subject to the foregoing, the Secured Parties shall have absolute discretion as to the time of application of such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Secured Parties (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of any such proceeds, moneys or balances by the Secured Parties or of the officer making the sale shall be a sufficient discharge to the 10 purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Secured Parties or such officer or be answerable in any way for the misapplication thereof. Section 6.3. Grant of License to Use Intellectual Property. For the purpose --------------------------------------------- of enabling the Secured Parties to exercise rights and remedies under this Article at such time as the Secured Parties shall be lawfully entitled to exercise such rights and remedies, Grantor hereby grants to the Secured Parties an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to Grantor) to use, license or sub-license any of the Collateral consisting of intellectual property now owned or hereafter acquired by Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Secured Parties may be exercised, at the option of the Secured Parties, only following the Secured Parties' demand for payment of the Notes. ARTICLE VII. Miscellaneous Section 7.1. Notices. All communications and notices hereunder to the ------- Grantor and to the Secured Parties shall (except as otherwise expressly permitted herein) be in writing and delivered to the Grantor or the Secured Parties, as the case may be, as provided in the Letter Loan Agreement. Section 7.2. Security Interest Absolute. All rights of the Secured Parties -------------------------- hereunder, the Security Interest and all obligations of Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Letter Loan Agreement, the Notes, any Loan Document or any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Letter Loan Agreement, the Notes, any Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, Grantor in respect of the Obligations or this Agreement. Section 7.3. Survival of Agreement. All covenants, agreements, --------------------- representations and warranties made by Grantor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the making of the loan and the execution and delivery to the Secured Parties of the Notes, regardless of any investigation made by the Secured Parties or on their behalf; and shall continue in full force and effect until this Agreement shall terminate. Section 7.4. Binding Effect; Several Agreement; Successors and Assigns. --------------------------------------------------------- This Agreement shall become effective as to Grantor when a counterpart hereof executed on behalf of Grantor shall have been delivered to the Secured Parties and a counterpart hereof shall have been executed on behalf of the Secured Parties, and thereafter shall be binding upon Grantor and the 11 Secured Parties and their respective successors and assigns, and shall inure to the benefit of Grantor, the Secured Parties and their respective successors and assigns, except that Grantor shall not have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents. Section 7.5. Secured Parties' Fees and Expense; Indemnification. -------------------------------------------------- (a) Grantor agrees to pay upon demand to the Secured Parties the amount of any and all reasonable expenses, including all reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Secured Parties may incur in connection with (i) the administration of this Agreement (including the customary fees and charges of the Secured Parties for any audits conducted by them or on their behalf with respect to the accounts inventory), (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Secured Parties hereunder or (iv) the failure of Grantor to perform or observe any of the provisions hereof. (b) Grantor agrees to indemnify the Secured Parties and the agent, contractors and employees of the Secured Parties (collectively, the "Indemnitees") against, and hold each of them harmless from, any and all ----------- losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery, or performance of this Agreement or any agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. (c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby. The provisions of this Section shall remain operative and in full force and effect regardless of the termination of this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents, or any investigation made by or on behalf of the Secured Parties. All amounts due under this Section shall be payable on written demand therefor. Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE ------------- WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Section 7.7. Waivers; Amendment. ------------------ 12 (a) No failure or delay of the Secured Parties in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Secured Parties hereunder and under the Letter Loan Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents or consent to any departure by Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements, in writing entered into by the Secured Parties and Grantor. Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE -------------------- FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE LETTER LOAN AGREEMENT OR THE NOTES. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LETTER LOAN AGREEMENT AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Section 7.9. Severability. In the event any one or more of the provisions ------------ contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. Section 7.10. Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. Each party shall be entitled to rely on a facsimile signature of any other party hereunder as if it were an original. Section 7.11. Jurisdiction; Consent to Service of Process. ------------------------------------------- (a) Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of 13 the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, the Letter Loan Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Secured Parties may otherwise have to bring any action or proceeding relating to this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents against Grantor or its properties in the courts of any jurisdiction. (b) Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.1. Nothing in this Agreement will affect the right of any party to this Agreement to process in any other manner permitted by law. Section 7.12. Termination. This Agreement and the Security Interest shall ----------- terminate when all the Obligations have been paid in full, at which time the Secured Parties shall execute and deliver to Grantor, at Grantor's expense, all Uniform Commercial Code termination statements and similar documents which Grantor shall reasonably request to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section shall be without recourse to or warranty by the Secured Parties. Section 7.13. Prejudgment Remedy Waiver. Grantor acknowledges that this ------------------------- Agreement, the Letter Loan Agreement, the Notes and the other Loan Documents evidence a commercial transaction and that it could, under certain circumstances have the right, to notice of and hearing on the right of the Secured Parties to obtain a prejudgment remedy, such as attachment, garnishment and/or replevin, upon commencing any litigation against Grantor. Notwithstanding, Grantor hereby waives all rights to notice, judicial hearing or prior court order to which it might otherwise have the right under any state or federal statute or constitution in connection with the obtaining by the Secured Parties of any prejudgment remedy by reason of this Agreement, the Letter Loan Agreement, the Notes, the other Loan Documents or by reason of the Obligations or any renewals or extensions of the same. Grantor also waives any and all objection which it might otherwise assert, now or in the future, to the exercise or use by the Secured Parties of any right of setoff, repossession or self help as may presently exist under statute or common law. Section 7.14. Concerning Revised Article 9 of the Uniform Commercial Code. ----------------------------------------------------------- The parties acknowledge and agree to the following provisions of this Agreement in anticipation of the possible application, in one or more jurisdictions to the transactions contemplated hereby, of 14 the revised Article 9 of the Uniform Commercial Code in the form or substantially in the form approved in 1998 by the American Law Institute and the National Conference of Commissioners on Uniform State Law ("Revised Article 9"). ----------------- (a) In applying the law of any jurisdiction in which Revised Article 9 is in effect, the Collateral is all assets of Grantor, whether or not within the scope of Revised Article 9. The Collateral shall also include, without limitation, the following categories of assets as defined in Revised Article 9: goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents, accounts (including health-care-insurance receivables), chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, general intangibles (including payment intangibles and software), supporting obligations and any and all proceeds of any thereof, wherever located, whether now owned and hereafter acquired. If Grantor shall at any time, whether or not Revised Article 9 is in effect in any particular jurisdiction, acquire a commercial tort claim, as defined in Revised Article 9, Grantor shall immediately notify the Secured Parties in a writing signed by Grantor of the brief details thereof and grant to the Secured Parties in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured Parties. The Secured Parties may at any time and from time to time, pursuant to the provisions of Article V, file financing statements, continuation statements and amendments thereto that describe the Collateral as all assets of Grantor or words of similar effect and which contain any other information required by Part 5 of Revised Article 9 for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including whether Grantor is an organization, the type of organization and any organization identification number issued to Grantor. Grantor shall furnish any such information to the Secured Parties promptly upon request. Any such financing statements, continuation statements or amendments may be signed by the Secured Parties on behalf of Grantor, as provided in Article V, and may be filed at any time in any jurisdiction whether or not Revised Article 9 is then in effect in that jurisdiction. (b) Grantor shall at any time and from time to time, whether or not Revised Article 9 is in effect in any particular jurisdiction, take such steps as the Secured Parties may reasonably request for the Secured Parties (i) to obtain an acknowledgement, in form and substance satisfactory to the Secured Parties, of any bailee having possession of any of the Collateral that the bailee holds such Collateral for the Secured Parties, (ii) to obtain "control" of any investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such terms are defined in Revised Article 9 with corresponding provisions in ss.ss. 9-104, 9-105, 9-106 and 9-107 relating to what constitutes "control" for such items of Collateral), with any agreements establishing control to be in form and substance satisfactory to the Secured Parties, and (iii) otherwise to insure the continued perfection and priority of the Secured Parties' security interest in any of the Collateral and of the preservation of its rights therein, whether in anticipation and following the effectiveness of Revised Article 9 in any jurisdiction. (c) Nothing contained in this Section shall be construed to narrow the scope of the security interest granted hereby in any of the Collateral or the perfection or priority thereof or to impair or otherwise limit any of the rights, powers, privileges or remedies of the Secured Parties hereunder except as (and then only to the extent) specifically mandated by Revised Article 9 to the extent then applicable. 15 [Signature page follows] IN WITNESS WHEREOF, the parties have duly executed this Security Agreement as of the day and year first written above. SPEEDCOM WIRELESS CORPORATION By:_________________________________ Name: Title: DMG LEGACY FUND LLC By:_________________________________ Name: Title: DMG LEGACY INSTITUTIONAL FUND LLC By:_________________________________ Name: Title: DMG LEGACY INTERNATIONAL LTD. By:_________________________________ Name: Title: SCHEDULE A Places of Business; Chief Executive Office; Filing Locations State of Incorporation: - ---------------------- Delaware Chief Executive Office: - ---------------------- 1748 Independence Boulevard, D-4 Sarasota, Florida 34243 Filing Locations: - ---------------- Secretary of State of the State of Delaware 18 SCHEDULE 3.3 Existing Liens Alliance Financial Capital, Inc. 700 Airport Blvd. Burlingame, CA 94010 Alliance Financial Capital, Inc. holds a lien on receivables, inventory and all other assets of the Grantor. 19 SCHEDULE 3.4 Absence of Other Liens Alliance Financial Capital, Inc. 700 Airport Blvd. Burlingame, CA 94010 Alliance Financial Capital, Inc. holds a lien on receivables, inventory and all other assets of the Grantor. EX-4.25 11 dex425.txt LETTER AGREEMENT DATED APRIL 26, 2002 Exhibit 4.25 April 26, 2002 Speedcom Wireless Corporation 1748 Independence Boulevard, D-4 Sarasota, Florida 34243 Attention: Sara Byrne DMG Legacy Fund LLC DMG Legacy Institutional Fund LLC DMG Legacy International Ltd. c/o DMG Advisors LLC One Sound Shore Drive, Suite 202 Greenwich, CT 06830 Re: Letter Agreement ---------------- Ladies and Gentlemen: This Letter Agreement is the Letter Agreement referred to in the Letter Loan Agreement (the "Letter Loan Agreement") dated as of April 26, 2002 by and --------------------- among Speedcom Wireless Corporation (the "Company"), DMG Legacy Fund LLC, DMG ------- Legacy Institutional Fund LLC and DMG Legacy International Ltd. (collectively, the "Lenders"). Capitalized terms used and not otherwise defined herein shall ------- have the meanings set forth for such terms in the Letter Loan Agreement. Pursuant to Sections 2(c) and 4(a)(i) of the Letter Loan Agreement and as an inducement to the Lenders to make the Loans, I hereby agree not to sell or transfer any of the shares of common stock of the Company as set forth on Schedule I to this Letter Agreement beneficially owned by me, including, - ---------- without, limitation, any shares under my control (the "Shares"). I hereby ------ acknowledge and agree that so long as the Loans are outstanding, I will not sell or transfer any of the Shares. Sincerely, Michael McKinney Schedule I ---------- Shares directly owned by Michael McKinney: 1,849,995 Shares owned by Michael McKinney as custodian for Molly Michel McKinney: 321,780 Shares owned by Michael McKinney as custodian for Ryan Lewis McKinney: 321,780 -2- EX-4.26 12 dex426.txt AGREEMENT TO VOTE SHARES DATED APRIL 26, 2002 Exhibit 4.26 ------------ AGREEMENT TO VOTE SHARES ------------------------ THIS AGREEMENT TO VOTE SHARES ("Agreement") is executed as of April 26, 2002, by and between Michael W. McKinney ("McKinney") and Speedcom Wireless Corporation ("Speedcom"). WHEREAS, certain lenders of funds to Speedcom (the "Lenders") have required that McKinney enter into this Agreement as a condition of lending funds; NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows: 1. Agreement To Vote Shares. McKinney agrees to vote, or cause to be ------------------------ voted, all of the shares of common stock of Speedcom ("Common Stock") over which he has voting authority, at any meeting of the stockholders of Speedcom and in any action by written consent of the stockholders of Speedcom, in favor of a bona fide merger, stock sale or sale of all or substantially all of Speedcom's assets (a "Change of Control Transaction") with an acquiror acceptable to the Lenders which would result in a change in control of Speedcom and which has been approved by Speedcom's Board of Directors. In addition, McKinney shall use his best efforts to cause his former spouse to vote shares of Common Stock over which she has voting authority in the same manner. 2. Miscellaneous. ------------- (a) This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without regard to its conflicts of laws provisions. (b) This Agreement may not be assigned by any party hereto without the prior written consent of the other parties hereto. (c) This Agreement supersedes any prior agreement or understanding, whether written or oral, between the parties with respect to the subject matter of this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, executors, legal representatives, successors and permitted assigns. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. (d) This Agreement may be executed in separate counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. (e) This Agreement shall terminate upon the earlier of (1) the payment of all obligations due to the Lenders and (2) the closing of a Change of Control Transaction. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. _________________________ Michael W. McKinney SPEEDCOM WIRELESS CORPORATION By:_________________________ Its:__________________________ -2- -----END PRIVACY-ENHANCED MESSAGE-----