EX-10.01






THIS NOTE AND THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.



CONVERTIBLE PROMISSORY NOTE AGREEMENT




Date: December 7, 2005 $250,000.00



FOR VALUE RECEIVED, WAVERIDER COMMUNICATIONS INC., a corporation organized under the laws of
the State of Nevada (hereinafter called the “Borrower” or the “Corporation”), hereby promises to
pay to the order of WAVE WIRELESS CORPORATION or its registered assigns (the “Holder”), the sum of
TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) on June 7, 2006 (the “Scheduled Maturity Date”),
and to pay interest on the unpaid principal balance hereof at a rate of eight percent (8%) per
annum (except as otherwise provided herein). Interest shall accrue on the unpaid principal balance
hereof commencing on the date hereof (the “Issue Date”), until the same is paid, whether at
maturity, or upon prepayment, repayment, or otherwise. Interest shall be calculated based on a 365
day year and the principal amount hereof, together with all accrued and unpaid interest thereon,
shall be due and payable on the Scheduled Maturity Date. All payments of principal and interest
(to the extent not converted in accordance with the terms hereof) shall be made in, and all
references herein to monetary denominations shall refer to, lawful money of the United States of
America. All payments shall be made at such address as the Holder shall have given or shall
hereafter give to the Borrower by written notice made in accordance with the provisions of this
Note.



The term “Note” and all references thereto, as used throughout this instrument, shall mean
this instrument as originally executed, or if later amended or supplemented, then as so amended or
supplemented.



ARTICLE I




CERTAIN DEFINITIONS




The following terms shall have the following meanings:



A. "Common Stock” means the Common Stock, par value $0.0001 per share, of the Corporation.



B. “Conversion Amount” means the outstanding principal amount of this Note, together with all
accrued and unpaid interest thereon, on the Conversion Date.



C. "Conversion Date” means the date on which this Note is converted into Conversion
Securities.



D. "Conversion Securities” means shares of Common Stock.



E. "Conversion Price” means $0.11815.



F. "Strategic Transaction” means the proposed merger between a wholly owned subsidiary of the
Holder and the Borrower.



ARTICLE II




MECHANISM FOR NOTE EXCHANGE INTO STRATEGIC TRANSACTION




A. Strategic Transaction Purchase Price Credit. In the event the Strategic
Transaction is consummated, the Note shall be cancelled and the number of shares of Holder common
stock to be issued to the stockholders of Borrower in the Strategic Transaction shall be reduced by
that number of shares determined by dividing the principal value of the Note by the Transaction
Conversion Price, which shall equal eighty-five (85%) percent of the per share purchase price for
the Corporation’s common stock implied by the final exchange ratio in the Strategic Transaction.



ARTICLE III




CONVERSION




A. Optional Conversion. This Note may be convertible at any time by Holder, at its
sole election, into shares of the Corporation’s common stock at the Conversion Price.



B. Mechanics of Conversion.



(i) On the Conversion Date, the Holder shall surrender or cause to be surrendered this Note,
duly endorsed to the Corporation or the Corporation’s transfer agent.



(ii) The Corporation shall pay any and all taxes that may be imposed upon it with respect to
the issuance and delivery of the Conversion Securities upon the conversion of this Note.



(iii) If the number of Conversion Securities issuable upon conversion of this Note would
result in fractional shares, in lieu of the fractional shares, the Corporation shall make a cash
payment based upon the Conversion Price then in effect.







ARTICLE IV




RESERVATION OF SHARES




A. Reserved Amount. The Corporation shall reserve 2,500,000 authorized and unissued
shares of Common Stock for issuance upon conversion of this Note pursuant to Article III.A hereof,
and thereafter the number of authorized but unissued shares of Common Stock so reserved shall not
be decreased and shall at all times be sufficient to provide for the conversion of this Note
pursuant to Article III.A hereof at the then current Conversion Price (the number of shares of
Common Stock so reserved pursuant to this Article IV.A being referred to herein as the “Reserved
Amount”).



ARTICLE V




MISCELLANEOUS




A. Failure or Indulgency Not Waiver. No failure or delay on the part of the Holder in
the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.



B. Notices. Any notices required or permitted to be given under the terms of this
Note shall be sent by certified or registered mail (return receipt requested) or delivered
personally or by courier or by confirmed telecopy, and shall be effective five days after being
placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:




If to the Corporation:




WaveRider Communications, Inc.




255 Consumers Road




Suite 500




Toronto, Ontario




Canada M2J 1R4




Telephone: 1 416 502 3200




Facsimile: 1 416 502 2968




Attention: Chief Executive Officer




If to the Holder:




Wave Wireless Corporation




1996 Lundy Ave.




San Jose, CA 95131




Telephone: (408) 943-4200




Facsimile: (408) 943-4305




Attention: Dan Rumsey



Each party shall provide notice to the other parties of any change in address or the address
of any transferee of the Note.



C. Amendment Provision. This Note and any provision hereof may be amended only by an
instrument in writing signed by the Corporation and the Holder.



D. Assignability. This Note shall be binding upon the Corporation and its successors
and assigns and shall inure to the benefit of the Holder and its successors and assigns.
Notwithstanding anything to the contrary contained in this Note, this Note may be pledged and all
rights of the Holder under this Note may be assigned to any affiliate or to any other person or
entity without the consent of the Corporation.



E. Governing Law; Jurisdiction. This Note shall be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts made and to be performed in
the State of Nevada. The Corporation irrevocably consents to the jurisdiction of the United States
federal courts and the state courts located in the State of Nevada in any suit or proceeding based
on or arising under this Note and irrevocably agrees that all claims in respect of such suit or
proceeding may be determined in such courts. The Corporation irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Corporation further agrees
that service of process upon the Corporation mailed by first class mail shall be deemed in every
respect effective service of process upon the Corporation in any such suit or proceeding. Nothing
herein shall affect the right of the Holder to serve process in any other manner permitted by law.
The Corporation agrees that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.



F. Lost or Stolen Notes. Upon receipt by the Corporation of (i) evidence of the loss,
theft, destruction or mutilation of the Note and (ii) (y) in the case of loss, theft or
destruction, of indemnity (without any bond or other security) reasonably satisfactory to the
Corporation, or (z) in the case of mutilation, upon surrender and cancellation of the Note, the
Corporation shall execute and deliver a new Note of like tenor and date.



G. Payment of Cash. Whenever the Corporation is required to make any cash payment to
the Holder hereunder (whether a upon prepayment, repayment or otherwise), such cash payment shall
be made in U.S. dollars to the Holder within five business days after delivery by such Holder of a
notice specifying that the Holder elects to receive such payment in cash and the method (e.g., by
check, wire transfer) in which such payment should be made. If such payment is not delivered
within such five business day period, the Holder shall thereafter be entitled to interest on the
unpaid amount at a per annum rate equal to the lower of twenty-four percent (24%) and the highest
interest rate permitted by applicable law until such amount is paid in full to the Holder.



H. Status as Note Holder. Upon an optional conversion pursuant to Article III hereof,
(i) the principal amount of this Note (including the accrued and unpaid interest thereon) shall be
deemed converted into Conversion Securities as of the Conversion Date and (ii) the Holder’s rights
as a Holder of this Note shall cease and terminate, excepting only the right (A) to receive
certificates for such Conversion Securities and (B) to exercise any remedies provided herein or
otherwise available at law or in equity to the Holder because of a failure by the Corporation to
comply with the terms of this Note.



I. Events of Default. The occurrence of any of the following events shall be an
"Event of Default” under this Note:




	 	1.	 	the Corporation shall fail to make the payment of any amount of any principal
outstanding for a period of three (3) business days after the date such payment shall
become due and payable hereunder; or






	 	2.	 	the Corporation shall fail to make any payment of interest for a period of
three (3) business days after the date such interest shall become due and payable
hereunder; or






	 	3.	 	the holder of any indebtedness of the Corporation or any of its subsidiaries
shall accelerate any payment of any amount or amounts of principal or interest on any
indebtedness (the “Indebtedness”) (other than the Indebtedness hereunder) prior
to its stated maturity or payment date the aggregate principal amount of which
Indebtedness of all such persons is in excess of $1,000,000, whether such Indebtedness
now exists or shall hereinafter be created, and such accelerated payment entitles the
holder thereof to immediate payment of such Indebtedness which is due and owing and
such indebtedness has not been discharged in full or such acceleration has not been
stayed, rescinded or annulled within ten (10) business days of such acceleration; or






	 	4.	 	A judgment or order for the payment of money shall be rendered against the
Corporation or any of its subsidiaries in excess of $250,000 in the aggregate (net of
any applicable insurance coverage) for all such judgments or orders against all such
persons (treating any deductibles, self insurance or retention as not so covered) that
shall not be discharged, and all such judgments and orders remain outstanding, and
there shall be any period of sixty (60) consecutive days following entry of the
judgment or order in excess of $250,000 or the judgment or order which causes the
aggregate amount described above to exceed $250,000 during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or






	 	5.	 	the Corporation shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property or assets, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code
or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’ rights
generally, (v) acquiesce in writing to any petition filed against it in an involuntary
case under the Bankruptcy Code or under the comparable laws of any jurisdiction
(foreign or domestic), or (vi) take any action under the laws of any jurisdiction
(foreign or domestic) analogous to any of the foregoing; or






	 	6.	 	a proceeding or case shall be commenced in respect of the Corporation or any of
its subsidiaries without its application or consent, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution,
winding up, or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any substantial
part of its assets or (iii) similar relief in respect of it under any law providing for
the relief of debtors, and such proceeding or case described in clause (i), (ii) or
(iii) shall continue undismissed, or unstayed and in effect, for a period of ninety
(90) consecutive days or any order for relief shall be entered in an involuntary case
under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or
domestic) against the Corporation or any of its subsidiaries or action under the laws
of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be
taken with respect to the Corporation or any of its subsidiaries and shall continue
undismissed, or unstayed and in effect for a period of ninety (90) consecutive days; or






	 	7.	 	the suspension from listing or the failure of the Common Stock to be listed on
the OTC Bulletin Board for a period of five (5) consecutive trading days.





J. Remedies Upon An Event of Default. If an Event of Default shall have occurred and
shall be continuing, the Holder of this Note may at any time at its option declare the entire
unpaid principal balance of this Note, together with all interest accrued hereon, due and payable,
and thereupon, the same shall be accelerated and so due and payable, without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the
Corporation. Holder may exercise or otherwise enforce any one or more of the Holder’s rights,
powers, privileges, remedies and interests under this Note or applicable law. No course of delay
on the part of the Holder shall operate as a waiver thereof or otherwise prejudice the right of the
Holder. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or
now or hereafter available at law, in equity, by statute or otherwise. Notwithstanding the
foregoing, Holder agrees that its rights and remedies hereunder are limited to receipt of cash or
shares of the Corporation’s equity securities in the amounts described herein.



K. Remedies Cumulative. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit a Holder’s
right to pursue actual damages for any failure by the Corporation to comply with the terms of this
Note. The Corporation acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holders of the Notes and that the remedy at law for any such breach may be
inadequate. The Corporation therefore agrees, in the event of any such breach or threatened
breach, that the Holders of the Notes shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss
and without any bond or other security being required.



L. Business Day. For purposes of this Note, the term "business day” means any day,
other than a Saturday or Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law, regulation or executive order to close. If any payment to be made
hereunder shall be stated to be or become due on a day which is not a business day, such payment
shall be made on the next following business day and such extension of time shall be included in
computing interest in connection with such payment.



M. Certain Waivers. Borrower and each endorser hereby waive presentment, notice of
nonpayment or dishonor, protest, notice of protest and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of payment of this Note, and hereby waive
all notice or right of approval of any extensions, renewals, modifications or forbearances which
may be allowed.



N. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES, AND HOLDER BY ITS ACCEPTANCE HEREOF
WAIVES, TRIAL BY JURY IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE
OR THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER TO ACCEPT
AND RELY UPON THIS NOTE.



O. Severability. If any provision of this Note shall be prohibited or invalid, under
applicable law, it shall be ineffective only to such extent, without invalidating the remainder of
this Note.



P. Maximum Interest Rate. If the effective interest rate on this Note would otherwise
violate any applicable usury law, then the interest rate shall be reduced to the maximum
permissible rate and any payment received by the Holder in excess of the maximum permissible rate
shall be treated as a prepayment of the principal of this Note.



O. Parties In Interest. This Note is binding upon and shall inure to the benefit of
the Corporation and Wave Wireless Corporation, and, except where prohibited, their successors,
representatives and assigns. Unless expressly stated to the contrary, no other person is intended
to have any benefits, rights or remedies under this Note.



IN WITNESS WHEREOF, the undersigned Wave Wireless Corporation and the Corporation have caused
this Agreement to be duly executed as of the date first above written.



WAVERIDER COMMUNICATIONS, INC.




By: /s/ Daniel W. Rumsey

Name: Daniel W. Rumsey

Title: Acting Chief Executive Officer







WAVE WIRELESS CORPORATION




By: /s/ Charles Brown





Name: Charles Brown

Title: Chief Executive Officer