As filed with the Securities and Exchange Commission on December 10, 1999
Registration No. ______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
WAVERIDER COMMUNICATIONS INC.
------------------------------------------------------
(Exact name of registrant as specified in its Charter)
Nevada 33-0264030
- -------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
(416) 502-3200
----------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
T. SCOTT WORTHINGTON
255 Consumers Road, Suite 500, Toronto, Ontario Canada M2J 1R4
(416) 502-3200 / Facsimile No.: (416) 502-2968
--------------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
DAVID A. BROADWIN, ESQ.
FOLEY, HOAG & ELIOT LLP
One Post Office Square, Boston, Massachusetts 02109-2170
(617) 832-1000 / Facsimile No.: (617) 832-7000
Approximate date of commencement of proposed sale to the public: As soon as
practicable from time to time after the Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Proposed
Maximum maximum Amount of
Title of each class of Amount to be offering price aggregate registration
Securities to be registered Registered per share offering price fee
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, $.001 par value (1) 12,157,777 $1.66 (2) $20,181,909
--------------------------------------------------------------------------------------------------------------------------------
Warrants to purchase 3,925,925 shares of
Common Stock (3) 3,925,925 $0.05 $196,296
--------------------------------------------------------------------------------------------------------------------------------
Underwriter's Warrants 444,444 $0.01 $4,444
--------------------------------------------------------------------------------------------------------------------------------
Total $20,382,649 $5,675 (4)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 4,370,370 shares of Common Stock issuable upon exercise of
Warrants and Underwriters' Warrants and 380,000 shares of Common Stock
issuable upon exercise of Warrants by certain selling shareholders.
(2) Estimated solely for the purposes of determining the registration fee. In
accordance with Rule 457(c) under the Securities Act of 1933, the above
calculation is based on the closing bid price reported on the OTC Bulletin
Board on December 8, 1999
(3) Includes 222,222 warrants issuable upon exercise of Underwriters' Warrants.
(4) $6,960,000 of shares of Common Stock was previously registered on
Registration Statement No. 333-86251, and a fee of $1,935 was paid in
connection therewith.
In accordance with Rule 416 under the Securities Act of 1933, this
Registration Statement also covers such indeterminate number of additional
shares of WaveRider's common stock, $0.001 par value, as may become issuable to
prevent dilution resulting from stock splits, stock dividends or similar
transactions as set forth in WaveRider's Articles of Incorporation and the terms
of the warrants referred to above.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT, OF WHICH THIS
PROSPECTUS IS PART, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
PROSPECTUS
SUBJECT TO COMPLETION, DATED December 9, 1999
WaveRider Communications Inc.
12,157,777
SHARES OF COMMON STOCK
AND
4,370,370
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
This prospectus is to register the sale of 11,777,777 shares of Common
Stock resulting from the offering of 7,407,407 shares of the Common Stock and
4,370,370 Warrants. Each warrant is exercisable for up to two years at $2.00 per
common share purchase warrant.
This prospectus is to also register the sale of 380,000 shares of
common stock by certain selling shareholders.
WaveRider's common stock is currently quoted on the OTC Bulletin Board,
under the symbol "WAVC". On December 8, 1999, the last reported sale price of
WaveRider's common stock was $1.6875 per share.
The mailing address, the telephone and facsimile numbers and the e-mail
address of WaveRider's executive offices is:
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
Telephone No.: (416) 502-3200; Facsimile No.: (416) 502-2968
e-mail address: [email protected]
home page: http://www.waverider.com
Information contained in WaveRider's website shall not be deemed part of this
prospectus.
Investing in the common stock involves risks.
See "Risk Factors" beginning on page 3.
The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
1
<PAGE>
TABLE OF CONTENTS
Page
Risk Factors 3
Where You Can Find More Information 7
Use of Proceeds 9
Dividend Policy 9
Selling Stockholders 9
Plan of Distribution 10
Disclosure of SEC Position on Indemnification
for Securities Act Liabilities 12
Legal Matters 12
Experts 12
In purchasing the shares under this prospectus, you should rely only on
the information provided to you in this prospectus. WaveRider has not authorized
anyone else to provide you with different information. Neither WaveRider nor any
of the selling stockholders is making an offer of these securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front page
of this prospectus. In this prospectus, reference to "we", "us" and "our" refer
to WaveRider Communications Inc.
2
<PAGE>
RISK FACTORS
Investment in our shares of common stock is risky. In addition to the
information contained in this prospectus, including information incorporated by
reference, you should consider carefully the following risk factors, before
purchasing the shares offered under this prospectus.
We have a limited operating history, therefore there is a high degree of
uncertainty whether our business plans or our products will be successful.
Up to the present time, our company has been entirely a research and
development entity with insignificant sales or revenues. There can be no
assurance that the products that we offer will meet with market acceptance. In
addition, there is no guarantee that even if there proves to be a market for our
products, such market will be able to sustain our profitability requirements.
None of our current products has achieved widespread distribution or
customer acceptance. Although some of our products have passed the development
stage, we have not yet established a market for them. Although we believe that
we have the expertise to commercialize our products and establish a market for
them, there is no assurance that we will be successful or that such products
will prove to have widespread customer appeal.
We have a history of losses, and our future profitability is uncertain.
Due to our limited operating history, we are subject to the
uncertainties and risks associated with any new business. Until recently we had
no product that could be commercialized, and therefore we experienced
significant operating losses every year since incorporation. Our net losses for
the fiscal quarter that ended September 30, 1999 and the year that ended
December 31, 1998 were $1,673,377 and $4,477,518, respectively, and for the
fiscal quarter that ended September 30, 1998 and the year that ended December
31, 1997 were $ 1,101,275 and $1,324,960, respectively. We had an accumulated
deficit of $14,715,165 as of September 30, 1999.
There can be no assurance that we will ever generate an overall profit
from our products or that we will ever reach profitability on a sustained basis.
Competition in the data communication industry is intense and there is
uncertainty that given our new technology and limited resources that we will be
able to succeed.
Although our products are based on a wireless technology, we compete
not only against companies that base their products on wireless technology, but
also against companies that base their products on hard-wired technology (wire
or fiber optic cable). There can be no assurance that we will be able to compete
successfully in the future against existing or new competitors or that our
operating results will not be adversely affected by increased price competition.
Competition is based on design and quality of the products, product performance,
price and service, with the relative importance of such factors varying among
products and markets. Competition, in the various markets we serve, comes from
companies of various sizes, many of which are larger and have greater financial
and other resources than we do and thus can better withstand adverse economic
or market conditions than we can.
3
<PAGE>
Our technology is at an early stage of development. As a result, we
have little historical financial information upon which you as an investor could
make an evaluation of your investment. Our future operating results are subject
to a number of risks, including our ability or inability to implement our
strategic plan, to attract qualified personnel and to raise sufficient financing
as required. Inability of our management to guide growth effectively, including
implementing appropriate systems, procedures and controls, could have a material
adverse effect on our business, financial condition and operating results.
The data communication industry is in a state of rapid technological change and
we may not be able to keep up.
We may be unable to keep up with technological advances in the data
communications industry. As a result, our products may become obsolete or
unattractive. The data communications industry is characterized by rapid
technological change. In addition to frequent improvements of existing
technology, there is frequent introduction of new technologies leading to more
complex and powerful products. Keeping up with these changes requires
significant management, technological and financial resources. As a small
company, we do not have the management, technological and financial resources
that larger companies in our industry may have. There can be no assurance that
we will be able or successful in enhancing our existing products, or in
developing, manufacturing and marketing new products. An inability to do so
would adversely effect our business, financial condition and results of
operation.
We have limited intellectual property protection and there is risk that our
competitors will be able to appropriate our technology.
Our ability to compete depends to a significant extent on our ability
to protect our intellectual property and to operate without infringing the
intellectual property rights of others. We regard our technology as proprietary.
We have no issued patents or pending patent applications, nor do we have any
registered copyrights with respect to our intellectual property rights, but we
intend to file patent applications. We rely on employee and third party
non-disclosure agreements and on the legal principles restricting the
unauthorized disclosure and use of trade secrets. Despite our precautions, it
might be possible for a third party to copy or otherwise obtain our technology,
and use it without authorization. Although we intend to defend our intellectual
property, we can not assure you that the steps we have taken or that we may take
in the future will be sufficient to prevent misappropriation or unauthorized use
of our technology. In addition, there can be no assurance that foreign
intellectual property laws will protect our intellectual property rights. There
is no assurance that patent application or copyright registration that may be
filed will be granted or that any issued patent or copyrights will not be
challenged, invalidated or circumvented. There is no assurance that the rights
granted under patents that may be issued or copyrights that may be registered
will provide sufficient protection to our intellectual property rights.
Moreover, we cannot assure you, that our competitors will not independently
develop technologies similar or superior to our technology.
4
<PAGE>
Use of our products is subordinated to other uses and there is risk that our
customers may have to limit or discontinue the use of our products.
License-free operation of our products, in certain radio frequency
bands, is subordinated to certain licensed and unlicensed uses of these bands.
This subordination means that our products must not cause harmful interference
to other equipment operating in the band, and must accept potential interference
from any of such other equipment. If our equipment is unable to operate without
any such harmful interference, or is unable to accept interference caused by
others, our customers could be required to cease operations in some or all of
these bands in the locations affected by the harmful interference. As well, in
the event these bands become unacceptably crowded, and no additional frequencies
are allocated to unlicensed use, our business could be adversely affected.
Currently, our products are designed to operate in frequency bands for
which licenses are not currently required in the United States, Canada and other
countries that we view as our potential market. Extensive regulation of the data
communications industry by U.S. or foreign governments, and in particular
imposing license requirements in the frequency bands of our products, could
materially and adversely affect us through the effect on our customers and
potential customers. Continued license-free operation will depend upon the
continuation of existing U.S., Canadian and such other countries' government
policy and, while no planned policy changes have been announced or are expected,
this cannot be assured.
Adverse consequences and possible dilution are associated with our obligation to
issue substantial shares of common stock upon conversion of convertible
securities.
We are obligated to issue a substantial number of shares of common
stock upon the conversion or exercise of our outstanding warrants and
convertible preferred stock. The price which we may receive for the common stock
issuable upon conversion or exercise of such convertible securities may be less
than the market price of the common stock at the time of such exercise.
Consequently, for the life of such convertible securities, the holders of such
convertible securities may have been given, at nominal cost, the opportunity to
profit from a rise in the market price of the common stock.
The exercise of all of the aforementioned securities may also adversely
affect the terms under which we could obtain additional equity capital. In
addition, should a significant number of these 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 our outstanding common
stock.
We May Be Subject To Product Liability Claims, And We Lack Product Liability
Insurance.
We face an inherent risk of exposure to product liability claims in the
event that the products designed and sold by us contain errors, "bugs" or
defects. There can be no assurance that we will avoid significant product
liability exposure. We do not currently have product liability insurance, and
there can be no assurance that insurance coverage will be available in the
future on commercially reasonable terms, or at all. Further, there can be no
assurance that such insurance, if obtained, will be adequate to cover potential
product liability claims, or that a loss of insurance coverage or the assertion
of a product liability claim or claims would not materially adversely affect our
business, financial condition and results of operations.
5
<PAGE>
We depend upon a single third party manufacturer and there is risk that if this
supplier becomes unavailable for any reason we will have no product to sell.
We depend significantly upon a single third party manufacturer to make
our products. We do not have a second source. If our single supplier is not able
to manufacture for us for any reason, we will have no products to sell.
Accordingly, no assurance can be given that manufacturing capacity will continue
to be available to us, on commercially reasonable terms or otherwise. Inability
to obtain manufacturing capacity will have a material adverse effect on our
business, financial condition and results of operation.
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. Any statement in
this prospectus and in the documents incorporated by reference into this
prospectus that is not a statement of an historical fact constitutes a
"forward-looking statement". Further, when we use the words "may", "expect",
"anticipate", "plan", "believe", "seek", "estimate", "internal", and similar
words, we intend to identify statements and expressions that may be
forward-looking statements. We believe it is important to communicate certain of
our expectations to our investors. Forward-looking statements are not guarantees
of future performance. They involve risks, uncertainties and assumptions that
could cause WaveRider's future results to differ materially from those expressed
in any forward-looking statements. Many factors are beyond our ability to
control or predict. You are accordingly cautioned not to place undue reliance on
such forward-looking statements. We have no obligation or intent to update
publicly any forward-looking statements whether in response to new information,
future events or otherwise. Important factors that may cause our actual results
to differ from such forward-looking statements include, but are not limited to,
the risk factors discussed below. Before you invest in our common stock, you
should be aware that the occurrence of any of the events described under "Risk
Factors" below or elsewhere in this prospectus could have a material adverse
effect on our business, financial condition and results of operation. In such a
case, the trading price of our common stock could decline and you could lose all
or part of your investment.
6
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a registration statement on Form S-3 which
WaveRider filed with the Securities and Exchange Commission, or the SEC, under
the Securities Act of 1933. This prospectus omits certain information contained
in the registration statement and the exhibits to the registration statements.
Reference is made to the registration statement and the exhibits to the
registration statement for further information with respect to WaveRider and the
shares offered under this prospectus. You may read and copy the registration
statement at the SEC's public reference room at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington D.C. 20549, and at the regional offices of the
SEC located at Seven World Trade Center, 13th Floor, New York, New York 10048
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying costs. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference rooms. WaveRider files certain documents
with the SEC electronically and these documents may be inspected and copied at
the SEC's Web site at http://www.sec.gov. WaveRider is a reporting company under
the Securities Exchange Act of 1934, and consequently, files reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms appears above.
The SEC allows us to "incorporate by reference" the information we file
with them. Incorporation by reference means that we can disclose important
information to you by referring you to the information we filed with the SEC.
The information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and supersede
this information.
We incorporate by reference the information listed below and any future
information we file with the SEC pursuant to sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act of 1934.
(a) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended September 30, 1999;
(b) WaveRider's Registration Statement on Form S-3, filed with the SEC on August
27, 1999 and declared effective by the SEC on October 4, 1999;
(c) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended June 30, 1999;
(d) WaveRider's amendment to its quarterly report, filed with the SEC on Form
10-Q/A, for the fiscal quarter ended June 30, 1999;
(e) WaveRider's Registration Statement on Form S-3, filed with the SEC on July
14, 1999 and declared effective by the SEC on August 27, 1999;
(f) WaveRider's periodic report, filed with the SEC on Form 8-K, on June 30,
1999;
7
<PAGE>
(g) WaveRider's quarterly report, filed with the SEC on Form 10-Q, for the
fiscal quarter ended March 31, 1999;
(h) WaveRider's Registration Statement on Form S-3, filed with the SEC on April
27, 1999 and declared effective by the SEC on April 29, 1999;
WaveRider's annual report, filed with the SEC on Form 10-KSB, for the fiscal
year ended December 31, 1998;
(j) WaveRider's amendment to its annual report, filed with the SEC on Form
10-KSB/A, for the fiscal year ended December 31, 1998; and
The description of WaveRider's common stock contained in the registration
statement on Form 8-A filed with the SEC on March 18, 1995 under section 12
of the Exchange Act, including all amendments and reports subsequently
filed for the purpose of updating such description.
You may request and receive, at no cost, copies of these filings by
writing or telephoning us at the following address:
T. Scott Worthington
Waverider Communications Inc.
255 Consumers Road, Suite 500
Toronto, Ontario Canada M2J 1R4
Telephone No.: (416) 502-3200; Facsimile No.: (416) 502-2968
E-mail Address: [email protected]
8
<PAGE>
USE OF PROCEEDS
We estimate the net proceeds from the sale of the 7,407,407 shares of
common stock offered by us will be $9,100,000, after deducting the estimated
agency fees and offering expenses, but prior to the exercise of any of the
attached warrants or broker warrants.
WaveRider will not receive any portion of the proceeds from the sale of
shares by the selling stockholders pursuant to this prospectus but will receive
up to $380,380 on the exercise of the warrants.
We intend to use $1,975,000 of the net proceeds of this offering to
repay bank and loan indebtedness. We expect to use the remainder of the net
proceeds general corporate purposes, including working capital and expansion of
sales and marketing and research and development activities and for possible
strategic acquisitions.
The amounts actually expended for such working capital purposes may
vary significantly and will depend on a number of factors, including the amount
of our future revenues and the other factors described under "Risk Factors."
Accordingly, our management will retain broad discretion in the allocation of
the net proceeds of this offering. Pending these uses, we intend to invest the
proceeds in short-term, investment-grade, interest-bearing investments.
DIVIDEND POLICY
To date, WaveRider has not paid dividends on any shares of our common
stock and we do not plan to pay any dividends on our common stock in the
foreseeable future. The decision to pay dividends on the common stock in the
future is up to WaveRider's Board of Directors. Such decision to pay dividends
depends upon, among other things, our earnings, our capital requirements and our
financial condition. Although dividends are not limited currently by any
agreements, it is anticipated that future agreements, if any, with institutional
lenders or others may also limit our ability to pay dividends on the common
stock.
SELLING STOCKHOLDERS
Warrant Holders
Of the shares of common stock offered by this prospectus, 180,000
shares are being registered and may be offered for sale from time to time during
the period the effectiveness of the registration statement of which this
prospectus is part, for the account of AMRO International, S.A. On October 18th,
1999, WaveRider issued 180,000 common share purchase warrants to AMRO
International, S.A. in conjunction with a loan agreement between WaveRider and
AMRO . The warrants are exercisable for up to 5 years at an exercise price of
$1.01 per share.
9
<PAGE>
Of the shares of common stock offered by this prospectus, 200,000
shares are being registered and may be offered for sale from time to time during
the period the effectiveness of the registration statement of which this
prospectus is part, for the account of Radyr Group Investments. On October 18th,
1999, WaveRider issued 200,000 common share purchase warrants to Radyr Group
Investment in conjunction with a Common Stock Purchase Agreement between
WaveRider and Radyr. The warrants are exercisable for up to 5 years at an
exercise price of $1.01 per share.
Table Of Holdings
Based on the information supplied to WaveRider by each selling stockholder, the
following table sets forth, as of December 8, 1999, certain information
regarding the beneficial ownership of each selling Stockholder and number of
shares owned by each selling stockholder. The table assumes the exercise of all
warrants by the selling stockholders.
The beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities.
Except as indicated, each person possesses sole voting and investment power with
respect to all of the shares of common stock owned by such person, subject to
community property laws where applicable. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days are deemed outstanding. Such shares,
however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other person.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Owned Beneficially Owned
Prior to Offering Number After Offering
--------------------------- of Shares -----------------------
Name and Address Number Percent Offered Number Percent
- ---------------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
AMRO International, S.A. (1) 4,180,000 8.18 180,000 4,000,000 7.83
Radyr Investment Group 200,000 3.91 200,000 0 0
</TABLE>
(1) The number of shares beneficially owned includes 4,000,000 shares pledged as
security for the repayment of the loan made by AMRO International, S.A. to
WaveRider. Upon repayment of all liabilities under the loan arrangement the
shares will be returned to WaveRider and cancelled.
PLAN OF DISTRIBUTION
Common stock and warrants may be acquired by the underwriters for their
own accounts and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Any public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time. The names of the underwriters and the terms of the
transaction will be set forth in a prospectus supplement.
If dealers are used in an offering of the common stock and warrants, we
will sell the common stock and warrants to the dealers as principals. The
dealers then may resell such common stock and warrants to the public at varying
prices which they determine at the time of resale. The names of the dealers and
the terms of the transaction will be set forth in a prospectus supplement.
10
<PAGE>
If agents are used in an offering of the common stock and warrants, the
names of the agents and the terms of the agency will be set forth in a
prospectus supplement. Unless otherwise indicated in a prospectus supplement,
the agents will act on a best-efforts basis for the period of their appointment.
Dealers and agents named in a prospectus supplement may be deemed to be
underwriters (within the meaning of the Securities Act of 1933) of the common
stock described therein. Underwriters, dealers and agents, may be entitled to
indemnification by WaveRider against certain liabilities (including liabilities
under the Securities Act of 1933) under underwriting or other agreements. The
terms of any indemnification provisions will be set forth in a prospectus
supplement.
We may solicit offers to purchase the common stock and warrants from,
and sell the common stock and warrants directly to, institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act of 1933, with respect to any resales of the common stock and warrants. The
terms of any offer will be set forth in a prospectus supplement.
Certain underwriters, dealers or agents and their associates may engage
in transactions with, and perform services for, WaveRider in the ordinary course
of business, including refinancing of our indebtedness.
If so indicated in a prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by
institutional investors to purchase the common stock and warrants pursuant to
contracts providing for payment and delivery on a future date. We may enter into
agreements with commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutional investors. The obligations of any institutional investor will be
subject to the condition that its purchase of the common stock and warrants will
not be illegal, at the time of delivery. The underwriters and other agents will
not be responsible for the validity or performance of agreements.
To facilitate an offering of a series of the common stock and warrants,
certain persons participating in the offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the common stock and
warrants. This may include over-allotments of the common stock and warrants.
Over-allotments involve the sale by persons participating in the offering of
more common stock and warrants than we have sold to them. In such circumstances,
these persons would cover over-allotments by purchasing the Common Stock in the
open market or by exercising their over-allotment options. In addition, such
persons may stabilize or maintain the price of the common stock by bidding for
or purchasing the Common Stock in the open market or by imposing penalty bids,
whereby selling concessions allowed to dealers participating in any such
offering may be reclaimed if the common stock they sell is repurchased in
connection with stabilization transactions. The effect of these transactions may
be to stabilize or maintain the market price of the common stock at a level
above that which might otherwise prevail in the open market. These transactions,
if commenced, may discontinue at any time.
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<PAGE>
The shares of common stock offered by this prospectus may be sold from
time to time by the selling stockholders, or by pledgees, donees, transferees or
other successors in interest. The selling stockholders will act independently of
WaveRider in making decisions with respect to the timing, manner and size of
each sale.
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
WaveRider's amended and restated Articles of Incorporation and By-Laws
provide that WaveRider shall indemnify its directors and officers, to the
fullest extent permitted under Nevada law, including in circumstances in which
indemnification is otherwise discretionary under Nevada law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of WaveRider,
pursuant to the foregoing provisions, or otherwise, WaveRider has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable.
LEGAL MATTERS
Foley, Hoag & Eliot LLP, of One Post Office Square, Boston,
Massachusetts 02109-2170 will issue an opinion, for WaveRider and the selling
stockholders, about the legality and validity of the shares.
EXPERTS
The financial statements as at December 31, 1998 and for the year then
ended incorporated in this registration by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1998 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of the said firm as experts in auditing and accounting.
The financial statements as at December 31, 1997 and for the year then
ended incorporated in this registration by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1998 have been so incorporated in
reliance on the report of Johnson, Holscher & Company, P.C., independent public
accountants, given on the authority of said firm as experts in auditing and
accounting.
12
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection
with the sale of the shares being registered hereby:
SEC registration fee $ 5,639
Printing and engraving $ 500
Accountants' fees and expenses $ 20,000
Legal fees $ 20,000
Miscellaneous $ 3,861
--------
Total $50,000
Item 15. Indemnification of Directors and Officers
Article VI of WaveRider's By-Laws provides that: "Every Director,
officer, employee and agent of the Company, and every person serving at the
Company's request as a director, officer (or in a position functionally
equivalent to that of officer or director), employee or agent of another
corporation, partnership, joint venture, trust or other entity, shall be
indemnified to the extent and in the manner provided by the Company's Charter,
as it may be amended, and in the absence of any such provision therein, in
accordance with Nevada law."
WaveRider's Charter contains no special provisions regarding the
indemnification of directors and officers beyond those in accordance with Nevada
law.
Section 78.7502 of Nevada General Corporation Law ("Nevada Corporation
Law") provides, that:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
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2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner in which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstance of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Section 78.751 of Nevada Corporation Law provides, that: Any
discretionary indemnification under Section 78.7502, unless ordered by a court
or advanced pursuant to subsection 2, may be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
The indemnification and advancement of expenses authorized or ordered
by a court pursuant to this section:
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(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to Section 78.7502 or for
the advancement of expenses made pursuant to subsection 2, may not be made to or
on behalf of any director or officer if a final adjudication establishes that
his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
In accordance with the provisions of Section 78.752 of Nevada
Corporation Law, WaveRider purchased and maintains insurance coverage on certain
liabilities of its directors and officers.
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Item 16. Exhibits
Exhibit No. Description
3.1 Articles of Incorporation of WaveRider, incorporated by reference to
Exhibit 3.1 registration statement on Form S-18, File no. 33-25889-LA.
3.2 Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the
annual report on Form 10-KSB for the year ended December 31, 1996.
3.3 Certificate of Amendment to the Articles of Incorporation of the Company
filed with the Nevada Secretary of State on October 8th, 1993,
incorporated by reference to Exhibit 3.3 to the quarterly report on Form
10-QSB for the period ended September 30th, 1994.
3.4 Certificate of Amendment to the Articles of Incorporation of the Company
filed with the Nevada Secretary of State on October 25th, 1993,
incorporated by reference to Exhibit 2(d) to the registration statement on
Form 8-A, File No. 0-25680.
3.5 Certificate of Amendment to the Articles of Incorporation of WaveRider
filed with the Nevada Secretary of State on March 25th, 1995, incorporated
by reference to Exhibit 2(e) to registration statement on Form 8-A, File
no. 0-25680.
3.6 Certificate of Amendment to the Articles of Incorporation of the Company,
designating the Series A Voting Convertible Preferred Stock, filed with
the Nevada Secretary of State on March 24th, 1997, incorporated by
reference to Exhibit 3.6 on Form 10KSB for the year ended December 31,
1996.
3.7 Certificate of Amendment to the Articles of Incorporation of the Company
designating the Series B Voting Convertible Preferred Stock, filed with
the Nevada Secretary of State on May 16, 1997.
3.8 Certificate of Amendment to the Memorandum of WaveRider changing the name
to WaveRider Communications Inc., filed with the Nevada Secretary of State
on May 27, 1997.
4.1 Specimen common stock certificate, incorporated by reference to Exhibit
4.1 to registration statement on Form S-18, File no. 33-25889-LA.
4.2 Specimen Class A Common Stock Purchase Warrant Certificate, incorporated
by reference to Exhibit 4.2 on Form 10KSB for the year ended December 31,
1996.
4.3 Specimen Class B Common Stock Purchase Warrant Certificate, incorporated
by reference to Exhibit 4.3 on Form 10KSB for the year ended December 31,
1996.
4.4 Specimen Class C Common Stock Purchase Warrant Certificate, incorporated
by reference to Exhibit 4.4 on Form 10KSB for the year ended December 31,
1996.
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4.5 Specimen Class D Common Stock Purchase Warrant Certificate, incorporated
by reference to Exhibit 4.5 on Form 10KSB for the year ended December 31,
1996.
4.6 Warrant Terms dated February 10th, 1997, relating to the Class A, Class B,
Class C and Class D, Common Stock Purchase Warrants, incorporated by
reference to Exhibit 4.6 on Form 10KSB for the year ended December 31,
1996.
4.7 Warrant Terms dated April 15, 1998, relating to the Class E Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.7 on Form 10KSB
for the year ended December 31, 1998.
4.8 Warrant Terms dated June 11, 1998, relating to the Class F Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.8 on Form 10KSB
for the year ended December 31, 1998.
4.9 Warrant Terms dated December 15, 1998, relating to the Class G Common
Stock Purchase Warrants, incorporated by reference to Exhibit 4.9 on Form
10KSB for the year ended December 31, 1998.
4.10 Warrant Terms dated December 29, 1998, relating to the Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.10 on Form 10KSB
for the year ended December 31, 1998.
4.11 Warrant Terms dated June 30, 1999, relating to the Class H Common Stock
Purchase Warrants, incorporated by reference to Exhibit 4.11 on Form S-3,
File No. 333-82855.
4.12 Warrant Terms dated October 18, 1999, relating to the Common Stock
Purchase Warrants, incorporated by reference to Exhibit 10.1 and 10.2 in
Form 10-Q for the quarter ended September 30, 1999.
4.13 Specimen Common Stock Purchase Warrant Certificate.
4.14 Specimen Underwriters' Warrant Certificate.
5.1 Opinion of Foley, Hoag & Eliot LLP.
10.1 Agreement dated February 2nd, 1997, between Ray Hoag and WaveRider,
incorporated by reference to Exhibit 10.2 on Form 10KSB for the year ended
December 31, 1996.
10.2 Agreement dated February 2nd, 1997, between C. Jeremy Renton and
WaveRider, incorporated by reference to Exhibit 10.21 on Form 10KSB for
the year ended December 31, 1996.
10.3 Stock Option Agreement dated January 22nd, 1997 between WaveRider and
Charlie Rodriguez, incorporated by reference to Exhibit 10.22 on Form
10KSB for the year ended December 31, 1996.
10.4 Stock Option Agreement dated January 22nd, 1997 between WaveRider and C.
Jeremy Renton, incorporated by reference to Exhibit 10.23 on Form 10KSB
for the year ended December 31, 1996.
10.5 Stock Option Agreement dated January 22nd, 1997, between WaveRider and Ray
Hoag, incorporated by reference to Exhibit 10.24 on Form 10KSB for the
year ended December 31, 1996.
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10.6 Share Exchange Agreement executed the 13th day of May, 1997 between
WaveRider and the shareholders of Major Wireless Communications Inc.,
("Major Wireless"), with respect to the purchase by the Company of all the
issued and outstanding shares in the capital stock of Major Wireless,
incorporated by reference to Exhibit 2.1 in Form 8-K filed May 29, 1997.
10.7 Agreement supplemental to the Share Exchange Agreement executed the 13th
day of May, 1997 (see 10.6 supra) incorporated by reference to Exhibit
10.1 in Form 8-K filed May 29, 1997.
10.8 Employee Stock Compensation (1997) Plan incorporated by reference to
Exhibit 99 in Form S-8 filed August 29th, 1997.
10.9 Employee Stock Option (1997) Plan incorporated by reference to Exhibit 99
in Form S-8 filed August 29th, 1997.
10.10 Employment Agreement between WaveRider and D. Bruce Sinclair dated
November 18, 1997 incorporated as Exhibit 10.10 to WaveRider's annual
report on Form 10-KSB, for the year ended December 31, 1997.
10.11 Convertible Debenture Agreement between WaveRider and International
Advisory Services Ltd. and Wyndel Consulting Ltd. Dated December 15, 1998,
incorporated by reference to Exhibit 10.11 of Form S-3, File No.
333-70821.
10.12 Letter of termination of the Convertible Debenture Agreement, dated
January 8, 1999, incorporated by reference to Exhibit 10.11 of Form S-3,
File No. 333-70821.
10.13 Common Stock Purchase Agreement between WaveRider and Sovereign Partners
LP and Canadian Advantage Limited Partnership, dated December 31, 1998,
including the exhibits to such agreement, incorporated by reference to
Exhibit 10.13 on Form S-3, File No. 333-70821.
10.14 Amendment to the Common Stock Purchase Agreement between WaveRider and
Sovereign Partners LP and Canadian Advantage Limited Partnership, dated
June 14, 1999, incorporated by reference to Exhibit 10.14 on Form S-3,
File No. 333-82855.
10.15 Merger Agreement between WaveRider Communications Inc and TTI Merger Inc
and Transformation Techniques, Inc. and Peter Bonk, incorporated by
reference to Exhibit 10.1 in Form 8-K filed June 30, 1999
10.16 Employment agreement between Mr. Peter Bonk and WaveRider Communications
(USA) Inc., dated June 11, 1999, incorporated by reference to Exhibit 10.2
in Form 8-K filed June 30, 1999.
10.17 Loan Agreement between WaveRider Communications Inc. and AMRO
International, S.A. dated October 15, 1999, incorporated by reference to
Exhibit 10.1 in Form 10-Q for the quarter ended September 30, 1999.
10.18 Common Stock Purchase Agreement between WaveRider Communications Inc. and
Radyr Group Investments dated October 18, 1999, incorporated by reference
to Exhibit 10.2 in Form 10-Q for the quarter ended September 30, 1999.
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23.2 Consent of Johnson, Holscher & Company P.C., independent auditors.
23.3 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.4 Consent of Foley, Hoag & Eliot LLP (included in last sentence of Exhibit
5.1).
24.1 Power of Attorney (contained in the signature page).
Item 17. Undertakings
WaveRider hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(2) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(3) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(4) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(5) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(6) To remove from the registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act, and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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(8) For determining any liability under the Securities Act, to treat
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the issuer under Rule 424(b)(1), or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.
(9) For determining any liability under the Securities Act, to treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements of filing on Form S-3 and authorized this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, on
December 9, 1999.
WAVERIDER COMMUNICATIONS INC.
By: /s/ D. Bruce Sinclair
------------------------------------------------
D. Bruce Sinclair, President and Chief Executive
Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 9, 1999.
Signature Title Date
---------- ----- ----
/s/ D. Bruce Sinclair President, Chief Executive Officer December 9, 1999
- --------------------- (Principal Executive Officer)
D. Bruce Sinclair and Director
/s/ Cameron Mingay Secretary/Director December 9, 1999
- ---------------------
Cameron A. Mingay
/s/ Gerry Chaselet Director December 9, 1999
- ---------------------
Gerry Chastelet
/s/ John Curry Director December 9, 1999
- ---------------------
John Curry
/s/ Guthrie Stewart Director December 9, 1999
- ---------------------
Guthrie Stewart
/s/ Dennis R. Wing Director December 9, 1999
- ---------------------
Dennis R. Wing
II-8
Exhibit 4.13
STOCK PURCHASE WARRANT
To Purchase ______________ Shares of Common Stock of
WaveRider Communications Inc.
THIS CERTIFIES that, for value received, __________________ (the
"Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after
December ___, 1999 (the "Initial Exercise Date") and on or prior to the close of
business on December ___, 2001 (the "Termination Date") but not thereafter, to
subscribe for and purchase from WaveRider Communications Inc., a corporation
incorporated in Nevada (the "Company"), up to ___________________ (__________)
shares (the "Warrant Shares") of Common Stock, $0.001 par value, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $2.00. The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein.
1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on or after
the Initial Exercise Date, and before the close of business on the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
holder hereof at the address of such holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States or Canadian bank,
the holder of this Warrant shall be entitled to receive a certificate for the
number of shares of Common Stock so purchased. Certificates for shares purchased
hereunder shall be delivered to the holder hereof within three (3) Trading Days
after the date on which this Warrant shall have been exercised as aforesaid.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required
to be paid by Holder, if any, pursuant to Section 5 prior to the issuance of
such shares, have been paid.
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(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its shareholder books
or records in any manner which prevents the timely exercise of this Warrant.
7. Transfer, Division and Combination. (a) Subject to compliance with
any applicable securities laws, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of shares of Common Stock without having a new
Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
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(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.
8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the holder of this Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which he would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
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(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 11.
For purposes of this Section 11, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 11 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such notice, in the absence
of manifest error, shall be conclusive evidence of the correctness of such
adjustment.
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14. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 16(d).
15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
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The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction. This Warrant shall be binding upon any successors or
assigns of the Company. This Warrant shall constitute a contract under the laws
of Ontario, Canada, without regard to its conflict of law, principles or rules,
and be subject to arbitration pursuant to the terms set forth in the Purchase
Agreement.
(b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company fails to comply with any provision of this Warrant, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
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(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's negligence,
bad faith or willful misconduct in its capacity as a stockholder or
warrantholder of the Company.
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated:
WaveRider Communications Inc.
By:________________________________
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NOTICE OF EXERCISE
To: WaveRider Communications Inc.
(1) The undersigned hereby elects to purchase ________ shares of Common Stock
(the "Common Stock"), of WaveRider Communications Inc. pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
Dated:
------------------------------
Signature
<PAGE>
ASSIGNMENT FORM
(To assign the foregoing warrant,
execute this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder's Signature:_____________________________
Holder's Address:_______________________________
_______________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
EXHIBIT 4.14
UNDERWRITERS' WARRANT
To Purchase ______________ Shares of Common Stock
and _______________ Common Stock Purchase Warrants of
WaveRider Communications Inc.
THIS CERTIFIES that, for value received, __________________ (the
"Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after
December ___, 1999 (the "Initial Exercise Date") and on or prior to the close of
business on December ___, 2001 (the "Termination Date") but not thereafter, to
subscribe for and purchase from WaveRider Communications Inc., a corporation
incorporated in Nevada (the "Company"), up to ___________________ (__________)
shares (the "Warrant Shares") of Common Stock, $0.001 par value, of the Company
(the "Common Stock") and _______________ (________) common stock purchase
warrants (the "Purchase Warrant"), (together "Units"). Each Unit shall consist
of two share of common stock and one half purchase warrant. The purchase price
of one Unit (the "Exercise Price") under this Warrant shall be $1.35. The
Exercise Price and the number of Units for which the Warrant is exercisable
shall be subject to adjustment as provided herein.
1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on or after
the Initial Exercise Date, and before the close of business on the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
holder hereof at the address of such holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States or Canadian bank,
the holder of this Warrant shall be entitled to receive a certificate for the
number of shares of Common Stock and of Purchase Warrants so purchased.
Certificates for shares and Purchase Warrants purchased hereunder shall be
delivered to the holder hereof within three (3) Trading Days after the date on
which this Warrant shall have been exercised as aforesaid. This Warrant shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price and all taxes required to be paid by Holder,
if any, pursuant to Section 5 prior to the issuance of such shares, have been
paid.
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(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificates representing Warrant Shares
and Purchase Warrants, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Units called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or purchase
warrants or scrip representing fractional shares or purchase warrants shall be
issued upon the exercise of this Warrant. As to any fraction of a share or a
Purchase Warrant which Holder would otherwise be entitled to purchase upon such
exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock and Purchase Warrants upon the exercise of this Warrant shall be
made without charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the holder of this Warrant or in such name or names as may
be directed by the holder of this Warrant; provided, however, that in the event
certificates for shares of Common Stock and Purchase Warrants are to be issued
in a name other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the holder hereof; and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.
6. Closing of Books. The Company will not close its shareholder books
or records in any manner which prevents the timely exercise of this Warrant.
7. Transfer, Division and Combination. (a) Subject to compliance with
any applicable securities laws, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of Units without having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
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<PAGE>
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.
8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment. Anything in section 11 to the contrary notwithstanding, no
anti-dilution adjustments shall be made to the Purchase Warrants prior to their
issuance upon exercise or partial exercise of this Warrant.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the holder of this Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which he would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
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<PAGE>
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 11.
For purposes of this Section 11, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 11 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such notice, in the absence
of manifest error, shall be conclusive evidence of the correctness of such
adjustment.
4
<PAGE>
14. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 16(d).
15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.
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Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction. This Warrant shall be binding upon any successors or
assigns of the Company. This Warrant shall constitute a contract under the laws
of Ontario, Canada, without regard to its conflict of law, principles or rules,
and be subject to arbitration pursuant to the terms set forth in the Purchase
Agreement.
(b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company fails to comply with any provision of this Warrant, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
6
<PAGE>
(g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's negligence,
bad faith or willful misconduct in its capacity as a stockholder or
warrantholder of the Company.
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated:
WaveRider Communications Inc.
By: _______________________________
7
<PAGE>
NOTICE OF EXERCISE
To: WaveRider Communications Inc.
(1) The undersigned hereby elects to purchase ________ Units of Common
Stock (the "Common Stock"), of WaveRider Communications Inc. pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Please issue the certificates representing said Units of Common
Stock in the name of the undersigned or in such other name as is specified
below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
Dated:
------------------------------
Signature
<PAGE>
ASSIGNMENT FORM
(To assign the foregoing warrant,
execute this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder's Signature:_____________________________
Holder's Address:_______________________________
_______________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
EXHIBIT 5.1
FOLEY, HOAG & ELIOT LLP
ONE OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109-2170
---------
TELEPHONE 617-832-1000 1747 PENNSYLVANIA AVE, N.W.
FACSIMILE 617-832-7000 SUITE 1200
www.fhe.com WASHINGTON, D.C. 20006
TEL: 202-223-1200
FAX: 202-785-6687
December 9, 1999
WaveRider Communications Inc.
255 Consumers Road, Suite 500
Toronto, Ontario Canada
M2J 1R4
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-3 filed on
December 9, 1999 by WaveRider Communications Inc., a Nevada corporation (the
"Company"), with the Securities and Exchange Commission under the Securities Act
of 1933 (the "S-3 Registration Statement"). The S-3 Registration Statement
relates to the registration of a total of up to 12,157,777 shares of the
Company's Common Stock, $0.001 par value per share ("Shares"), 3,925,925
warrants and 444,444 underwriters' warrants.
In arriving at the opinions expressed below, we have examined and
relied on the following documents: (a) the Articles of incorporation of the
Company, as amended; (b) the Amended and Restated By-Laws of the Company; and
(c) the records of meetings and consents of the Board of Directors and
stockholders of the Company provided to us by the Company. In addition, we have
examined and relied on the originals or copies certified or otherwise identified
to our satisfaction of all such corporate records of the Company and such other
instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have further assumed that a sufficient number of duly
authorized and unissued shares of Common Stock will be available for issuance at
the time the Common Stock is sold, and the warrants and underwriters' warrants
are exercised, in accordance with the terms thereof; and that the consideration
received by WaveRider in respect of each Share will be no less than its par
value.
<PAGE>
December 9, 1999
Page 2
Based upon the foregoing, it is our opinion that:
1. The Company has taken all necessary corporate action required to
authorize the issuance and sale of the Shares, warrants and underwriters'
warrants; and
2. The Shares will be, upon issuance, legally issued and fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
S-3 Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By: /s/ Dave Broadwin
--------------------
A Partner
***********
Exhibit 23.1
Johnson, Holscher & Company, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Waverider Communications Inc. (the "Company"), to register
12,157,777 shares of common stock, 3,925,925 warrants and 444,444 underwriters'
warrants, of our report dated March 20, 1998 and March 22, 1999, Note 4. Prior
Period Adjustment, on our audits of the consolidated financial statements of the
Company as of December 31, 1997 and 1996.
We also consent to the reference to our firm under the caption "Experts".
Johnson, Holscher & Company, P.C.
December 9, 1999
Exhibit 23.2
PricewaterhouseCoopers
December 9, 1999
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus dated
December 9, 1999 constituting part of the Registration Statement on Form S-3 of
WaveRider Communications Inc. of our report dated February 5, 1999 appearing on
page 18 of WaveRider Communications Inc.'s Annual Report on Form 10-KSB for the
year ended December 31, 1998.
We also consent to the references to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a Canadian member firm of PricewaterhouseCoopers
International Limited, an English company limited by guarantee.
