Document:

EXHIBIT 10.33

 

***
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED BY
ASTERISKS) HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER 17
C.F.R. SECTIONS 200.80(B)(4), 200.83 AND 230.406.

 

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THE SECURITIES OR DELIVERY TO
THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER
THE ACT.

 

WARRANT
TO PURCHASE COMMON STOCK

 

OF

 

DIGIRAD
CORPORATION

 

	
  MWC
  -        

  	
   

  	
  Date of Issuance
  – November 13, 2002

  

 

Void after
November 13, 2007

 

Digirad Corporation, a
Delaware corporation (the “Company”), hereby certifies that, for
value received
                                      
(including any successors and assigns, the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time,
before 5:00 PM, Pacific time on November 13, 2007 (the “Expiration
Date”) up to that number of fully paid and nonassessable shares of
Common Stock of the Company (“Common Stock”) as is determined pursuant
to Section 2.2 (the “Warrant Shares”), subject to adjustment as
provided herein; provided, however, that notwithstanding any other term
of this Warrant, in no event shall this Warrant be exercisable for more
than    ***    Warrant Shares.  The
purchase price per share of such Common Stock upon exercise of this Warrant
shall be 

$  ***  
(the “Exercise Price”), subject to adjustment as provided
herein.  This Warrant is issued to the
Holder in connection with and subject to the terms and conditions of that
certain Consulting Agreement dated November 13, 2002, by and between the
Company and McAdams and Whitham Consulting, LLC (the “Consulting Agreement”).

 

1.                                       Exercise
Period.  Subject to Section 2.4
herein, this Warrant may be exercised by the Holder at any time or from time to
time after the Date of Issuance noted above but before 5:00 PM, Pacific time on
the Expiration Date (the “Exercise Period”) for up to that number of
Warrant Shares as is determined pursuant to Section 2.2 below (the “Vested
Warrant Shares”).

 

2.                                       Exercise of Warrant; Number of
Warrant Shares; Termination.

 

2.1                                 Exercise
of Warrant; Partial Exercise.  This
Warrant may be exercised in full or in part by the Holder with respect to any
or all of the Vested Warrant Shares by surrender

 

***    Portions
of this page have been omitted pursuant to a request for Confidential Treatment
and filed separately with the commission.

 

 

of this Warrant, together
with the form of subscription attached hereto as Schedule 1, duly executed
by the Holder, to the Company at its principal office, accompanied by payment,
in cash or by certified or official bank check payable to the order of the
Company, of the aggregate Exercise Price for the Vested Warrant Shares to be
purchased hereunder.  For any partial
exercise hereof, the Holder shall designate in a notice of exercise or net
issue election notice that number of shares of Common Stock that he wishes to
purchase.  On any such partial exercise,
the Company at its expense shall forthwith issue and deliver to the Holder a
new warrant of like tenor, in the name of the Holder, which shall be
exercisable for such number of shares of Common Stock represented by this
Warrant which have not been purchased upon such exercise.  

 

2.2                                 Number of Vested Warrant Shares. 
Subject to adjustment as hereinafter provided, this
Warrant shall be exercisable by the Holder for an increasing number of Warrant
Shares (up to an aggregate maximum of     
***       shares of Common Stock)
pursuant to the following schedule:

 

(1)                                  On       
***      , this Warrant shall become exercisable
for up to an aggregate of       
***      Warrant Shares, provided that the Holder
has remained “in service to the Company” (as defined below) as of such date;
and

 

(2)                                  On       
***      , this Warrant shall become exercisable
for up to an aggregate of       
***      Warrant Shares, provided that the Holder
has remained in service to the Company as of such date.

 

For purposes of this
Section 2.2, the Holder shall be deemed to be “in service to the Company”
as of a particular date so long as the Consulting Agreement has not been
terminated and remains in full force and effect as of such date.

 

2.3                                 Acceleration of the Warrant Shares
Upon a Corporate Transaction.  Immediately
prior to the occurrence of a Corporate Transaction (as hereinafter defined),
this Warrant shall become exercisable in full by the Holder for       
***      Warrant Shares.  For the purposes of this Warrant, a
“Corporate Transaction” shall mean: (i) a merger or consolidation in which
securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction; or (ii) the sale, transfer or other
disposition of all or substantially all of the Company’s assets in complete
liquidation or dissolution of the Company.

 

2.4                                 Termination of the Warrant Upon a
Corporate Transaction.  Immediately
following the occurrence of a Corporate Transaction, this Warrant shall
terminate and cease to be outstanding, provided that written notice has been
given to the Holder at least 20 days prior to the occurrence of the Corporate
Transaction.

 

3.                                       Net Issuance.

 

3.1                                 Right to Convert. 
Subject to Section 2.2, the Holder shall have the
right to convert this Warrant or any portion thereof (the “Conversion Right”) into
shares of Common Stock as provided in this Section 3 at any time or from
time to time during the Exercise Period. 
Upon exercise of the Conversion Right with respect to a particular
number of Vested Warrant

 

***    Portions
of this page have been omitted pursuant to a request for Confidential Treatment
and filed separately with the commission.

2

 

Shares (the “Converted
Warrant  Shares”), the Company shall deliver to the
Holder (without payment by the Holder of any exercise price or any cash or
other consideration) that number of shares of fully paid and nonassessable
shares of Common Stock computed using the following formula:

 

X = Y
(A - B)

A

 

	
  Where

  	
  X

  	
  =

  	
  the number of shares of
  Common Stock to be delivered to the Holder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Y

  	
  =

  	
  the number of Converted
  Warrant Shares

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
  =

  	
  the fair market value
  of one share of the Company’s Common Stock on the Conversion Date (as defined
  below)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B

  	
  =

  	
  the Exercise Price (as
  adjusted through the Conversion Date)

  

 

The Conversion Right may
only be exercised with respect to a whole number of Vested Warrant Shares.  No fractional shares shall be issuable upon
exercise of the Conversion Right, and if the number of shares to be issued
determined in accordance with the foregoing formula is other than a whole
number, the Company shall pay to the Holder an amount in cash equal to the fair
market value of the resulting fractional share on the Conversion Date (as
defined below).  Shares issued pursuant
to the Conversion Right shall be treated as if they were issued upon the
exercise of this Warrant.

 

3.2                                 Method of Exercise. 
The Conversion Right may be exercised by the Holder by the
surrender of this Warrant at the principal office of the Company together with
a written statement specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the total number of shares under this Warrant
that the Holder is exercising through the Conversion Right.  Such conversion shall be effective upon
receipt by the Company of this Warrant together with the aforesaid written statement,
or on such later date as is specified therein (the “Conversion Date”) and at
such time the person in whose name any certificate for shares of Common Stock
shall be issuable upon such exercise shall be deemed to be the record holder of
such Common Stock for all purposes. 
Certificates for the shares issuable upon exercise of the Conversion
Right and, if applicable, a new warrant evidencing the balance of the shares
remaining subject to the Warrant, shall be issued as of the Conversion Date and
shall be delivered to the Holder promptly following the Conversion Date.

 

3.3                                 Determination of Fair Market Value. 
For purposes of this Section 3, fair market value of
a share of Common Stock on the Conversion Date shall mean:

 

(1)                                  If traded on a stock exchange, the
fair market value of the Common Stock shall be deemed to be the average of the
closing selling prices of the Common Stock on the stock exchange determined by
the Board of Directors of the Company (the “Board”) to be the primary market for the
Common Stock over the ten (10) trading day period (or such shorter period
immediately following the closing of the Company’s initial public offering)
ending on the date prior to the Conversion Date, as such prices are officially
quoted in the composite tape of transactions on such exchange;

 

3

 

(2)                                  If traded over-the-counter, the fair
market value of the Common Stock shall be deemed to be the average of the
closing bid prices (or, if such information is available, the closing selling
prices) of the Common Stock over the ten (10) trading day period (or such
shorter period immediately following the closing of the Company’s initial
public offering) ending on the date prior to the Conversion Date, as such
prices are reported by the National Association of Securities Dealers through
its NASDAQ system or any successor system; and

 

(3)                                  If there is no public market for the
Common Stock, the fair market value of the Common Stock shall be determined in
good faith by the Board.

 

4.                                       When Exercise Effective. 
The exercise of this Warrant pursuant to Section 2
shall be deemed to have been effected immediately prior to the close of
business on the business day on which this Warrant is surrendered to the
Company as provided in Section 2.1, or on such later date as is specified
in the form of subscription, and at such time the person in whose name any
certificate for shares of Common Stock shall be issuable upon such exercise, as
provided in Section 5, shall be deemed to be the record holder of such
Common Stock for all purposes.

 

5.                                       Delivery on Exercise. 
As soon as practicable after the exercise of this Warrant
in full or in part pursuant to Section 2, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as the Holder may direct,
a certificate or certificates for the number of fully paid and nonassessable
full shares of Common Stock to which the Holder shall be entitled on such
exercise, together with cash, in lieu of any fraction of a share, equal to such
fraction of the current market value of one full share of Common Stock as
determined pursuant to Section 3.3.

 

6.                                       Adjustments. 
The number and kind of shares of Common Stock (or any
shares of stock or other securities which may be) issuable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment from time to
time upon the happening of certain events, as follows:

 

6.1                                 Dividends, Distributions, Stock
Splits or Combinations.  If
the Company shall at any time or from time to time after the date hereof (a)
make or issue, or fix a record date for the determination of holders of Common
Stock (or any shares of stock or other securities which may be issuable upon
the exercise of this Warrant) entitled to receive, a dividend or other
distribution payable in additional shares of common or preferred stock (as the
case may be), (b) subdivide its outstanding shares of Common Stock (or any
shares of stock or other securities which may be issuable upon the exercise of
this Warrant) into a larger number of shares of Common Stock (or any shares of
stock or other securities which may be issuable upon the exercise of this
Warrant) or (c) combine its outstanding shares of Common Stock (or any shares
of stock or other securities which may be issuable upon the exercise of this
Warrant) into a smaller number of shares of Common Stock (or any shares of
stock or other securities which may be issuable upon the exercise of this
Warrant), then and in each such event the Exercise Price then in effect and the
number of shares issuable upon exercise of this Warrant shall be appropriately
adjusted.

 

4

 

6.2                                 Reclassification or Reorganization. 
If the Common Stock (or any shares of stock or other
securities which may be) issuable upon the exercise of this Warrant shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend provided for in
Section 6.1 above, or pursuant to a Corporate Transaction), then and in
each such event the Holder shall be entitled to receive upon the exercise of
this Warrant the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change
to which a holder of the number of shares of Common Stock (or any shares of
stock or other securities which may be) issuable upon the exercise of this
Warrant would have received if this Warrant had been exercised immediately
prior to such reorganization, reclassification or other change, all subject to
further adjustment as provided herein.

 

6.3                                 Notice of Adjustments and Record
Dates.  The Company shall promptly
notify the Holder in writing of each adjustment or readjustment of the Exercise
Price and the number of shares of Common Stock (or any shares of stock or other
securities which may be) issuable upon the exercise of this Warrant.  Such notice shall state the adjustment or
readjustment and show in reasonable detail the facts on which that adjustment
or readjustment is based.  In the event
of any taking by the Company of a record of the holders of Common Stock (or any
shares of stock or other securities which may be issuable upon the exercise of
this Warrant) for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, the Company shall
notify Holder in writing of such record date at least twenty (20) days prior to
the date specified therein.

 

6.4                                 When Adjustments To Be Made. 
No adjustment in the Exercise Price shall be required by
this Section 6 if such adjustment either by itself or with other
adjustments not previously made would require an increase or decrease of less
than one percent (1%) in such price. 
Any adjustment representing a change of less than such minimum amount
which is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 6 and
not previously made, would result in a minimum adjustment.  Notwithstanding the foregoing, any
adjustment carried forward shall be made no later than ten (10) business days prior
to the Expiration Date.  All
calculations under this Section 6.4 shall be made to the nearest
cent.  For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close
of business on the date of its occurrence.

 

6.5                                 Certain Other Events. 
If any change in the outstanding Common Stock (or any
shares of stock or other securities which may be issuable upon the exercise of
this Warrant) or any other event occurs as to which the other provisions of
this Section 6 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board shall make an adjustment in the
number and class of shares available under this Warrant, the Exercise Price or
the application of such provisions, so as to protect such purchase rights as
aforesaid.  The adjustment shall be such
as will give the Holder, upon exercise of this Warrant, the same aggregate
Exercise Price and the same total number, class and kind of shares as the
Holder would have owned had this Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring
adjustment.

 

5

 

7.                                       Replacement of Warrants. 
On receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, the Company at its expense will execute and
deliver to the Holder, in lieu thereof, a new warrant of like tenor.

 

8.                                       No Rights or Liability as a
Stockholder.  This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a stockholder of the
Company.  No provisions hereof, in the
absence of affirmative action by the Holder to purchase Common Stock, and no
enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of the Holder as a stockholder of the Company.

 

9.                                       Representations of Holder.

 

The Holder hereby
represents, covenants and acknowledges to the Company that:

 

(1)                                  this Warrant and the Warrant Shares
are “restricted securities” as such term is used in the rules and regulations
under the Securities Act of 1933, as amended (the “Act”) and that this Warrant
and the Warrant Shares have not been registered under the Act and the Company
has no present intention of registering the Securities under the Act or any
state securities law, and that this Warrant and the Warrant Shares must be held
indefinitely unless a transfer can be made pursuant to appropriate exemptions;

 

(2)                                  the Holder has read, and fully
understands, the terms of this Warrant set forth on its face and the
attachments hereto, including the restrictions on transfer contained herein;

 

(3)                                  the Holder is purchasing for
investment for his own account and not with a view to or for sale in connection
with any distribution of this Warrant or the Warrant Shares and he has no
intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws;

 

(4)                                  the Holder is an “accredited
investor” within the meaning of paragraph (a) of Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission (the “Commission”); and

 

(5)                                  the Holder (i) has received all
information the Holder has requested from the Company and considers necessary
or appropriate for deciding whether to acquire this Warrant and the Warrant
Shares, (ii) has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of this Warrant and the Warrant
Shares and to obtain any additional information necessary to verify the
accuracy of the information given to the Holder, and (iii) has such knowledge
and experience in financial and business matters such that the Holder is
capable of evaluating the merits and risks of the investment in this Warrant
and the Warrant Shares.

 

10.                                 Market Stand-Off Agreement. 
The Holder hereby agrees that, during the period of
duration specified by the Company and an underwriter of Common Stock or other
securities

 

6

 

of the Company, following
the effective date of a registration statement of the Company filed under the
Act, he shall not, to the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company held by him at any time during such period except
Common Stock included in such registration; provided, however, that:

 

(1)                                  Such agreement shall not exceed 180
days for the first such registration statement of the Company which covers
Common Stock (or other securities) to be sold on its behalf to the public in an
underwritten offering;

 

(2)                                  Such agreement shall not exceed
ninety (90) days for any subsequent registration statement of the Company which
covers Common Stock (or other securities) to be sold on its behalf to the
public in an underwritten offering; and

 

(3)                                  All directors and officers of the
Company as well as all holders of one percent (1%) or more of the Company’s
outstanding capital stock are similarly bound.

 

In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to securities held by the Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such
period.

 

11.                                 Miscellaneous.

 

11.1                           Transfer of Warrant. 
This Warrant shall not be transferable or assignable by
the Holder without the express written consent of the Company.

 

11.2                           Notices. 
Any notice required or permitted under this Warrant shall
be in writing and shall be hand delivered, sent by facsimile or other
electronic medium, by registered or certified mail, postage prepaid, or by
nationally recognized overnight carrier to the Company or to the Holder at the
address set forth below on the signature page to this Warrant or to such other
address as may be furnished in writing to the other party hereto.  Such notice shall be deemed effectively
given (i) if hand delivered, upon delivery, (ii) if sent by facsimile or other
electronic medium, when confirmed, if sent during the normal business hours of
the recipient (if not sent during the normal business hours of the recipient,
then on the next business day), (iii) if sent by mail, five days after having
been sent, or (iv) if sent by nationally recognized overnight courier, one day
after deposit with such courier.

 

11.3                           Attorneys’ Fees. 
If any action at law or in equity is necessary to enforce
or interpret the terms of this Warrant, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and disbursements in addition to any other
relief to which such party may be entitled.

 

11.4                           Amendments and Waivers. 
Any term of this Warrant may be amended and the observance
of any other term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder.

 

7

 

11.5                           Severability. 
If one or more provisions of this Warrant are held to be
unenforceable under applicable law, such provision shall be excluded from this
Warrant and the balance of the Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

 

11.6                           Governing Law. 
This Warrant shall be governed by and construed and enforced
in accordance with the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.

 

 

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

8

 

IN WITNESS WHEREOF, the
undersigned have caused this Warrant to be executed by its officers thereunto
duly authorized.

 

	
  COMPANY:

  	
  DIGIRAD CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David M. Sheehan

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  HOLDER:

  	
   

  	
   

  
					

 

 

[COUNTERPART
SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGIRAD CORPORATION]

 

 

SCHEDULE 1

 

FORM OF SUBSCRIPTION

 

(To be signed only on exercise of Warrant)

 

To:                              Digirad
Corporation

 

The undersigned, the
holder of the Warrant attached hereto, hereby irrevocably elects to exercise
the purchase rights represented by such Warrant for, and to purchase
thereunder,
              *
shares of common stock of Digirad Corporation, and herewith makes payment of
$                    
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to
                                        ,
whose address is
                                                          .

 

	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of the Holder as specified on the face of the
  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				

 

 

* Insert here the number
of shares as to which the Warrant is being exercised.

 

[SCHEDULE 1]

 

 

SCHEDULE OF INVESTORS

 

WARRANTHOLDER

 

Stephen A. McAdams

 

John C. Whitham

 

[SCHEDULE OF INVESTORS]EX-10.3

                   AMENDMENT B TO EMPLOYMENT AGREEMENT

                     AMENDMENT B TO EMPLOYMENT AGREEMENT

This Amendment B ("Amendment") is made and entered into effective as
of 1/20/2004 (the "Effective Date") to the Employment Agreement
referenced below by and between World Am Communications, Inc.
("Company" or "Employer"), and James Alexander,
an individual (Employee") (together the "Parties").

                                RECITALS

WHEREAS, the Parties had entered into an Employment Agreement on
February 20, 2002, (the "Original Agreement"); and together with
Amendment A dated September 6, 2000, and

WHEREAS, the Parties now want to amend the Original Agreement and
Amendment A to make such changes as are specifically covered herein.

                                    AGREEMENT

NOW, THEREFORE, for good and valuable consideration, and in
consideration of the mutual covenants and conditions herein set forth,
the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

Section 2.0 is hereby deleted and revised to read in its entirety as
follows:

     2.0  Term.  This Agreement shall commence effective as of
February 20, 2002, and shall continue in effect for a period of five
(5) years (the "Employment Period"); unless terminated earlier, by
Company or Employee, upon prior written notice.  Further, if a change
of control (as defined herein) on the Company shall have occurred
during the Employment Period, this Agreement shall continue in effect
for a period of twelve (12) months beyond the month in which such
change of control occurred.

Section 4.1 is hereby deleted and revised to read in its entirety as follows:

     Base Salary and Considerations.  A fixed salary in the amount of
$120,000 per year shall be paid in consistent with the standard
payroll practices of Employer in place from time-to-time, as may be
adjusted from time-to-time by the Board in its discretion.  The fixed
salary is payable in cash, World Am common stock, or stock options.
If paid in stock, those shares shall be registered under Form 144.

Section 4.1.1 is hereby added to read in its entirety as follows:

     4.1.1  Performance Bonus.  Company shall also pay to executive
a bonus from time-to-time based on performance of the executive.  The criteria
to help determine the performance of the executive may include for
example, stock price, market share, sales, earnings per share, return
on effective merger and or acquisitions.  The ultimate amount of bonus
shall be determined by the Corporate board of directors.

Section 4.2.1 is hereby deleted and revised to read in its entirety as follows:

     Twenty Four Million (24,000,000) shares of the Common Stock of
the Company pursuant to the terms of the Employee Stock Purchase Plan
(ESSP) to be adopted by the Company and registered under Form S-8.
These shares shall vest in equal installments, One Million Two Hundred
(1,200,000) shares quarterly over the five year Term; and,

     4.3  Employee Benefit Plans.  The Employee, his dependents and
beneficiaries, shall be entitled to participate in any pension, profit
sharing, medical reimbursement, insurance or other employee payment or
benefit plan of the Employer as may be in effect from time to time,
subject to the participation standards and other terms thereof, to the
same extent as other officers under the benefit practices of the Company.

     Except as set forth in this Amendment B, the Original Agreement shall
remain in full force and effect and references in the Original
Agreement to "this Agreement", "hereunder", "herein", "hereof", and
words of like effect shall mean the Original Agreement as so amended
by this Amendment B.

     This Amendment may be executed in one or more counterparts and / or by
facsimile, each of which shall be deemed an original and all of which
signed counterparts, taken together, shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the
Effective Date referenced above.

AGREED TO:                             AGREED TO:
World Am Communications, Inc.          EMPLOYEE

By: /s/  Willis J, Kollars             By: /s/  Jim Alexander
Name: Willis J. Kollars                Name:  Jim Alexander
Title: Secretary/Director              Title: President/Chief Executive Officer

By: /s/  Thomas E. Ferneau
Name: Thomas E. Ferneau
Title: Chief Financial Officer/Director

By: /s/  Al Youngs
Name: Al Youngs
Title: Director

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