UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TEXAS 4812 74-3002154 -------------------------------------------------------------------------------- (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) |
106 East Sixth Street, Suite 645, Austin, TX 78701
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(Address and telephone number of principal executive offices)
106 East Sixth Street, Suite 645, Austin, TX 78701
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(Address of principal place of business or intended principal place of business)
Bill G. Williams, 106 East Sixth Street, Suite 645, Austin, TX 78701 (512) 583-4500
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(Name, address and telephone number of agent for service)
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Approximate date of proposed sale to the public
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(b) 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 check the following box.[ ]
CALCULATION OF REGISTRATION FEE
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Type of each Dollar Proposed Proposed Amount of
Class of securities amount Maximum offering Maximum aggregate Registration fee
To be registered To be Price per unit Offering price
registered
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Common Stock $149,063* $.01* $149,063* $38.00
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* Estimated solely for the purpose of calculating the registration fee.
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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.
CROSS REFERENCE SHEET
ITEM NUMBER PAGE IN PROSPECTUS
ITEM 1. FRONT OF REGISTRATION STATEMENT AND OUTSIDE FRONT COVER OF PROSPECTUS FRONT, INSIDE COVER
ITEM 2. INSIDE FRONT AND OUTSIDE BACK COVER PAGES OF PROSPECTUS INSIDE COVER
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS 2
ITEM 4. USE OF PROCEEDS N/A
ITEM 5. DETERMINATION OF OFFERING PRICE N/A
ITEM 6. DILUTION N/A
ITEM 7. SELLING SECURITY HOLDERS 1,5
ITEM 8. PLAN OF DISTRIBUTION 5
ITEM 9. LEGAL PROCEEDINGS N/A
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 6
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 8
ITEM 12. DESCRIPTION OF SECURITIES 10
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL 10
ITEM 14. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES N/A
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS 6
ITEM 16. DESCRIPTION OF BUSINESS 3
ITEM 17. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 3
ITEM 18. DESCRIPTION OF PROPERTY 5
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 9
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 5
ITEM 21. EXECUTIVE COMPENSATION 7
ITEM 22. FINANCIAL STATEMENTS F-1
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE N/A
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DIRECT WIRELESS COMMUNICATIONS, INC.
1,490,633 SHARES OF COMMON STOCK
NO PAR VALUE PER SHARE
THE DATE OF THIS PROSPECTUS IS _______, 2001.
UNTIL (_________ 2001) ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
Direct Wireless Communications, Inc. will furnish to its shareholders annual reports containing audited financial statements and quarterly reports containing unaudited financial statements.
TABLE OF CONTENTS
Page
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Summary Information 2
Risk Factors 2
Proposed Business 3
Properties 5
Plan of Distribution 5
Market for Common Equity and Related Stockholder Matters 5
Directors, Executive Officers, Promoters and Control Persons 6
Executive Compensation 7
Security Ownership of Certain Beneficial Owners and Management 8
Certain Relationships and Related Transactions 9
Description of Securities 10
Interest of Names Experts and Counsel 10
Available Information 10
Index to Financial Statements F-1
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DIRECT WIRELESS COMMUNICATIONS, INC.
1,490,633 SHARES OF COMMON STOCK
NO PAR VALUE PER SHARE
This prospectus relates to 1,490,633 shares of common stock of Direct Wireless
Communications, Inc. that Direct Wireless Corporation is distributing as a stock
dividend to its shareholders of record on May 15, 2001. Recipients of the common
stock will not be required to make any payment for it. SEE "PLAN OF
DISTRIBUTION."
Based on advice Direct Wireless Corporation received from its communications industry consultants, Direct Wireless Corporation has determined for business reasons to separate marketing and distributing functions from the business of developing and patenting wireless communications technology. For this reason it organized Direct Wireless Communications, Inc. in April 2001 and has licensed Direct Wireless Communications, Inc. to market and/or sublicense in the United States the wireless communications technology Direct Wireless Corporation has developed and on which it holds the patents. Direct Wireless Communications, Inc. is now a wholly owned subsidiary of Direct Wireless Corporation. It was organized with the minimum capital required under state law and has not yet conducted any business operations. SEE "RISK FACTORS" AND "PROPOSED BUSINESS."
The stock being distributed to shareholders of Direct Wireless Corporation was paid to Direct Wireless Corporation for initial capitalization and in partial payment for the license to market and sublicense Direct Wireless Corporation technology. SEE "PROPOSED BUSINESS" AND "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." After this distribution, Direct Wireless Corporation will not own any equity interest in Direct Wireless Communications, Inc. but will continue to control the marketing function. SEE "PROPOSED BUSINESS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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Per unit Price to Underwriting Proceeds to
Public Discounts Issuer or
And commissions Other persons
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0 0 0 0
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SUMMARY INFORMATION
Direct Wireless Communications, Inc., a Texas corporation, is a development stage company founded on April 6, 2001 to market and/or license a unique, low-cost, high capacity mobile digital wireless communications technology. This technology eliminates the costly cell site infrastructure of traditional cellular and personal communications wireless systems by replacing their functions with a software control program contained entirely in the mobile telephone.
The major features of this technology include:
o Extremely low cost wireless communication modules that can extend coverage to vast rural areas with seamless coverage in diverse topographies.
o Ability to interface quickly and efficiently with existing cellular and personal communication networks as well as with public switched telephone systems for long distance communications.
o Phones that can operate in any part of the globe, even if the basic cellular or personal communication system cannot. Major wireless telecommunications improvement not provided by any other system in existence or planned.
Direct Wireless Communications, Inc. has been granted the license by Direct Wireless Corporation, the company that has developed and holds the patents on the technology. Direct Wireless Communications, Inc. will market and/or sublicense the technology in the United States. However, it has not yet begun any operations.
The company's address is 106 E. 6th St., Suite 645, Austin, TX 78701 and its telephone number is 512-583-4500.
RISK FACTORS
RISKS ASSOCIATED WITH THE TECHNOLOGY
Direct Wireless Communications, Inc. was organized in April 2001 with minimum capitalization. It remains in the development stage. It has no operating history upon which an evaluation of its prospects can be made. Company prospects must be considered in light of the risk, uncertainties, expenses, delays and difficulties associated with the establishment of a new business in the evolving telecommunications and wireless industry, as well as those risks encountered in the commercialization of new technology and products or services based upon new technology.
Detailed market system specifications of the Direct Wireless Corporation technology that is being licensed to the company has been successfully completed at Southwest Research Institute, San Antonio, Texas. However, at the present time no working prototype telephone exists that employs the technology.
RISKS ASSOCIATED WITH OPERATIONS OF DIRECT WIRELESS COMMUNICATIONS, INC.
The company's business will be primarily the marketing and/or licensing of the technology to existing service providers within the wireless industry who want to economically extend their service into rural areas. The company may also license this technology to rural utility companies that want to diversify their business by becoming a wireless communication provider. The company may not be successful in finding service providers or utilities that anticipate sufficient demand to justify obtaining a license.
If the company successfully introduces new products to commercial markets, there can be no assurance that those products will continue to find commercial acceptance. Advances in communications technology are rapid and technological development by competitors may render Direct Wireless products obsolete. Competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, resulting in reduced margins, or loss of market share, any of which could harm the business.
Direct Wireless Communications, Inc. must raise the money to pay for the license fee to Direct Wireless Corporation. There is no assurance that it can raise sufficient money to pay this fee. SEE "PROPOSED BUSINESS" AND "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
PROPOSED BUSINESS
Direct Wireless Communications, Inc. has acquired from Direct Wireless Corporation the right to market and sublicense the technology developed by Direct Wireless Corporation. This technology is covered by two patents, No. 5,995,849 issued on November 30, 1999 and No. 6,141,531 issued on October 31, 2000, and patent application No. 800416 filed on June 1, 2000. These patents and the application relate to a wireless communication system using radio frequencies for transmitting and receiving voice and data signals. The technology covered by the patents and application uses an internal network with a multiple internal communication path and an external communication path for linking the internal network to an external communications network.
The internal network consists of telephone handsets that allow for decentralized communication along multiple communication paths. If several handsets are within range, they can communicate directly through signal extenders without the need for a central call switching and delivery center, unlike cellular or other mobile wireless communication systems. If the handsets are out of range, they can communicate through signal extenders and network extenders that relay the call to destination handsets, also eliminating the need for a central call switching and delivery center. The internal network also has the capability of communicating with external communications networks, such as existing public switched telephone systems, satellite communication systems, or emergency radio or paging systems.
Many regions in the United States are too sparsely settled to justify the expense of central call switching and delivery centers required for cellular and other wireless technology. Because the Direct Wireless Corporation technology needs no central switching center it is particularly suited to operate in these remote or isolated areas. The company intends to market the technology in rural areas that have limited cellular service or no wireless services of any kind. The company expects to market and sublicense the technology to existing service providers who desire to extend their service to these sparsely settled areas or to public utility companies that have customers in these areas and desire to provide wireless services to their existing customers. Under this marketing strategy the company does not expect competition from established cellular and/or other service providers, which are primarily located in urban markets.
Direct Wireless Communications, Inc. will not be required to apply for frequency allocations. The technology does not set any requirements for assigned frequencies from the Federal Communications Commission. Direct Wireless Corporation has represented that the handsets may be manufactured to function normally on cellular and other wireless communication frequencies where adequate bandwidths and unoccupied licenses are available, as well as in ranges where no Federal Communications Commission licenses are required. Accordingly the technology may be used by any existing service provider that has existing frequency assignments and wishes to extend the nature of its services.
The technology licensing agreement under which Direct Wireless Communications, Inc. has acquired the rights to market and sublicense the technology provides that Direct Wireless Communications, Inc. shall pay to Direct Wireless Corporation an initial license fee of 1,489,633 shares of its common stock and the sum of ten million dollars. The ten million dollars must be paid in such amounts and at such times over the course of the license agreement as the parties may agree. In addition to the initial license fee, Direct Wireless Communications, Inc. must also pay a royalty in the amount of thirty percent of all royalty fees it receives.
The technology license agreement may be terminated by Direct Wireless Corporation upon the occurrence of any of the following events:
o Direct Wireless Communications, Inc. fails to make timely payments of royalties;
o In the event Direct Wireless Communications, Inc. dissolves, ceases active business operations, liquidates or becomes bankrupt;
o In the event management of Direct Wireless Communications, Inc. changes from its current management.
These provisions of the technology license agreement effectively prevent any hostile takeover of Direct Wireless Communications, Inc. by means of a proxy solicitation, a tender offer or any other device. Direct Wireless Communications, Inc. will remain under control of the management of Direct Wireless Corporation.
The company's only employees at present are its officers and directors, who are also officers and directors of Direct Wireless Corporation. When the company begins its business operations it will be necessary to hire additional personnel. The company does not anticipate any difficulties in hiring appropriate persons.
PROPERTIES
Direct Wireless Communications, Inc. leases approximately 3,300 square feet of office space at 106 E. 6th St., Suite 645, Austin, TX 78701 from Direct Wireless Corporation. The monthly rental is $3,345.77. The company believes that the amount of rent is a fair market price for comparable space and that the facilities are adequate for the foreseeable future. The company does not own any communications equipment.
PLAN OF DISTRIBUTION
Direct Wireless Communications, Inc. has issued 1,489,633 shares of its common stock to Direct Wireless Corporation as partial payment for the licensing of the technology. Direct Wireless Corporation will distribute these shares and 1000 shares obtained for initial capitalization of Direct Wireless Communications, Inc. as a stock dividend to its stockholders of record on May 15, 2001. Each existing Direct Wireless Corporation shareholder shall receive one share for every three shares of Direct Wireless Corporation stock owned on that date, but no fractional shares will be issued. Neither company will pay any fees to any person in connection with the distribution, except for the costs of printing and mailing the prospectus and printing of the stock certificates.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At the present time there is no public trading market for Direct Wireless Communications, Inc. common stock. The Company intends to take all actions necessary to have its stock eligible for quotation on the National Association of Securities Dealers Bulletin Board. Upon the effectiveness of the registration statement of which this prospectus is a part, the 341,633 shares of common stock owned by control persons of the company will become eligible for sales under Rule 144 in one year. SEE "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Upon the completion of the distribution of the stock dividend there will be 265 shareholders of record of the common stock. Since inception the company has never paid any cash dividends on its common stock and it is not anticipated that it will pay dividends in the foreseeable future.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Executive officers and directors of the Company are:
NAME AGE POSITION Bill G. Williams 66 Chief Executive Officer and Chairman of the Board Robert S. Braswell, IV 46 President, Director Jerry W. Petermann 50 Vice President and Chief Technology Officer, Director W. Steven Walker 50 Secretary/Treasurer, Director |
The present directors were appointed in May, 2001 and will serve until their successors are elected at an annual meeting of the shareholders. Thereafter directors will serve a term of one year.
MR. WILLIAMS is Chairman of the Board and CEO of Direct Wireless Corporation. He was previously Chairman of the Board and Chief Executive Officer of Cafe Quick Enterprises, Inc. Cafe Quick is in the vending industry market and uses a unique patented air impingement technology to cook fresh frozen food in a vending machine. Mr. Williams and his management team acquired the technology, developed the prototype and ultimately licensed the technology worldwide. From 1985 to 1988, Mr. Williams was Chairman of the Board and CEO of Ameritron Corporation, a multi-business public holding company. In his capacity as chairman, Mr. Williams was instrumental in acquiring thirty-seven businesses over a period of five years. Prior to his employment with Ameritron Corporation, Mr. Williams was involved in real estate projects and land development. Mr. Williams is co-inventor of the Direct Wireless Communication System.
MR. BRASWELL is President of Direct Wireless Corporation. He was an independent businessman with eighteen years experience in the common carrier freight business, working for Central Freight Lines, Inc. During his tenure Mr. Braswell worked in all aspects of the Company operations. His last position with Central Freight Lines was Director of Data Processing for Shop Maintenance and Inventory Control. He managed the parts, tires and fuel inventories in addition to the Maintenance Reporting System. During this period, Mr. Braswell was a study group chairman and a committee member of the Board of Directors for the American Trucking Association Maintenance Council. Before joining Direct Wireless Corporation, he was engaged in residential subdivision development and home construction. Mr. Braswell graduated from the University of Houston with a Bachelor of Business Administration in Organizational Behavior Management.
MR. PETERMANN is Vice President of Direct Wireless Corporation. Mr. Petermann is co-inventor of the Direct Wireless Communication System and is continuing the development of system features and capabilities. Mr. Petermann has a long career as an engineer and inventor in a variety of disciplines. He has developed several successful concepts and inventions for clients that include the Department of Defense, U.S. Navy, Los Alamos National Laboratories, Housing and Urban Development and the United Nations, among others. He has extensive experience in concept-to-patent management, research and development firms, manufacturers and patent attorneys. Mr. Petermann holds a Bachelor of Applied Science in Telecommunications from the University of Mary Hardin-Baylor.
MR. WALKER is Secretary/Treasurer of Direct Wireless Corporation and acts as principal legal advisor to the Company. Mr. Walker is engaged in the private practice of law with emphasis in commercial and business litigation and corporate finance. He has been a Board Member of several public companies and represents a number of corporations. Mr. Walker received a Bachelor of Arts Degree with Honors from the University of Texas, Austin, Texas, and a Doctor of Jurisprudence Degree from the University of St. Mary's School of Law, San Antonio, Texas.
EXECUTIVE COMPENSATION
At the present time Direct Wireless Communications, Inc. does not have any operations. Even after operations have begun it may be some period of time before revenues are sufficient to pay executive salaries. When the Company has sufficient revenues it intends to pay executive salaries as set forth in the following compensation table.
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NAME SALARY
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Bill G. Williams $100,000
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Robert S. Braswell, IV $70,000
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Jerry W. Petermann $60,000
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W. Steven Walker $42,000
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In addition, Direct Wireless Communications, Inc. will issue 1,000,000 shares of common stock to these officers as follows: Bill G. Williams: 350,000; Robert S. Braswell IV: 300,000; Jerry W. Petermann: 200,000; W. Steven Walker: 150,000. At the present time, there are no other cash or stock bonus, stock option plans, pension plans or similar compensation plans.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Prior to the payment of the stock dividend by Direct Wireless Corporation, that company was the sole stockholder of Direct Wireless Communications, Inc. After payment of the stock dividend, the following persons will be the beneficial owners of 5% or more of the common stock of Direct Wireless Communications, Inc.
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF CLASS
OF BENEFICIAL OWNERSHIP
Shirley Williams 154,920 Direct 10.39%
4800 Ridgeview
Waco, TX 76710
Bill G. Williams 154,920 Indirect (1) 10.39
106 E. 6th Street
Austin, TX 78701
Robert S. Braswell IV 78,879 Direct (2) 5.29
106 E. 6th Street
Austin, TX 78701
Diana Callan Braswell 96,528 Direct and Indirect (3) 6.48
3913 Old Mill Road
Waco, TX 76710
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(1) These are the shares that will be owned of record by Shirley Williams, Mr. Williams' wife.
(2) 1,667 of these shares will be owned by Mr. Braswell and his wife as joint tenants.
(3) Includes 87,444 shares that will be owned as trustee of various trusts. Diana Callan Braswell is Mr. Braswell's mother.
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After the stock dividend is paid, the officers and directors of Direct Wireless Communications, Inc., will own shares of the company's common stock as shown in the following table.
NAME AND POSITION NUMBER OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS Bill G. Williams 154,920 Indirect 10.39% Chairman and CEO 106 E. 6th Street, Suite 645 Austin, TX 78701 Robert S. Braswell IV 78,879 Direct 5.29 President and Director 106 E. 6th Street, Suite 645 Austin, TX 78701 Jerry W. Petermann 61,216 Direct 4.11 Vice President and Director 106 E. 6th Street, Suite 645 Austin, TX 78701 W. Steven Walker 46,648 Direct 3.13 Secretary, Treasurer And Director 800 Airport Freeway Irving, TX 76710 All officers and directors as 341,663 22.92 a group ( four persons) |
Information as to the nature of the security holdings of officers and directors is given in the notes to the preceding table.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Direct Wireless Communications, Inc. was organized by Direct Wireless Corporation on April 6, 2001 and Direct Wireless Corporation can therefore be considered to be a promoter of the Company. On May 15, 2001, Direct Wireless Communications, Inc. entered into an agreement with Direct Wireless Corporation under which it was licensed to market and/or sublicense the Direct Wireless Corporation technology for the United States. As partial payment for the license agreement, Direct Wireless Communications, Inc. issued to Direct Wireless Corporation 1,489,633 shares of its common stock. In addition, the license agreement requires Direct Wireless Communications, Inc. to pay royalties and an aggregate of ten million dollars cash to Direct Wireless Corporation.
DESCRIPTION OF SECURITIES
Direct Wireless Communications, Inc. is authorized to issue ten million shares of common stock, no par value. There are presently outstanding 1,490,633 shares. Holders of the common stock are entitled to one vote per share for the election of directors and on all other matters submitted to a vote of shareholders. They are also entitled to dividends declared by the directors out of funds legally available for payment of dividends. Holders of the common stock do not have any cumulative voting rights or any preemptive or similar rights.
The Transfer Agent for Direct Wireless Communications, Inc. is Nancy Heel, Post Office Box 151599, Austin, Texas 78715-1599; telephone: 512-442-2379.
INTEREST OF NAMED EXPERTS AND COUNSEL
W. Steven Walker, Esq., who has rendered an opinion on the validity of the Company's common stock, is Secretary/Treasurer and General Counsel of the Company.
AVAILABLE INFORMATION
Direct Wireless Communications, Inc. has filed a registration statement with the Securities and Exchange Commission on Form SB-2 under the Securities Act of 1933 with respect to the shares of its common stock being distributed as a stock dividend to the shareholders of Direct Wireless Corporation. This prospectus does not contain all of the information described in that registration statement and the related exhibits. Statements in this prospectus concerning the contents or provisions of contracts or other documents are not necessarily complete, and in each instance the company refers you to the copy of the document on file as an exhibit to the registration statement.
A copy of the registration statement and the related exhibits may be inspected without charge at the Commission's office at 450 Fifth Street, NW, Washington, D.C. 20549 or at the Commission's Regional offices at Northwestern Atrium Center, 500 West Madison Avenue, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of all or any part of the registration statement may be obtained from these offices upon payment of the fees specified by the Commission. Information on the operations of the Commission may be obtained by calling 1-800-SEC-0300.
Direct Wireless Communications, Inc. has filed the registration statement electronically with the Commission. The Commission maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. The address of that website is http://www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report F-2
Balance Sheet at April 30, 2001 F-3
Statement of Income from date of inception
April 6, 2001 to April 30, 2001 F-4
Statement of Cash Flows from date of inception
April 30, 2001 to April 30, 2001 F-5
Notes to Financial Statements F-6
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DARILEK, BUTLER & CO., P.C.
622 Isom Road, Suite 100
San Antonio, Texas 78216
210-979-0055 phone
210-979-0058 fax
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Direct Wireless Communications, Inc.
We have audited the accompanying balance sheet of Direct Wireless Communications, Inc. (a Texas Corporation) as of April 30, 2001 and the related statements of income and cash flows for the period from inception (April 6, 2001) to April 30, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Direct Wireless Communications, Inc. as of April 30, 2001 and the results of its operations and its cash flows for the initial period then ended in conformity with accounting principles generally accepted in the United States of America.
"Darilek, Butler & Co., P.C."
San Antonio, Texas
May 22, 2001
DIRECT WIRELESS COMMUNICATIONS, INC.
Balance Sheet
April 30, 2001
ASSETS:
Current Assets
Accounts Receivable - Stockholder $1,000
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Total Current Assets 1,000
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Total Assets $1,000
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LIABILITIES AND STOCKHOLDER'S EQUITY:
Current Liabilities $ 0
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Total Current Liabilities 0
Stockholder's Equity
Common Stock, No Par Value, 10,000,000 Shares Authorized, 1,000
1,000 Issued and Outstanding
Retained Earnings 0
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Total Stockholder's Equity 1,000
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Total Liabilities and Stockholder's Equity $1,000
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The Accompanying Notes are an Integral Part of These Financial Statements
DIRECT WIRELESS COMMUNICATIONS, INC.
Statement of Income
From the Date of Inception (April 6, 2001) to April 30, 2001
Revenue $ 0
Expenses 0
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Net Income $ 0
Retained Earnings - Beginning of Period 0
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Retained Earnings - End of Period $ 0
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The Accompanying Notes are an Integral Part of These Financial Statements
DIRECT WIRELESS COMMUNICATIONS, INC.
Statement of Cash Flows
From the Date of Inception (April 6, 2001) to April 30, 2001
Cash Flows From Operating Activities $ 0
Cash Flows From Investing Activities 0
Cash Flows From Financing Activities 0
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Net Increase (Decrease) in Cash 0
Cash, at Beginning of Period 0
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Cash, at End of Period $ 0
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The Accompanying Notes are an Integral Part of These Financial Statements
DIRECT WIRELESS COMMUNICATIONS, INC.
Notes to Financial Statements
April 30, 2001
Note A - Summary of Significant Accounting Policies
NATURE OF OPERATIONS
Direct Wireless Communications, Inc. (the Company) is a development stage company that was incorporated on April 6, 2001. On May 15, 2001, the Company entered into a Technology Licensing Agreement with Direct Wireless Corporation (Direct Wireless). Under this agreement, Direct Wireless was granted a license to market and/or sublicense in the United States the wireless telephone communications technology on which Direct Wireless holds the patents. The Company has not yet begun operations. Upon completion of the working telephone prototype telephone employing the technology, the Company intends to market and sublicense the technology primarily to existing service providers who desire to extend their services to sparsely settled areas or to public utilities who have customers in such areas and desire to provide wireless services to them.
ACCOUNTING POLICIES AND BASIS OF ACCOUNTING
The financial statements of the Company are prepared on the accrual basis of accounting. This basis of accounting conforms to generally accepted accounting principles.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions effect the reported amounts on assets and liabilities, disclosure of contingent assets and liabilities, and the reported revenue and expenses. Actual results could differ from those estimates.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02(16) of the Texas Business Corporation Act authorizes a Texas corporation to indemnify any director or officer or former director or officer of the corporation, or any person who may have served at its request as a director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by him in connection with the defense of any action, suit, or proceeding in which he is made a party by reason of being or having been such director or officer, except in relation to matters as to which he shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in performance of duty, but such indemnification shall not be deemed exclusive of any other rights to which such director or officer may be entitled, under any bylaw, agreement, vote of shareholders, or otherwise.
Article 2.02(16) further provides that a Texas corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or who 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 any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of Article 2.02.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee $ 38 Blue Sky fees 100* Postage 275* Printing and engraving 875* Accounting and legal 1500 Electronic filing fee 900* Miscellaneous 100* ------------------ ------ Total 3788* |
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On April 6, 2001, the company was organized by Direct Wireless Corporation and thereafter issued to Direct Wireless Corporation 1000 shares of its common stock in exchange for the initial capitalization of $1000 and became a wholly owned subsidiary of Direct Wireless Corporation. On May 15, 2001 the company issued and sold 1,489,633 shares of its common stock to Direct Wireless Corporation as partial consideration for the grant of a license to the company to market and/or sublicense wireless telephone technology on which Direct Wireless Corporation holds the patents. In both transactions, the company relied on the exemption contained in Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving any public offering.
II-1
ITEM 27. EXHIBITS.
Exhibit 3.1 Articles of Incorporation Exhibit 3.2 By-Laws Exhibit 4.1 Copy of certificate for shares of common stock Exhibit 4.2 Excerpts from By-Laws defining rights of shareholders |
Exhibit 5 Opinion of W. Steven Walker, Esq. as to legality of Direct Wireless Communications, Inc. stock being distributed to stockholders of Direct Wireless Corporation. TO BE FILED BY AMENDMENT.
Exhibit 10.1 Technology License Agreement dated May 15, 2001 between Direct Wireless Corporation and Direct Wireless Communications, Inc.
Exhibit 23.1 Consent of Darilek, Butler & Co., P.C., certified public accountants.
Exhibit 23.2 Consent of W. Steven Walker, Esq. TO BE FILED BY AMENDMENT.
ITEM 28. UNDERTAKINGS.
Registrant undertakes as follows:
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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, the small business issuer 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.
II-2
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Austin, State of Texas on May 31, 2001.
Direct Wireless Communications, Inc.
By: s/Bill G. Williams, Chief Executive Officer -------------------------------------------- (Signatures and Title) |
Bill G. Williams, Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:
Signator Date S/Bill G. Williams May 31, 2001 -------------------------------------------------------------- ------------ Bill G. Williams, Principal Executive Officer S/W. Steven Walker May 31, 2001 -------------------------------------------------------------- ------------ W. Steven Walker, Principal Financial Officer S/Robert S. Braswell, IV May 31, 2001 -------------------------------------------------------------- ------------ Robert S. Braswell, IV, Principal Accounting Officer S/Bill G. Williams May 31, 2001 -------------------------------------------------------------- ------------ Bill G. Williams, Chairman of the Board S/Robert S. Braswell, IV May 31, 2001 -------------------------------------------------------------- ------------ Robert S. Braswell, IV, Director S/Jerry W. Petermann May 31, 2001 -------------------------------------------------------------- ------------ Jerry W. Petermann, Director S/W. Steven Walker May 31, 2001 -------------------------------------------------------------- ------------ W. Steven Walker, Director |
EXHIBITS
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
3.1 Articles of Incorporation E-2
3.2 By-Laws E-4
4.1 Copy of certificate for shares of common stock E-16
4.2 Excerpts from By-Laws defining rights of
holders of common stock E-18
10.1 Technology License Agreement dated
May 15, 2001 between Direct Wireless
Corporation and Direct Wireless
Communications, Inc. E-21
23.1 Consent of Darilek, Butler & Co., P.C.
Certified Public Accountants E-32
|
EXHIBIT 3.1
[TEXAS SECRETARY OF STATE LETTERHEAD]
CERTIFICATE OF INCORPORATION
OF
DIRECT WIRELESS COMMUNICATIONS INC
CHARTER NUMBER 01623310
THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE CF TEXAS, HEREBY
CERTIFIES THAT THE ATTACHED ARTICLES OF INCORPORATION FOR THE ABOVE NAMED CORPORATION HAVE BEEN RECEIVED IN THIS OFFICE AND ARE FOUND TO CONFORM TO LAW.
ACCORDINGLY, THE UNDERSIGNED, AS SECRETARY OF STATE, AND BY VIRTUE OF THE AUTHORITY VESTED IN THE SECRETARY BY LAW HEREBY ISSUES THIS CERTIFICATE OF INCORPORATION.
ISSUANCE OF THIS CERTIFICATE OF INCORPORATION DOES NOT AUTHORIZE THE USE OF A CORPERATE NAME IN THIS STATE IN VIOLATION OF THE RIGHTS OF ANOTHER UNDER THE FEDERAL TRADEMARK ACT OF 1946, THE TEXAS TRADEMARK LAW,THE ASSUMED BUSINESS OR PROFESSIONAL NAME ACT OR THE COMMON LAW.
DATED APR. 6, 2001
EFFECTIVE APR. 6, 2001
[GRAPHIC SIGNATURE OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Article 1: THE name of the corporation shall BE Direct Wireless Communications, Inc.
Article II: THE REGISTERED AGENT OF THE CORPORATION SHALL BE NANCY HEEL,
RESIDING AT 2205 LEAR LANE, AUSTIN, TX 78745
ARTICLE III: The Director of the Corporation shall be Jerry W. Petermann,
residing at 1718 Rowe Lane, Pflugerville, TX 78660
ARFICLE IV: The total number of shares of stock authorized by the
corporation shall be Ten Million (10,000,000). The shares of
THE corporation are designated as having no par value.
ARTICLE V: The corporation shall not commence business until it has
received for the issuance of its shares consideration of the
value of one thousand dollars ($1,000.00).
ARTICLE V II: The purpose for which THE corporation is organized is FOR THE
transaction of any and all lawful business for which
corporations may be incorporated under the Texas Business
Corporation Act.
ARTICLE V III: The incorporator of THE corporation is Jerry W. PETERMANN,
1718 Rowe Lane, Pflugerville, TX 78660.
|
THE UNDERSIGNED Incorporator signs these articles of incorporation SUBJECT TO THE penalty imposed by article 10.02, Texas Business CORPORATION Act, for the submission of a false or fraudulent document.
/s/ [ILLEGIBLE] --------------- |
EXHIBIT 3.2
BYLAWS
OF
DIRECT WIRELESS COMMUNICATIONS, INC.
BYLAWS
OF
ARTICLE 1 - OFFICES
REGISTERED OFFICE AND AGENT
1.01 The registered office of the corporation shall be maintained at 2205 Lear Lane, Austin, Texas 78745. The registered agent at such address is Nancy Heel. The registered office or the registered agent, or both, may be changed by resolution of the Board of Directors, upon filing the statement required by law.
PRINCIPAL OFFICE
1.02 The principal office of the corporation shall be at 106 E. 6th Street, Suite 645, Austin, Texas 78701 provided that the Board of Directors shall have power to change the location of the principal office of its discretion.
OTHER OFFICES
1.03 The corporation may also maintain other offices at such places within or without the State of Texas as the Board of Directors may from time to time appoint or as the business of the corporation may require.
ARTICLE 2 - SHAREHOLDERS
PLACE OF MEETING
2.01 All meetings of shareholders, both regular and special, shall be held at the principal office of the corporation.
ANNUAL MEETING
2.02 The annual meeting of shareholders for the election of directors and for the transaction of all other business which may come before the meeting shall be held on the second Tuesday of March in each year (if not a legal holiday and, if a legal holiday, then on the next business day following) at the hour specified in the notice of meeting or such other time as the Board of Directors shall determine provided that an annual meeting shall be held at least once each calendar year.
If the election of directors shall not be held on the day above designated for the annual meeting, the Board of Directors shall cause the election to be held as soon thereafter as may be convenient at a special meeting of the shareholders called for the purpose of holding such election.
The annual meeting of shareholders may be held for any other purpose in addition to the election of directors which may be specified in a notice of such meeting. The meeting may be called by resolution of the Board of Directors or by a writing filed with the secretary signed either by a majority of the directors or by shareholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote at any such meeting.
SPECIAL SHAREHOLDERS MEETINGS
2.03 Special meetings of the Shareholders may be called by the Chief Executive Officer, the President, the Board of Directors, the holders of not less than twenty-five percent (25%) of all shares entitled to vote at the meeting so called, or such other officers or persons as may be provided by resolution of the Board of Directors.
NOTICE OF SHAREHOLDERS' MEETING
2.04 A written or printed notice stating the place, day and hour of the meeting, and in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the chief executive officer, president, the secretary, or the officer or person calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the share transfer book of the corporation, with postage thereon prepaid.
Attendance at a meeting shall be deemed to be waiver of notice, unless the Shareholder attending does so for the purpose of protesting the legality of the meeting and announces such purpose before casting a vote on any business before the meeting.
VOTING OF SHARES
2.05 Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation or by law.
At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whom election he has a right to vote.
CLOSING TRANSFER BOOKS AND FIXING RECORD DATE
2.06 For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that the share transfer books shall be closed for a stated period not exceeding fifty (50) days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer
books, the Bylaws or in the absence of an applicable Bylaw the Board of Directors, may fix in advance a date as a record date for any such determination of shareholders, not later than fifty (50) days and, in case of a meeting of shareholders, not earlier than ten (10) days prior to the date on which the particular action, requiring such determination of shareholders is to be taken. If the share transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment hereof, except where the determination has been made through the closing of share transfer books and the stated period of closing has expired.
QUORUM OF SHAREHOLDERS
2.07 The holders of a fifty percent (50%)of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders, but in no event shall a quorum consist of the holders of less than one-third (1/3) of the shares entitled to vote and thus represented at such meeting. At any Shareholders' meeting at which a quorum is present, a majority of the votes present shall be necessary to take action on any matter coming before the meeting, unless the vote of a greater number is required by law, by the Articles of Incorporation, or by these Bylaws,
VOTING LISTS
2.08 The officer or agent having charge of the share transfer books for the shares of the corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original share transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders.
ARTICLE 3 - DIRECTORS
BOARD OF DIRECTORS
3.01 The business and affairs of the corporation shall be managed by a Board of Directors. Directors need not be residents of the State of Texas or shareholders in the corporation.
NUMBER AND ELECTION OF DIRECTORS
3.02 The number of directors shall be at least three (5) and not more than seven (7) provided that the number may be increased or decreased from time to time by an amendment to these Bylaws, but no decrease shall have the effect of shortening the term of any incumbent director. At each annual election the shareholders shall elect directors to hold office until the next succeeding annual meeting.
3.03 Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of the remaining directors, though less than a quorum of the Board. A director elected to fill a vacancy shall be elected for the un-expired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose.
QUORUM OF DIRECTORS
3.04 A majority of the Board of Directors shall constitute a quorum for the transaction of business. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
ANNUAL MEETING OF DIRECTORS
3.05 Within thirty (30) days after each annual meeting of shareholders the Board of Directors elected at such meeting shall hold an annual meeting at which they shall elect officers and transact such other business as shall come before the meeting.
REGULAR MEETING OF DIRECTORS
3.06 A regular meeting of the Board of Directors may be held at such time as shall be determined from time to time by resolution of the Board of Directors.
SPECIAL MEETING OF DIRECTORS
3.07 The secretary shall call a special meeting of the Board of Directors whenever requested to do so by the president or by the directors. Such special meeting shall be held at the time specified by the Secretary in the notice of meeting.
PLACE OF DIRECTORS' MEETINGS
3.08 Absent prior resolution of the Board, all meetings of the Board of Directors (annual, regular or special) shall be held either at the principal office of the corporation or at such place, either within or without the State of Texas, as shall be specified in the notice of meeting.
NOTICE OF DIRECTORS' MEETING
3.09 All meetings of the Board of Directors (annual, regular or special) shall be held upon five (5) days' written notice stating the date, place and hour of meeting delivered to each director either personally or by mail or at the direction of the president or the secretary or the officer or person calling the meeting.
In any case where all of the directors execute a waiver of notice of the time and place of meeting, no notice thereof shall be required, and any such meeting (whether annual, regular or special) shall be held at the time and at the place (either within or without the State of Texas) specified in the waiver of notice. Attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where the director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be specified in the notice of waiver of notice of such meeting.
COMPENSATION
3.10 Directors, as such, shall not receive any stated salary for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each annual, regular or special meeting of the Board, provided, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.
REMOVAL
3.11 Any Director may be removed as Director, either with or without cause, at any special meeting of Shareholders if notice of intention to act upon the question of removing such Director shall have been stated as one of the purposes for the calling of the meeting In addition, any Director may be removed upon cause and then only upon the affirmative vote of at least two-thirds (2/3) of the Board of Directors
ARTICLE 4 - OFFICERS
OFFICERS ELECTION
4.01 The officers of the corporation shall consist of a chief executive officer, president, one or more vice-presidents, a secretary, and a treasurer. All such officers shall be elected at the annual meeting of the Board of Directors provided for in Article 3, Section 3.05. If any office is not filled at such annual meeting, it may be filled at any subsequent regular or special meeting of the Board. The Board of Directors at such annual meeting, or at any subsequent regular or special meeting may also elect or appoint such other officers and assistant officers and agents as may be deemed necessary. Any two or more offices may be held by the same person, except the offices of president or secretary.
All officers and assistant officers shall be elected to serve until the next annual meeting of directors following the next annual meeting of shareholders or until their successors are elected; provided, that any officer or assistant officer elected or appointed by the Board of Directors may be removed with or without cause at any regular or special meeting of the Board whenever in the judgment of the Board of Directors the best interests of the corporation will be served thereby, but such removal shall be without prejudiced to the contract rights, if any, of the person so removed. Any agent appointed shall serve for such term, not longer than the next annual meeting of the Board of Directors, as shall be specified, subject to like right of removal by the Board of Directors.
VACANCIES
4.02 If any office becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
POWER OF OFFICERS
4.03 Each officer shall have, subject to these Bylaws, in addition to the duties and powers specifically set forth herein, such powers and duties as are commonly incident to his office and such duties and powers as the Board of Directors shall from time to time designate. All officers
shall perform their duties subject to the directions and under the supervision of the Board of Directors. The chief executive officer or the president may secure the fidelity of any and all officers by bond or otherwise.
CHIEF EXECUTIVE OFFICER/PRESIDENT
4.04 The chief executive officer shall be the chief executive officer of the corporation. He shall preside at all meetings of the directors and shareholders. He shall see that all orders and resolutions of the Board are carried out, subject however, to the right of the directors to delegate specific powers, except such as may be by statute exclusively conferred on the president, to any other officers of the Corporation.
4.05 The chief executive officer and the president (if different from the chief executive officer) or any vice-president shall execute bonds, mortgages and other instruments requiring a seal, in the name of the corporation, and, when authorized by the Board, he or any vice-president may affix the seal to any instrument requiring the same, and the seal when so affixed shall be attested by the signature of either the secretary or an assistant secretary. He or any vice-president shall sign certificates of stock.
Both the chief executive officer and the president shall be ex-officio members of all standing committees.
The chief executive officer and/or the president shall submit a report of the operations of the corporation for the year to the directors at their meeting next preceding the annual meeting of the shareholders and to the shareholders at their annual meeting.
VICE-PRESIDENT
4.06 The vice-president shall, in the absence or disability of the president, perform the duties and exercise the powers of the president, and they shall perform such other duties as the Board of Directors shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
4.07 The secretary shall attend all meetings of the Board and all meetings of the shareholders and shall record all votes and the minutes of all proceedings and shall perform like duties for the standing committees when required. The secretary shall give or cause to be given notice of all meetings of the shareholders and all meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Board. The Secretary shall keep in safe custody the seal of the corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed, it shall be attested by the secretary's signature or by the signature of an assistant secretary.
The assistant secretary shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary, and they shall perform such other duties as the Board of Directors shall prescribe.
In the absence of the secretary or an assistant secretary, the minutes of all meetings of the Board and shareholders shall be recorded by such person as shall be designated by the president or by the Board of Directors.
THE TREASURER AND ASSISTANT TREASURERS
4.08 The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors.
The treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements. The treasurer shall keep and maintain the corporation's books of account and shall render to the president and directors an account of all of his transactions as treasurer and of the financial condition of the corporation and exhibit his books, records and accounts to the president or directors at any time. The treasurer shall disburse funds for capital expenditures as authorized by the Board of Directors and in accordance with the orders of the president, and present to the president for his attention any requests for disbursing funds if in the judgment of the treasurer any such request is not properly authorized. He shall perform such other duties as may be directed by the Board of Directors or by the president.
If required by the Board of Directors, he shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.
The assistant treasurer in the order of their seniority, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer, and they shall perform such other duties as the Board of Directors shall prescribe.
ARTICLE 5 - CERTIFICATES OF SHARES: TRANSFER, ETC.
CERTIFICATE OF STOCK
5.01 The certificates for shares of the corporation shall be numbered and shall be entered in the corporate records of the corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the president or a vice-president and the secretary or an assistant secretary and shall be sealed with the seal of the corporation or a facsimile thereof. If the corporation has a transfer agent or a registrar, other than the corporation itself or an employee of the corporation, the signatures of any such officer may be facsimile. In case any officer or officers who shall have signed or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the corporation, whether because of death, resignation or otherwise, before said certificate or certificates shall have been issued, such certificate may nevertheless be issued by the corporation with the same effect as though the person or persons who signed such certificates or whose facsimile signature or signatures shall have been used thereon has been such officer or officers at the date of its issuance. Certificates shall be in such form as shall in conformity to law be prescribed from time to time by the Board of Directors.
The corporation may appoint from time to time transfer agents and registrars, who shall perform their duties under the supervision of the secretary.
TRANSFER OF SHARES
5.02 Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books.
REGISTERED SHAREHOLDERS
5.03 The corporation shall be entitled to treat the holder of record of any share or shares as the holder in fact thereof and, accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
LOST CERTIFICATE
5.04 The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of the fact by the person claiming the certificate to be lost. When authorizing such issue of a new certificate or certificates, the Board of Directors in its discretion and as a condition precedent to the issuance thereof, may require the owner of such lost or destroyed certificate or certificates or his legal representatives to advertise the same in such manner as it shall require or to give the corporation a bond with surety and in form satisfactory to the corporation (which bond shall also name the corporation's transfer agents and registrars, if any, as obligees) in such sum as it may direct as indemnity against any claim that may be made against the corporation or other obligees with respect to the certificate alleged to have been lost or destroyed, or to advertise and also give such bond.
ARTICLE 6 - DIVIDEND
DECLARATION
6.01 The Board of Directors may declare at any annual, regular or special meeting of the Board and the corporation may pay, dividends on the outstanding shares in cash, property or in the shares of the corporation to the extent permitted by, and subject to, the provisions of the laws of the State of Texas.
RESERVES
6.02 Before the payment of any dividend there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time in their absolute discretion think proper as a reserve fund to meet contingencies or for equalizing dividends or for maintaining any property of the corporation or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may abolish any such reserve in the manner in which it was created.
ARTICLE 7 - MISCELLANEOUS
7.01 The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
7.02 No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution or the Board of Directors. Such authority may be general or confined to specific instances.
7.03 All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select.
7.04 All checks, drafts, or other order for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed in such manner as shall from time to time be determined by resolution of the Board of Directors.
INFORMAL ACTION
7.05 Any action required to be taken or which may be taken at a meeting of the shareholders, directors or members of the executive committee, may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the shareholders, directors, or members of the executive committee, as the case may be, entitled to vote with respect to the subject matter thereof, and such consent shall have the same force and effect as a unanimous vote of the shareholders, directors, or members of the executive committee, as the case may be, at a meeting of said body.
SEAL
7.06 The corporate seal shall be circular in form and shall contain the name of the corporation, the year of its incorporation, and the words "TEXAS" and an image of the Lone Star. The seal may be used by causing it or a facsimile to be impressed or affixed or in any other manner reproduced. The corporate seal may be altered by order of the Board of Directors at any time.
DIRECTORS' ANNUAL MEETING
7.07 The Board of Directors shall present at each annual meeting of shareholders a full and clear statement of the business and condition of the corporation.
AMENDMENTS
7.08 These Bylaws may be altered, amended or repealed in whole or in part by the affirmative vote of the majority of the Directors voting at a duly called meeting at which at least a quorum of Directors is present. In addition, these Bylaws may be altered, amended or repealed in whole or in part by the holders of a majority of the shares outstanding and entitled to vote at any annual meeting of the Shareholders, or if notice of a proposal to amend these Bylaws and the respect in which such proposed amendments to the Bylaws is given, then at any special meeting of the Shareholders at which at least a quorum is present.
ADOPTION OF BYLAWS
The Amended and Restated Bylaws were adopted by the Board of Directors on the 7th day of April, 2001.
DIRECT WIRELESS COMMUNICATIONS, INC.
/s/ W. Steven Walker --------------------------------------- W. Steven Walker, Secretary |
EXHIBIT 4.1
Incorporated Under the Laws Of The State of Texas
Number Shares
[GRAPHIC OMITTED]
D I R E C T W I R E L E S S C
|
OMMUNICATIONS, INC.
The Corporation is authorized to issue 10,000,000 Common Shares
COMMON STOCK
THIS CERTIFIES THAT ______________________SAMPLE CERTIFICATE______________ IS THE OWNER OF THE SHARES SET FORTH HEREON, FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF THE ABOVE CORPORATION TRANSFERABLE ONLY ON THE BOOKS OF THE CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS CERTIFICATE TO BE SIGNED BY ITS DULY AUTHORIZED OFFICERS AND TO BE SEALED WITH THE SEAL OF THE CORPORATION.
EXHIBIT 4.2
If the election of directors shall not be held on the day above designated for the annual meeting, the Board of Directors shall cause the election to be held as soon thereafter as may be convenient at a special meeting of the shareholders called for the purpose of holding such election.
The annual meeting of shareholders may be held for any other purpose in addition to the election of directors which may be specified in a notice of such meeting. The meeting may be called by resolution of the Board of Directors or by a writing filed with the secretary signed either by a majority of the directors or by shareholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote at any such meeting.
SPECIAL SHAREHOLDERS MEETINGS
2.03 Special meetings of the Shareholders may be called by the Chief Executive Officer, the President, the Board of Directors, the holders of not less than twenty-five percent (25%) of all shares entitled to vote at the meeting so called, or such other officers or persons as may be provided by resolution of the Board of Directors.
NOTICE OF SHAREHOLDERS' MEETING
2.04 A written or printed notice stating the place, day and hour of the meeting, and in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the chief executive officer, president, the secretary, or the officer or person calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the share transfer book of the corporation, with postage thereon prepaid.
Attendance at a meeting shall be deemed to be waiver of notice, unless the Shareholder attending does so for the purpose of protesting the legality of the meeting and announces such purpose before casting a vote on any business before the meeting.
VOTING OF SHARES
2.05 Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation or by law.
At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whom election he has a right to vote.
LOST CERTIFICATE
5.04 The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of the fact by the person claiming the certificate to be lost. When authorizing such issue of a new certificate or certificates, the Board of Directors in its discretion and as a condition precedent to the issuance thereof, may require the owner of such lost or destroyed certificate or certificates or his legal representatives to advertise the same in such manner as it shall require or to give the corporation a bond with surety and in form satisfactory to the corporation (which bond shall also name the corporation's transfer agents and registrars, if any, as obligees) in such sum as it may direct as indemnity against any claim that may be made against the corporation or other obligees with respect to the certificate alleged to have been lost or destroyed, or to advertise and also give such bond.
ARTICLE 6 - DIVIDEND
DECLARATION
6.01 The Board of Directors may declare at any annual, regular or special meeting of the Board and the corporation may pay, dividends on the outstanding shares in cash, property or in the shares of the corporation to the extent permitted by, and subject to, the provisions of the laws of the State of Texas.
RESERVES
6.02 Before the payment of any dividend there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time in their absolute discretion think proper as a reserve fund to meet contingencies or for equalizing dividends or for maintaining any property of the corporation or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may abolish any such reserve in the manner in which it was created.
ARTICLE 7 - MISCELLANEOUS
7.01 The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
7.02 No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution or the Board of Directors. Such authority may be general or confined to specific instances.
7.03 All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select.
EXHIBIT 10.1
THIS TECHNOLOGY LICENSE AGREEMENT made and entered into at Austin, Texas, effective this 30th day of April, 2001, by and between Direct Wireless Corporation, a corporation organized under the laws of the State of Texas with its principal place business at 106 E. 6th Street, Suite 650, Austin, Texas 78701 (hereafter referred to as "Licensor") and the Direct Wireless Communications, Inc., a Texas corporation with its principal place of business at 106 E. 6th Street, Suite 645, Austin, Texas 78701 (hereafter referred to as "Licensee").
WHEREAS, LICENSOR is the owner of all right, title and interest in and to certain wireless communications technology more fully described herein (hereafter the Technology), and
WHEREAS, LICENSOR intends to further develop the Technology, including (but not be limited to) additions, modifications and enhancements of the Technology, trade secrets, know-how, technical information and expertise, and
WHEREAS, LICENSEE desires to license directly from LICENSOR the Technology in and for the continental United States.
NOW, THEREFORE, for and in consideration of the faithful performance of the covenants, and obligations contained herein by the parties hereto, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE 1
General Definitions and Relationships among Definitions
The terms contained in this Agreement shall have the meaning set forth in this Article 1.
1.01 LICENSOR and LICENSEE are hereunder commonly referred to as "parties" (in singular and plural usage, as required by the context).
1.02 LICENSED TECHNOLOGY shall mean and include all licensed KNOW-HOW, TRADE SECRETS, LICENSED PATENTS, PATENT RIGHTS, IMPROVEMENTS, LICENSED PRODUCTS, LICENSED COMMUNICATIONS PROTOCOLS AND LICENSED METHODS.
1.03 KNOW-HOW shall mean the engineering, design, and operational techniques possessed by LICENSOR relating to the engineering specifications, manufacture, and operational performance of the LICENSED TECHNOLOGY, which are applicable within the LICENSED FIELD.
1.04 LICENSED FIELD shall mean the field of wireless communication systems, wireless communication products, wireless communications protocols and wireless communication methods.
1.05 LICENSED PATENTS means PATENTS and PATENT RIGHTS which relate to inventions in or applicable to the LICENSED PRODUCT OR LICENSED METHOD within the LICENSED FIELD and which are owned or controlled by LICENSOR during the term of this Agreement, or in respect to which LICENSOR has or may acquire during the term of this Agreement the right to grant licenses of the scope to be granted in this Agreement.
1.06 PATENT RIGHTS shall mean U. S. Patent No 5,995,849, filed November 26, 1997 and granted on November 30, 1999, U.S. Patent No. 6,141,531, filed April 17, 1998 and granted on October 31, 2000, U.S. Patent Application No. 800416 filed on June 1, 2000, International Application No. PCT/US98/13972, filed July 6, and any applications on inventions or IMPROVEMENTS based upon the LICENSED TECHNOLGY as well as any related application(s), more specifically, any continuation, divisional, continuation-in-part of substitution applications, and any foreign or domestic applications, corresponding to or based in whole or in part, on any of the above within the LICENSED FIELD.
1.07 IMPROVEMENTS shall mean improvements to and/or of LICENSED TECHNOLOGY, whether or not patentable, which during the continuance of this Agreement are made, conceived or acquired by either party or to which either party obtains rights which it can provide to the other without obligation to third parties, including changes made for the purpose of improving the operation, efficiency, manufacturability or deployment of the LICENSED PRODUCT or LICENSED METHOD within the LICENSED FIELD.
1.08 LICENSED PRODUCT shall mean any and all products which employ or are produced by the practice of inventions claimed in the LICENSED PATENTS or by the LICENSED TECHNOLOGY or any and all products that are used to carry out the LICENSED METHOD including but not limited to fixed base units known as Network Extenders and mobile units (also known as transmitter, transceivers, receivers or wireless handsets), repeaters (also known as signal extenders), wireless communications operational protocols, batteries, battery recharge units, specialized antennae, firmware and software.
1.09 LICENSED METHOD shall mean any method, process or wireless communications operational protocol covered by the LICENSED TECHNOLOGY and includes, but is not limited to, any method process or wireless communications operational protocol covered by a LICENSED PATENT.
1.10 AFFILIATES of LICENSEE shall mean any corporation, partnership, joint venture or other entity that LICENSEE owns or controls, directly or indirectly. 1.11 Designated Territories shall mean the continental United States.
1.12 Effective Date shall mean the date first above written.
1.13 MARKET System shall mean a complete and fully operational telecommunications system using the LICENSED Technology and shall include all equipment used thereon and other ancillary devices, equipment and materials, including without limitation, the LICENSED PRODUCTS.
1.14 EXHIBITS are those attachments referenced in this Technology License Agreement and are incorporated into this Technology License Agreement by reference.
1.15 EXHIBIT A is a license from LICENSOR to LICENSEE for any current or future licensed TRADEMARKS of the Direct Wireless Communication System.
1.16 EXHIBIT B is a map of the continental United States.
ARTICLE 2
Warranties
2.01 LICENSOR represents and warrants that, to the best of its knowledge and belief that it is the owner of the entire right, title and interest in and to the LICENSED TECHNOLOGY, and that it has the sole right to grant licenses there under, and that it has not knowingly granted licenses there under to any other entity within the DESIGNATED TERRITORIES that would restrict rights granted hereunder except as stated herein.
2.02 Nothing in this Agreement shall be construed as:
(a) A warranty or representation by LICENSOR as to the validity or scope of any LICENSED PATENTS or PATENT RIGHTS except as is specifically granted to LICENSOR within patents already issued within the United States and as granted by such statutes as are applicable to the issued patents; or
(b) A warranty or representation that anything used, sold or otherwise disposed of under any licenses granted in this Agreement, is or will be free from infringement of patents of third parties; or
(c) An obligation to bring or prosecute actions or suits against third parties for infringement.
2.02 LICENSOR EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE TECHNOLOGY, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. Further LICENSOR has made no investigation and makes no representation that the related Technology supplied by it or the methods used in making or using such materials are free from liability for patent infringement.
ARTICLE 3
License Grant
3.01 During the term hereof, LICENSOR hereby grants to LICENSEE an exclusive license to use, sell and sub-license under the terms hereof, the LICENSED PRODUCTS and LICENSED METHODS embodying, made or used in accordance with the LICENSED TECHNOLOGY in the continental United States. 3.02 LICENSOR further agrees to grant to LICENSEE licenses of the scope specified herein with respect to patents on any IMPROVMENTS as to which LICENSOR shall have the right to grant such licenses on IMPROVEMENTS without additional payment to LICENSOR.
3.03 LICENSOR further agrees to share with LICENSEE under commercially appropriate terms and conditions, know-how, trade secrets and other developments which LICENSOR, at any time during the term hereof comes to believe or has reason to believe may enhance LICENSEE's realization of the fullest potential application of the exclusive license created hereby, whether or not such technology is patentable.
3.04 LICENSEE agrees to direct its sales, marketing and sub-licensing activities in the continental United States and agrees not to knowingly sell, use or employ the LICENSED Technology outside of such Territory.
ARTICLE 4
Consideration/Royalty Rate
4.01 LICENSEE agrees to pay to LICENSOR as the Initial License Fee the following:
(a) Shares of common stock of Licensee in the amount of 1,489,633 shares transferred upon execution hereof
(b) The sum of $10,000,000, to be paid in such amounts and at such times over the course of the term of this LICENSE AGREEMENT as Direct Wireless Communications, Inc. receives money from the sale or sales of a SUB-LICENSE or SUB-LICENSES for the United States or from any sale or sales of equity in Direct Wireless Communications, Inc. made expressly for that purpose.
4.02 LICENSEE further agrees to pay to LICENSOR a royalty amount of 30% on all fees collected for all LICENSED PRODUCTS sold by, placed into commerce or otherwise disposed of by LICENSEE.
4.03 Royalties due under Paragraph 4.02 above shall accrue when an apparatus comprising the LICENSED PRODUCT has been shipped or invoiced by LICENSEE, whichever occurs first.
4.04 LICENSEE shall be entitled to a credit against future royalties due under this Technology License Agreement for bona fide returns of the LICENSED PRODUCTS, which return would decrease the total number of LICENSED PRODUCTS in commerce. LICENSEE shall provide reasonable documentation supporting the credit deduction.
ARTICLE 5
Royalty Reports and Payments
5.01 LICENSEE shall report to LICENSOR at the address to which notice is to be given specified in Article XI, in writing, on or before the 20th day of each month the number of LICENSED PRODUCTS in commerce for the preceding month. If royalties shall have accrued hereunder in such month, each such report shall include a computation of the royalties so accrued, including the model number and serial number of each apparatus incorporating LICENSED PRODUCTS that have been sold or otherwise put into service during such month and a computation of the total royalties for such month at the rate set forth in Paragraph 4.02 hereof; and the credit due LICENSEE for returns, if any, against such royalties. An officer of LICENSEE shall certify that such report is computed in compliance with the contractual requirements of this agreement and that LICENSEE is not in default under the terms and conditions.
5.02 Royalties set forth in Paragraph 4.02 on LICENSED PRODUCTS shall be due and payable on or before the 20th day of each month for the preceding month at the address to which notice is to be given specified in Article IX. Each report required under Paragraph 5.01 hereof shall be accompanied by payment in full for all royalty therein shown to be due. LICENSEE shall pay LICENSOR interest at the rate of fifteen percent (15%) per annum on all royalties not paid when due provided however, such interest, in no event, shall exceed the Maximum Legal Rate and shall be automatically reduced to the Maximum Legal Rate and, if any sums which exceed the Maximum Legal Rate are paid, LICENSOR at LICENSOR' s option, shall refund such over payment or apply the same to the principal royalties due hereunder In the event past due royalties are collected through bankruptcy or through judicial proceedings by an attorney or placed in the hands of an attorney for collection, LICENSEE agrees to pay a reasonable attorney's fee for collection
5.03 All Payments made by LICENSEE to LICENSOR under this Technology License Agreement shall be paid to LICENSOR free and clear of all taxes, including income, withholding, sales, turnover or other taxes applicable to the operations of LICENSEE.
ARTICLE 6
BOOKS AND RECORDS
6.01 LICENSEE shall maintain true and accurate books and records in sufficient detail to determine all payments due LICENSOR.
6.02 LICENSOR shall, upon written request to LICENSEE be entitled to inspect pertinent books and records of LICENSEE once each calendar quarter following thirty (30) days from end of the respective quarter to determine the accuracy and completeness of any report made to LICENSOR or to be rendered pursuant to Article V of this Technology License Agreement. In the
event such examination reveals a discrepancy of more than five percent (5%) of the royalties actually paid by LICENSEE during the period covered by the examination, the cost of examining the books will be borne by LICENSEE. LICENSEE shall not be required to retain any such books, records and accounts for a period of more than three (3) years after the close of the period to which such books, records and accounts relate.
ARTICLE 7
CONFIDENTIAL INFORMATION
7.01 LICENSEE shall safeguard the LICENSED TECHNOLOGY obtained heretofore or hereafter against unauthorized disclosure and shall reveal such information only to its employees having a need to know and only pursuant to an agreement with its employees to maintain such information confidential. In this regard, LICENSEE agrees not to disclose, either during or after the term of this Technology License Agreement, any confidential information of LICENSOR obtained by LICENSEE during the term hereof, and further agrees not to use any confidential information to the detriment of LICENSOR in any way other than as authorized by LICENSOR.
7.02 LICENSOR agrees not to disclose, either during or after the term of this Technology License Agreement any confidential information of LICENSEE, which LICENSEE has obtained during the term hereof, and further agrees not to use any such confidential information to the detriment of LICENSEE in any way other than as authorized by LICENSEE.
7.03 Neither LICENSOR and its Affiliates nor LICENSEE and its sub-licensees shall be obligated to maintain the confidence of:
(a) Information which is, or subsequently has been introduced into the public domain through no act or omission of the receiving party, its employees, agents, successors or assigns.
(b) Information which was lawfully disclosed to the receiving party by a third party having the right to disclose such information.
(c) Information which was already known by the receiving party at the time of the disclosure or was independently developed by the receiving party.
(d) Information that is required to be disclosed to a government agency.
ARTICLE 8
Term of Agreement and Termination
8.01 The term of this Agreement shall extend from the Effective Date and shall continue in force unless terminated as herein provided.
8.02 LICENSOR may at its option terminate this Agreement by written notice to LICENSEE upon the occurrence of any of the following events:
(a) LICENSEE fails to make timely payment of any amount due (including, but not limited to the supplemental royalty payments described in Article VI above or the royalties described in Article V) or shall fail to perform any other obligation under this Agreement and said failure shall continue for a period of thirty (30) days after written notice from LICENSOR to LICENSEE of such failure;
(b) In the event that LICENSEE shall dissolve, cease active business operations, or liquidate; provided, however that this provision shall not be applicable to any such occurrence which is incident to any merger or consolidation by LICENSEE with or into, or a sale or other transfer by LICENSEE of substantially all of its assets to, a person firm or corporation, if such person, firm or corporation expressly assumes and agrees to perform all of Licensee's obligations under this Agreement and LICENSOR agrees to this arrangement in writing.
(c) This Agreement shall terminate automatically if LICENSEE shall become bankrupt or insolvent and/or if the business of LICENSEE shall be placed in the hands of a receiver, assignee, or trustee, whether by voluntary act of LICENSEE or otherwise.
(d) In the event that management of LICENSEE changes from the management currently managing the operations of the LICENSEE.
8.03 This Agreement shall terminate at the option of the non-breaching party if either party fails to perform or fulfill any obligation or condition required to be performed or fulfilled by it, in the time and manner herein provided, or materially breaches this agreement in any manner, and, if such default or breach shall continue for thirty (30) days after written notice thereof the non-breaching or defaulting party shall have the right to terminate this Agreement. If such breach is of a nature that it cannot be cured within said thirty (30) day period but can be cured within a reasonable time thereafter, then the non-breaching or defaulting party may terminate this Agreement if efforts to cure such breach have not commenced or such efforts are not proceeding and being continued diligently both during and after such thirty day period prior to the breach being cured. Such rights to terminate the license granted by this Technology License Agreement shall be in addition to and shall not be prejudicial to any right or remedies, at law or in equity that said other party may have on account of such default.
8.04 Upon termination of this Agreement for any cause, nothing herein shall be construed to release either party of any obligation matured prior to the effective date of such termination. LICENSEE may, after the effective date of such termination, sell all LICENSED PRODUCTS that it may have on hand at the date of termination, provided that it pays earned royalties thereon as
provided in this Agreement.
8.05 Waiver by either party hereto of a particular instance of any of its rights hereunder shall not be considered as a continuing waiver of the rights or of any other rights hereunder.
ARTICLE 9
Sub-License
9.01 Subject to the reasonable approval of LICENSOR, LICENSEE shall, subject to the terms and conditions set forth herein including the Royalty Provisions and the Termination Provisions, have the right to sub-license the rights granted to LICENSEE hereunder to a qualified third party.
ARTICLE 10
Assignment
10.01 This Agreement nor any part thereof shall not be assigned by LICENSEE without the prior written consent of LICENSOR.
ARTICLE 11
Miscellaneous
11.01 LICENSEE shall not distribute or release the LICENSED PRODUCTS or the LICENSED TECHNOLOGY to others except to further the purposes of this Technology License Agreement.
11.02 During the term of this Agreement, LICENSOR will pay for all government fees associated with the procurement and maintenance of the PATENT RIGHTS.
11.03 LICENSEE shall indemnify and hold LICENSOR harmless against any and all claims for loss, damage, or injuries in connection with or arising out of (1) use by LICENSEE, its directors, employees, contractors, subcontractors1 or agents or by third parties of the LICENSED PRODUCTS or the LICENSED TECHNOLOGY, or (2) the design, manufacture, distribution or use of any licensed processes or Licensed Devices or other products developed in connection with or arising out of the Related Technology. Such indemnity shall include all costs and expenses, including attorney's fees and any costs of settlement. LICENSEE shall name LICENSOR as an additional named insured on its product liability insurance that shall be maintained at a level deemed by LICENSEE to be reasonable.
11.04 LICENSEE and/or subsequent sub-licensees through Agreements and Contracts agree not to seek, secure or engage in the sale, transfer or shipping of the LICENSED PRODUCTS or the LICENSED TECHNOLOGY outside the continental United States, and further understanding that such practices constitute a breach of this AGREEEMENT and the immediate
forfeiture of all rights and privileges extended to the LICENSEE under this AGREEMENT. The LICENSEE will defend and hold LICENSOR harmless in the event of any legal action of any nature occasioned by such violation of United States Department of Commerce export and shipping statutes either by the actions of the LICENSEE or that of their sub-licensee..
11.05 Should a court of competent jurisdiction later consider any provision of this Technology License Agreement to be invalid, illegal, or unenforceable, it shall be considered severed from this Technology License Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Technology License Agreement are in accordance with the intention of the parties.
11.06 During the term of this Technology License Agreement, should either LICENSOR or LICENSEE hereto become aware of any infringement by others upon the Patent Rights that LICENSOR has licensed to LICENSEE herein:
(a) It shall make the other party hereto aware of such infringement; and
(b) Only at the discretion of the LICENSOR may the LICENSEE also have the right to initiate litigation for the purpose of terminating such infringement. Sub-licensees are excluded from this right under this Agreement. In doing so, the initiating party has the right to join the other party claiming an interest in the Patents or Patent Rights as a party to such litigation. If both parties elect to share equally in the costs of the litigation, proceeds from such litigation shall be shared equally.
(c) In the event that the other party does not elect to share in the costs of the litigation, after receipt of such notice of such infringement from the initiating party, then the initiating party, subject to clause (b) above, shall have the right, at its discretion, to terminate such infringement, at its sole cost and expense and, in such event, all proceeds of such litigation shall be retained by the initiating party.
11.07 This Technology License Agreement shall be binding upon and inure to the benefit of the successors, legal representatives and assignees of LICENSOR and LICENSEE, provided, however, that LICENSOR shall not assign this Technology License Agreement to another party without prior written approval of LICENSEE, which approval shall not be unreasonably withheld.
11.08 This Technology License Agreement (including all exhibits attached hereto), together with all other writings executed and delivered contemporaneously herewith, constitute the entire Agreement of the undersigned Parties with respect to the subject matter hereof. No prior written or contemporaneous oral agreements, promises, or representations shall be binding upon the Parties hereto. This Technology License Agreement shall not be amended, supplemented, replaced or otherwise modified in any
respect except by written instrument signed by the authorized representatives of the Parties. Sub-licensee have no standing in this Agreement except as specifically prescribed within such Agreements as have been executed with the LICENSEE and subsequently approved by the LICENSOR.
11.09 Notice Address: Any notice hereunder shall be deemed to have been sufficiently given or served if sent by Certified Mail, Return Receipt Requested, at the address of LICENSOR and LICENSEE as first set forth above. Either party may, at any time and from time to time, change the address to which notice shall be given hereunder to the other party given by notice under this paragraph. The date of giving such notice shall be the date of the posting of the mail.
IN WITNESS WHEREOF, the parties hereto have caused this document to be executed in their respective corporate name by their officers duly authorized thereunto on the day and year first above set forth.
DIRECT WIRELESS CORPORATION
/s/ Robert S. Braswell, IV
--------------------------
By: Robert S. Braswell, IV
--------------------------
Title: President
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DIRECT WIRELESS COMMUNICATIONS, INC.
/s/ Bill G. Williams
--------------------------
By: Bill G. Williams
--------------------------
Title: Chief Executive Office
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EXHIBIT 23.1
DARILEK, BUTLER & CO., P.C.
622 Isom Road, Suite 100
San Antonio, Texas 78216
210-979-0055 phone
210-979-0058 fax
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to (a) the inclusion, in the Registration Statement of Direct Wireless Communications, Inc. on Form SB-2, of our report dated May 22, 2001, relating to the financial statements of Direct Wireless Communications, Inc. for the period ended April 30, 2001 and (b) the reference to our firm in the Registration Statement under the caption "Experts."
"Darilek, Butler & Co., P.C."
San Antonio, Texas
May 22, 2001