Document:

exv10w1

 

Exhibit 10.1

EXECUTION COPY

EXCHANGE AGREEMENT

     This EXCHANGE AGREEMENT (this “Agreement”) is made as of August 26, 2003
(the “Execution Date") by and among HearUSA, Inc. (formerly HEARx Ltd.), a
Delaware corporation (the “Company”) and Zanett Lombardier Master Fund, LLC
(successor to Zanett Lombardier, Ltd.), a Cayman Islands company (“Zanett”) and
The San Miguel Trust, a Jersey Law Trust (“San Miguel”, and, together with
Zanett, the “Investors”).

RECITALS

          A. Pursuant to a Securities Purchase Agreement dated as of August 27, 1998
(the “Original Purchase Agreement”), the Company issued and sold 7,500 shares
of the Company’s 1998 Convertible Preferred Stock, par value $1.00 per share
(the “Original Preferred Stock”), which are convertible into shares of the
Company’s common stock, par value $.10 per share (the “Common Stock”) and
otherwise have the rights, preferences, privileges, powers and restrictions set
forth in a Certificate of Designation (the “Original Certificate of
Designation”) filed with the Secretary of State of Delaware on August 24, 1998.

          B. The Investors currently hold an aggregate of 4,563 shares of the
Original Preferred Stock, constituting all of the now issued and outstanding
Original Preferred Stock.

          C. The term of the Original Preferred Stock matures on August 27, 2003 and
the parties have agreed that it is in their best interests to extend the term
of the Original Preferred Stock.

          D. The Investors and the Company desire that the Investors exchange all of
the currently outstanding Original Preferred Stock for shares of the Company’s
newly designated convertible preferred stock (the “Exchange”), upon the terms
and conditions set forth herein.

          E. The Exchange is intended to qualify as a private placement transaction
under Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”).

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

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ARTICLE I

THE EXCHANGE

          1.1 Closing. Subject to the terms and conditions set forth in this
Agreement, the Company and the Investors shall exchange 4,563 shares of
Original Preferred Stock for 4,563 shares of preferred stock described in
Section 1.3 below (the “Exchange Preferred Stock”). The closing of the
Exchange (the “Closing”) shall take place at the offices of Bryan Cave LLP, 700
Thirteenth Street, N.W., Washington, DC 20005, on August 26, 2003, or such
earlier date as the parties shall agree (the “Closing Date”).

          1.2 Exchange. At the Closing, (i) the Investors shall deliver to, or as
directed by, the Company stock certificates representing the Original Preferred
Stock, and (ii) the Company shall deliver to the Investors stock certificates,
registered in the names of the Investors, representing the Exchange Preferred
Stock allocated among the Investors as specified in Schedule 1.2 hereto.

          1.3 Terms of Exchange Preferred Stock. The Exchange Preferred Stock shall
have the rights, preferences and privileges as set forth in the Certificate of
Designations attached hereto as Exhibit A (the “Exchange Certificate of
Designation”) to be filed prior to the Closing by the Company with the
Secretary of State of Delaware.

          1.4 Original Preferred Stock. Effective on the date of the Closing, all
shares of Original Preferred Stock shall be canceled and the certificates
formerly representing such shares of Original Preferred Stock shall thereafter
represent only the right to receive certificates representing shares of the
Exchange Preferred Stock.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

          2.1 Investor Representations and Warranties. Each Investor hereby
represents and warrants to the Company as follows on the Execution Date and the
Closing Date:

               (a) Organization; Authority. The Investor is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated this Agreement and otherwise to carry
out its obligations hereunder. This Agreement has been duly executed by the
Investor, and when delivered by the Investor in accordance with the terms
hereof, will constitute the valid and legally binding obligation of the
Investor, enforceable against it in accordance with its terms.

               (b) Ownership of Original Preferred Stock. The Investor is the sole owner
of all of the Original Preferred Stock set forth opposite its name on Schedule
2.1(b) hereof, free and clear of any and all liens, claims and encumbrances of
any kind.

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                (c) Investment Intent. The Investor is acquiring the Exchange Preferred
Stock as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Exchange Preferred Stock
or any part thereof, except pursuant to sales that are exempt from the
registration requirements of the Securities Act and/or sales registered under
the Securities Act. The Investor does not have any agreement or understanding,
directly or indirectly, with any person or entity to distribute the Exchange
Preferred Stock.

               (d) Investor Status. At the time the Investor was offered the Exchange
Preferred Stock, it was, and at the date hereof it is, an “accredited investor”
as defined in Rule 501(a) of Regulation D under the Securities Act. The
Investor is not a broker-dealer.

               (e) General Solicitation. The Investor is not acquiring the Exchange
Preferred Stock as a result of or subsequent to any advertisement, article,
notice or other communication regarding the Exchange Preferred Stock published
in any newspaper, magazine or similar media or broadcast over television or
radio or presented at any seminar or any other general solicitation or general
advertisement.

               (f) Ownership of Common Stock. The Investor does not have a short
position in the Common Stock.

               (g) Reliance. The Investor understands and acknowledges that (i) the
Exchange Preferred Stock is being offered and issued to it without registration
under the Securities Act in a transaction that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and the Company will rely upon the accuracy and
truthfulness of, the foregoing representations, and the Investor hereby
consents to such reliance.

               (h) Brokers and Finders. With the exception of Kennebec Resources, Inc.,
a consultant retained, and whose fees are to be paid, by the Company, the
Investor has no knowledge of any person who will be entitled to or make a claim
for payment of any finder fee or other compensation as a result of the
consummation of the transactions contemplated by this Agreement.

          2.2 Company Representations and Warranties. The Company hereby makes the
following representations and warranties to the Investor on the Execution Date
and on the Closing Date:

               (a) Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
The Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction where the nature of the business it
conducts makes such qualification necessary and where the failure to do so
would have a material adverse effect on the Company.

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                (b) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and to issue the Exchange Preferred Stock and
the shares of Common Stock underlying the Exchange Preferred Stock (the
“Conversion Shares”) upon conversion of the Exchange Preferred Stock in
accordance with the terms of the Exchange Certificate of Designations and
otherwise to carry out its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Exchange
Certificate of Designations and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Company’s
Board of Directors. This Agreement and the Exchange Certificate of
Designations have been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligations of the Company enforceable against the Company, in accordance with
their terms.

               (c) Issuance of the Exchange Preferred Stock. The Exchange Preferred
Stock, when issued at the Closing, will be duly authorized, validly issued,
fully paid and non-assessable and will be free and clear of all taxes, liens,
options or other encumbrances of any nature.

               (d) No Conflicts. The execution, delivery and performance of this
Agreement, the performance by the Company of its obligations under the Exchange
Certificate of Designations and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation,
the issuance and reservation for issuance, as applicable, of the Exchange
Preferred Stock and Conversion Shares) will not, (i) result in a violation of
the Company’s Certificate of Incorporation or Bylaws or (ii) except as set
forth on Schedule 2.2(d), conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment (including, without
limitation, the triggering of any anti-dilution provisions), acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including United States federal and state securities laws and
regulations and rules or regulations of any self-regulatory organizations to
which either the Company or its securities are subject) applicable to the
Company or by which any property or asset of the Company is bound or affected.
The Company is not in violation of its Certificate of Incorporation, Bylaws or
other organizational documents. Except as set forth on Schedule 2.2(d), the
Company is not in default (and no event has occurred which, with notice or
lapse of time or both, would put the Company in default) under, nor has there
occurred any event giving others (with notice or lapse of time or both) any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party except for
such violations, defaults or events that have not and could not reasonably be
expected to have, individually or in the aggregate, a material adverse effect.

               (e) SEC Documents, Financial Statements. All reports, schedules, forms,
statements and other documents required to be filed by the Company with the
Securities and Exchange Commission (the “SEC”) pursuant to the reporting
requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) filed before the date
hereof (and together with all financial statements and schedules thereto and
all exhibits included therein and documents incorporated by reference therein,
the “SEC Documents”) have been timely filed by the Company (within applicable

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extension periods) since July 31, 2002. With respect to SEC Documents filed on
or after July 31, 2002, as of their respective dates, such SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time each was filed with
the SEC, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC Documents is, or
has been, required to be amended or updated under applicable law (except for
such statements as have been amended or updated in subsequent filings made
prior to the date hereof). As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC applicable with respect thereto. Such
financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”), consistently applied during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to immaterial year-end audit adjustments). The Company
has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to the date of such
financial statements and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under GAAP to be
reflected in such financial statements, which liabilities and obligations
referred to in clauses (i) and (ii), individually or in the aggregate, are not
material to the financial condition or operating results of the Company.

               (f) Status of Investors. The Company acknowledges and agrees that each
Investor has independently determined to enter into, and no Investor is acting
in concert with any other Investor in entering into, this Agreement and the
transactions contemplated hereby, and that no Investor is (i) an officer or
director of the Company; (ii) an “affiliate” of the Company (as defined in Rule
144 of the Securities Act); or (iii) a “beneficial owner” of more than 5% of
the Common Stock (as defined for purposes of Rule 13d-3 of the Exchange Act.)

               (g) Absence of Certain Changes. Since December 31, 2002, there has been
no material adverse change and no material adverse development in the business,
properties, operations, prospects, financial condition or results of operations
of the Company, except as disclosed in the SEC Documents filed prior to the
date hereof. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy or
receivership law nor does the Company have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings with
respect to the Company.

               (h) Certain Fees. Except for certain compensation payable to Kennebec
Resources, Inc. by the Company, no fees or commissions will be payable by the
Company to any

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broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.

ARTICLE III

OTHER COVENANTS

          3.1 Standstill Arrangement; Restrictions on Transfer.

               (a) Except as provided in subparagraph (b) below, each Investor agrees
that from the date hereof until November 1, 2005 (the “Standstill Period”), it
shall not tender a Notice of Conversion (as defined in the Exchange Certificate
of Designation) to the Company or otherwise take any other action for the
purpose of effecting an Optional Conversion (as defined in the Exchange
Certificate of Designation) of the Exchange Preferred Stock. Each Investor
agrees that it will not sell, transfer, encumber or otherwise dispose of any
shares of the Exchange Preferred Stock or the Conversion Shares until November
1, 2005, except as provided in subparagraph (b) below.

               (b) The foregoing notwithstanding and except in the case of a Payment
Default (as defined below), the parties agree that if at any time on or after
December 10, 2004 through and including November 1, 2005, the Company’s Common
Stock trades at or above $3.00 per share (subject to equitable adjustment in
the event of any stock split, stock combination or similar event affecting the
Common Stock) during any trading day as reported by the AMEX, the Investors
collectively may thereafter convert pursuant to the Exchange Certificate of
Designations, that number of shares of Exchange Preferred Stock which will
yield on conversion up to, but not exceeding, 744,911 shares of Common Stock,
provided that (i) on the day that the notice of conversion is tendered by the
Investor(s) to the Company, the Common Stock has traded on the AMEX at or above
$3.00 per share prior to such conversion(s); and (ii) any resale of such shares
of Common Stock by the Investors before November 1, 2005, will be at or above
$3.00 per share. In addition, in the event the Company shall default in the
payment of Premiums (as defined in the Exchange Certificate of Designation) as
provided in Section 3.2 and such default has not been cured within 5 business
days of the due date of such payment (a “Payment Default”), the Investors shall
be excused from their obligations under Section 3.1(a) above and may thereafter
sell any shares of the Exchange Preferred Stock or convert such shares of
Exchange Preferred Stock pursuant to the Exchange Certificate of Designation
until such time as such Payment Default is cured, provided that a Notice of
Conversion (as defined in the Exchange Certificate of Designation) has not be
sent by an Investor prior to such cure.

          3.2 Payment of Premium. The Company shall make the payments to the
Investors by wire transfer of immediately available funds to the account(s)
designated in writing by the Investors in the amounts and at the times set
forth on Schedule 3.2 attached hereto, subject to adjustment of the amount of
such payments from time to time to reflect any conversion of the Exchange
Preferred Stock as permitted under Section 3.1(b) or after termination of the
Standstill
Period and any payment of Premium pursuant to the Exchange Certificate of
Designation. Payments shall be applied first to the accrued and unpaid Premium
(as defined in

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the Original Certificate of Designation) on the Original
Preferred Stock as of the Closing Date and then shall be applied to the accrued
Premium (as defined in the Exchange Certificate of Designation) on the Exchange
Preferred Stock. The Company and the Investors acknowledge and agree that the
amount of such Premium accrued and unpaid on the Original Preferred Stock as of
the Closing Date and the amounts that will accrue on the Exchange Preferred
Stock between the Closing Date and the Mandatory Redemption Date (as defined in
the Exchange Certificate of Designation) are as set forth on Schedule 3.2
attached hereto.

          3.3 Securities Laws. Each Investor acknowledges that the Exchange
Preferred Stock and the Common Stock issuable upon conversion thereof have not
been registered under the Securities Act and may only be disposed of pursuant
to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act.

          3.4 Restrictive Legend. Each Investor agrees to the imprinting of the
following legend on the Exchange Preferred Stock:

		
	 	     THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION, AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

          3.5 Short Sales. For so long as it holds shares of Common Stock or
Exchange Preferred Stock, each Investor agrees that it will not at any time
hold a net short position in the Common Stock.

          3.6 AMEX Listing; Stockholder Approval. In the event the Investor(s)
exercise its right of conversion of the Exchange Preferred Stock, the Company
shall use its best efforts to list the shares of Common Stock issuable on such
conversion on the American Stock Exchange (“AMEX”), if the Common Stock is then
listed for trading on the AMEX, or on such other exchange or automated
quotation system where the Company’s common stock may be listed. The parties
hereto acknowledge that because the Company is subject to the rules of the AMEX
in respect of the listing of the Company’s Common Stock on the AMEX, the
Company may not undertake to issue on conversion of the Exchange Preferred
Stock a number of shares of Common Stock in excess of 19.99% of the issued and
outstanding Common Stock of the Company without first obtaining the approval of
the Company’s stockholders. The Company agrees that it shall use its best
efforts to obtain, upon the earlier to occur of the date upon which it commits
a second Payment Default (whether consecutive or otherwise) or prior to January
10, 2006, approval of the stockholders to permit the issuance of sufficient shares
of Common Stock to effect the conversion of all the shares of Exchange
Preferred Stock then outstanding. In the event such approval is not promptly
obtained, the Company will redeem such unconverted Exchange Preferred Stock in
accordance with the terms of the Exchange Certificate of Designation.

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          3.7 Reservation of Shares. The Company shall at all times have authorized
and reserved for the purpose of issuance a sufficient number of Conversion
Shares.

          3.8 Eligibility for Rule 144. The Company represents and warrants that as
of the date hereof the Exchange Preferred Stock and the Conversion Shares are
available for resale pursuant to Rule 144 of the Exchange Act. The Company
shall file all reports and statements required to be filed by the Company with
the SEC in a timely manner and take all other steps necessary on its part so as
to thereafter maintain such eligibility under Rule 144.

ARTICLE IV

MISCELLANEOUS

          4.1 Fees and Expenses. Except as set forth in this Section 4.1, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay the legal fees of Klehr Harrison of up to
$2,000 and of Drinker Biddle & Reath LLP (counsel to Zanett) of up to $25,000.
The Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Exchange Preferred Stock. In addition, the Company
shall reimburse Zanett on behalf of the Investors on the first business day of
each calendar year after the Closing Date Zanett’s out-of-pocket and overhead
expenses for the prior calendar year through calendar year 2005 associated with
the monitoring of the Exchange Preferred Stock not to exceed $12,500 for the
remainder of calendar year 2003, $50,000 for calendar year 2004 and $37,500 for
calendar year 2005 upon presentation to the Company of documentation of such
expenses.

          4.2 Entire Agreement; Amendments. This Agreement, together with the
exhibits and schedules hereto, contains the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.

          4.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 5:00 p.m. (New York City time) on a business
day, against electronic confirmation thereof, (ii) the business day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Agreement later
than 5:00 p.m. (New York City time) on any date, against electronic
confirmation thereof, (iii) the business day following the
date of mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:

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If to the Company:
	 	HearUSA, Inc.

1250 Northpoint Parkway

West Palm Beach, FL 33407

Facsimile No.: (561) 688-8883

Attn: Chief Executive Officer
	 	 	 	 	 
	 	 	
With copies to:
	 	Bryan Cave LLP

700 Thirteenth Street, N.W.

Suite 700

Washington, DC 20005-3960

Facsimile No.: (202) 508-6200

Attn: LaDawn Naegle, Esq.
	 	 	 	 	 
	 	 	
If to the Investors:
	 	Zanett Lombardier Master Fund, LLC

c/o Olympia Capital (Cayman) Limited

Williams House

20 Reid Street

Hamilton HM 11 Bermuda

Facsimile: 1 441-295-2305

Attn: Lisa Ty
	 	 	 	 	 
	 	 	 	 	and
	 	 	 	 	 
	 	 	 	 	The San Miguel Trust

c/o IMT Fiduciary Services Ltd.

2nd Floor

P.O. Box 127

Commercial House/Commercial Street

St. Helier Jersey, Channel Islands

JE48QS

Facsimile: 44 1534-883699

Attn: Susan Etienne
	 	 	 	 	 
	 	 	
With copies to:
	 	Drinker Biddle & Reath LLP

One Logan Square

18th and Cherry Streets

Philadelphia, PA 19103-6996

Facsimile No.: (215) 557-9162

Attn: Stephen T. Burdumy, Esq.

or such other address as may be designated in writing hereafter, in the same
manner, by such person or entity.

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          4.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and by a majority of the Investors or, in the case of a waiver, by
the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.

          4.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

          4.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
No Investor may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company.

          4.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity.

          4.8 Governing Law. The corporate laws of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.

          4.9 Survival. The representations and warranties contained herein shall
survive until the expiration of the first anniversary following the Closing.
The agreements and covenants contained herein shall survive the Closing.

          4.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that all
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature page were an original thereof.

          4.11 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and
the parties will attempt to agree upon a valid and enforceable provision
which shall be a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.

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          4.12 Further Assurances. The parties hereto agree that each shall execute
and deliver any and all further agreements, instruments, certificates and other
documents, and shall take any and all action, as any of the parties hereto may
reasonably deem necessary or desirable in order to carry out the intent of the
parties to this Agreement.

          4.13 Press Releases. The Company and the Investors shall consult with each
other in issuing any press releases or otherwise making public statements or
filings and other communications with the Securities and Exchange Commission or
any regulatory agency with respect to the transactions contemplated hereby, and
neither party shall issue any such press release or otherwise make any such
public statement, filing or other communication without the prior consent of
the other, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement, filing or other communication. The parties agree that,
within two (2) business days after the Closing, the Company shall file with the
Securities and Exchange Commission a Form 8-K concerning this Agreement and the
transactions contemplated hereby in the form attached as Exhibit B hereto, to
which this Agreement and the Exchange Certificate of Designations shall be
attached as exhibits.

          4.14 Attorneys’ Fees. If either party shall commence an action or
proceeding to enforce any provisions relating to the obligations to close the
transactions contemplated by this Agreement prior to the Closing, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

[Signatures appear on the next page.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Exchange Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

	 	 	 	 	 
	 	 	HEARUSA, INC.
	 	 	 	 	 
	 	 	
By:	 	/s/ Stephen J. Hansbrough
	 	 	 	 	

	 	 	 	 	Stephen J. Hansbrough

Chief Executive Officer
	 	 	 	 	 
	 	 	ZANETT LOMBARDIER MASTER FUND, LLC
	 	 	 	 	 
	 	 	
By:	 	/s/ G.A. Cicogna
	 	 	 	 	

	 	 	
Name:	 	Gianluca Cicogna
	 	 	 	 	

	 	 	
Title:	 	Authorized Signatory
	 	 	 	 	

	 	 	 	 	 
	 	 	THE SAN MIGUEL TRUST
	 	 	 	 	 
	 	 	
By:	 	IMT Fiduciary
Services Limited, as Trustee
/s/ S. Etienne
	 	 	 	 	

	 	 	
Name:	 	Susan Etienne
	 	 	 	 	

	 	 	
Title:	 	Authorized Signatory
	 	 	 	 	

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Exchange Agreement

Investors Holdings

Schedule 2.1(b)

	 	 	 
	Zanett Lombardier Master Fund, LLC	 	
2663 shares of Original Preferred Stock
	The San Miguel Trust	 	
1900 shares of Original Preferred Stock

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Exchange Agreement

Conflicts

Schedule 2.2(d)

Approval of the Company’s stockholders may be required by the rules of the
American Stock Exchange to issue shares of Common Stock or securities
convertible in Common Stock if the Common Stock to be issued has voting power
that is 20% or more of the voting power outstanding before such Common Stock or
securities are issued.

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Exchange Agreement

Premium; Payments

Schedule 3.2

	1)	 	Accrued and Unpaid Premiums on Original Preferred Stock:

	 	 	 	 	 
	Period	 	Amount
	
	 	

	As of July 31, 2003:
	 	$	1,245,826.00	 
	 
	From August 1, 2003 to Closing (August 26, 2003): 
	 	$	36,253.97	 

	2)	 	Premiums on Exchange Preferred Stock:

	 	 	 	 	 
	Period	 	Amount
	
	 	

	From Closing to December 31, 2003
	 	$	158,350.70	 
	From January 1, 2004 to December 31, 2004
	 	$	456,300.00	 
	From January 1, 2005 to December 31, 2005
	 	$	456,300.00	 
	From January 1, 2006 to December 18, 2006
	 	$	439,527.33	 

	3)	 	Schedule of Payments:

	 	 	 	 	 
	Payment Date	 	Amount
	
	 	

	November 26, 2003 (90 days after Closing)
	 	$	636,517	 
	December 18, 2003
	 	$	100,000	 
	January 18, 2003
	 	$	100,000	 
	February 18, 2003
	 	$	100,000	 
	March 18, 2004
	 	$	100,000	 
	April 18, 2004
	 	$	100,000	 
	May 18, 2004
	 	$	100,000	 
	June 18, 2004
	 	$	100,000	 
	July 18, 2004
	 	$	100,000	 
	August 18, 2004
	 	$	38,025	 
	September 18, 2004
	 	$	76,050	 
	October 18, 2004
	 	$	76,050	 

15

 

	 	 	 	 	 
	Payment Date	 	Amount
	
	 	

	November 18, 2004
	 	$	76,050	 
	December 18, 2004
	 	$	38,025	 
	January 18, 2005
	 	$	100,000	 
	February 18, 2005
	 	$	90,125	 
	March 18, 2005
	 	$	38,025	 
	April 18, 2005
	 	$	38,025	 
	May 18, 2005
	 	$	38,025	 
	June 18, 2005
	 	$	38,025	 
	July 18, 2005
	 	$	38,025	 
	August 18, 2005
	 	$	38,025	 
	September 18, 2005
	 	$	38,025	 
	October 18, 2005
	 	$	38,025	 
	November 18, 2005
	 	$	38,025	 
	December 18, 2005
	 	$	38,025	 
	January 18, 2006
	 	$	38,025	 
	February 18, 2006
	 	$	38,025	 
	March 18, 2006
	 	$	38,025	 
	April 18, 2006
	 	$	38,025	 
	May 18, 2006
	 	$	38,025	 
	June 18, 2006
	 	$	38,025	 
	July 18, 2006
	 	$	38,025	 
	August 18, 2006
	 	$	38,025	 
	September 18, 2006
	 	$	38,025	 
	October 18, 2006
	 	$	38,025	 
	November 18, 2006
	 	$	38,025	 
	December 18, 2006
	 	$	63,191	 

16exv4w1

 

Exhibit 4.1

CERTIFICATE OF CORPORATE RESOLUTION

OF THE BOARD OF DIRECTORS

OF W HOLDING COMPANY, INC.

DESIGNATING

6.90% NONCUMULATIVE MONTHLY INCOME PREFERRED STOCK,

2003 SERIES G,

PAR VALUE $1.00 PER SHARE

(LIQUIDATION PREFERENCE $25 PER SHARE)

     WHEREAS, the Certificate of Incorporation (the “Charter”) of W Holding
Company, Inc. (the “Company”) authorizes the issuance of 20,000,000 shares of
the Company’s preferred stock, par value $1.00 per share (“Preferred Stock”),
in one or more series, and authorizes the Board of Directors to fix by
resolution or resolutions the designation of each series of Preferred Stock and
the powers, preferences and relative, participation, optional or other special
rights, and qualifications, limitations or restrictions thereof;

     WHEREAS, as of the date hereof, 12,973,405 shares of Preferred Stock are
issued and outstanding; and

     WHEREAS, the Board of Directors of the Company has determined that the
preferences and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions of the 6.90% Noncumulative Monthly
Income Preferred Stock, 2003 Series G, liquidation preference $25 per share,
stated and expressed herein are, under the circumstances prevailing at this
time, fair and equitable to all existing stockholders;

     NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors, in accordance
with the provisions of the Charter, hereby approves the issuance of 6.90%
Noncumulative Monthly Income Preferred Stock, 2003 Series G, liquidation
preference $25 per share, par value $1.00 per share, of the Company and fixes
the designation of such 6.90% Noncumulative Monthly Income Preferred Stock,
2003 Series G, liquidation preference $25 per share, and the powers,
preferences, rights, and qualifications, limitations and restrictions thereof,
in addition to those set forth in the Charter, as follows:

	 	1.	 	Designation; Ranking.

     (a)       The designation of such series of Preferred Stock shall be “6.90%
Noncumulative Monthly Income Preferred Stock, 2003 Series G” (hereinafter
referred to as “Series G Preferred Stock”), and the number of shares
constituting such series shall be 3,036,000, which number may be
increased (but not above the total number of shares of authorized Preferred
Stock) or decreased (but not below the number of shares of Series G Preferred
Stock then outstanding) from time to time by the Board of Directors.

 

 

     (b)       The Series G Preferred Stock will, with respect to dividend rights and
rights on liquidation, rank (i) senior to all classes of common stock of the
Company, par value $1.00 per share (the “Common Stock”) and to all other equity
securities issued by the Company the terms of which specifically provide that
such equity securities will rank junior to the Series G Preferred Stock (or to
all series of the Preferred Stock in general) as to dividends and the
distribution of assets upon liquidation (the Common Stock, together with such
other equity securities, being hereinafter referred to as “Junior Stock”); (ii)
on a parity with the Company’s 7.125% Non-Cumulative, Convertible Preferred
Stock, Series A, the Company’s 7.25% Noncumulative Monthly Income Preferred
Stock, 1999 Series B, the Company’s 7.60% Noncumulative Monthly Income
Preferred Stock, 2001 Series C, the Company’s 7.40% Noncumulative Monthly
Income Preferred Stock, 2001 Series D, the Company’s 6.875% Noncumulative
Monthly Income Preferred Stock, 2002 Series E and the Company’s 6.70%
Noncumulative Monthly Income Preferred Stock, 2003 Series F, and all other
equity securities issued by the Company the terms of which specifically provide
that such equity securities will rank on a parity to the Series G Preferred
Stock as to dividends or the distribution of assets upon liquidation (“Parity
Stock”); and (iii) junior to all equity securities issued by the Company the
terms of which specifically provide that such equity securities will rank
senior to the Series G Preferred Stock as to dividends or the distribution of
assets upon liquidation. For this purpose, the term “equity securities” does
not include debt securities convertible into or exchangeable for equity
securities.

     (c)       The Company may not issue capital stock ranking, as to dividend rights
or rights on liquidation, senior to the Series G Preferred Stock except with
the consent of the holders of at least two-thirds of the aggregate liquidation
preference of the Series G Preferred Stock and any series of Parity Stock at
the time outstanding.

	 	2.	 	Dividend Rights.

     (a)       The holders of Series G Preferred Stock shall be entitled to receive
when, as and if declared by the Board of Directors of the Company, out of
assets of the Company legally available therefor, cash dividends, accruing from
the date of original issuance (the “Issue Date”) at the annual rate per share
of 6.90% of the liquidation preference of $25 per share (equivalent to $1.725 per share per annum) (the “Dividends”), payable, when, as and if declared by
the Board of Directors, monthly in arrears on the 15th day of each month (each
monthly period ending on any such date being hereinafter referred to as a
“dividend period”), at such annual rate. Dividends in each dividend period
shall accrue from the first day of such period, whether or not declared or paid
for the prior dividend period (except that the first Dividends payable after
the Issue Date shall accrue from the Issue Date). Each declared Dividend shall
be payable to holders of record as they appear at the close of business on the
stock register of the Company on such record dates, not exceeding 45 days
preceding the payment dates thereof, as shall be fixed by the

 

 

Board of Directors of the Company. Dividends (1) for any period other
than a full dividend period, will be computed on the basis of a 360-day year
consisting of twelve 30-day months and (2) for each full dividend period, will
be computed by dividing the annual dividend rate by 12.

     (b)       Dividends shall be noncumulative. The Company is not obligated or
required to declare or pay Dividends, even if it has funds available for the
payment of such dividends. If the Board of Directors of the Company or an
authorized committee thereof does not declare a Dividend payable on a dividend
payment date, then the holders of such Series G Preferred Stock shall have no
right to receive a Dividend in respect of the dividend period ending on such
dividend payment date, and the Company will have no obligation to pay a
Dividend accrued for such dividend period or to pay any interest thereon,
whether or not dividends on such Series G Preferred Stock or the Common Stock
are declared for any future dividend period.

     (c)       If all Dividends due and payable for each of the twelve previous
monthly dividend periods (or such fewer dividend periods as there actually are)
shall not have been declared and paid, or declared and a sum sufficient for the
payment thereof shall not have been set apart for such payments, or the Company
has defaulted on the payment of the redemption price of any Series G Preferred
Stock called for redemption, no dividends shall be declared or paid or set
aside for payment and no other distribution shall be declared or made or set
aside for payment upon the Junior Stock, nor shall any Junior Stock be
redeemed, purchased or otherwise acquired for any consideration (or any monies
to be paid to or made available for a sinking fund for the redemption of any
such stock) by the Company (except by conversion into or exchange for other
Junior Stock).

     (d)       When Dividends and dividends upon any Parity Stock are not paid in
full (or a sum sufficient for such full payment is not set apart), all
dividends declared upon the Series G Preferred Stock and any Parity Stock will
be declared pro rata so that the amount of Dividends and dividends upon the
other series of capital stock will in all cases bear to each other the same
ratio that full Dividends, for the then-current dividend period (which will not
include any accumulation in respect of unpaid Dividends for prior dividend
periods), and full dividends, including required or permitted accumulations, if
any, on the Parity Stock, bear to each other.

     (e)       Subject to any applicable laws and regulations, each Dividend payment
will be made by U.S. dollar check drawn on a bank in New York, New York or San
Juan, Puerto Rico and mailed to the record holder thereof at such holder’s
address as it appears on the register for such Series G Preferred Stock.

	 	3.	 	Liquidation Preferences.

 

 

     (a)       In the event of any liquidation of the Company, whether voluntary or
involuntary, the holders of Series G Preferred Stock shall be entitled to
receive out of the assets of the Company available for distribution to
shareholders an amount equal to $25 per share, plus accrued and unpaid
dividends, if any, for the then-current monthly dividend period to the date of
payment, and no more (the “Liquidation Preference”), before any distribution
shall be made to the holders of Junior Stock. After payment of the full amount
of such liquidating distributions, the holders of Series G Preferred Stock will
not be entitled to any further participation in any distribution of the
remaining assets of the Company.

     (b)       If the assets of the Company available for distribution to
shareholders upon any liquidation of the Company, whether voluntary or
involuntary, shall be insufficient to pay in full the amounts payable with
respect to the Series G Preferred Stock and any Parity Stock, the holders of
Series G Preferred Stock and Parity Stock shall share ratably in any
distribution of assets of the Company in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

     (c)       The merger or consolidation of the Company with or into any other
entity, the merger or consolidation of any other entity with or into the
Company, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation of the Company within the meaning of this Section 3.

	 	4.	 	No Maturity Date or Mandatory Redemption.

The Series G Preferred Stock will not mature on a specified date and is not
subject to any mandatory redemption, sinking fund or similar obligation.
Holders will have no right to require the Company to repurchase or redeem any
shares of Series G Preferred Stock.

	 	5.	 	Redemption.

     (a)       Holders of the Series G Preferred Stock will have no right to require
the Company to redeem or repurchase the Series G Preferred Stock and such
shares are not subject to any sinking fund or similar obligation.

     (b)       The Series G Preferred Stock will not be redeemable, in whole or in
part, before August 29, 2008. After August 29, 2008, the Series G Preferred
Stock will be redeemable at the option of the Company, at any time or from time
to time, upon not less than 30 nor more than 60 days’ notice by mail, at the
following redemption prices, plus accrued and unpaid dividends, if any, for the
then-current dividend period to the date fixed for redemption:

 

 

	 	 	 	 	 
	Year	 	Redemption
	 	 	Price
	 	 	

	 	 	 	 	 
	2008
	 	$	25.50	 
	2009
	 	$	25.25	 
	2010 and thereafter
	 	$	25.00	 

     (c)      If less than all of the outstanding shares of the Series G Preferred
Stock are to be redeemed at the option of the Company, the total number of
shares to be redeemed in such redemption shall be determined by the Board of
Directors, and the shares to be redeemed shall be allocated pro rata or by lot
as may be determined by the Board of Directors or by such other method as the
Board of Directors may approve and deem fair and appropriate, including any
method to conform to any rule or regulation of any national or regional stock
exchange or automated quotation system upon which the shares of the Series G
Preferred Stock may at the time be listed or eligible for quotation; provided
that, the shares of a holder must be redeemable in full unless the Company
obtains a ruling from the Puerto Rico Treasury Department or an opinion from
reputable counsel knowledgeable in Puerto Rico income tax matters to the effect
that the redemption in part of the holder’s shares is not equivalent to a
dividend under Puerto Rico law.

     (d)      Notice of any redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the date fixed
for redemption to each holder of record of the Series G Preferred Stock to be
redeemed, at their respective addresses appearing on the stock books of the
Company. Notice so mailed shall be conclusively presumed to have been duly
given whether or not actually received, and failure to duly give such notice by
mail, or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Series G Preferred Stock. Such notice shall state: (i)
the Redemption Date; (ii) the redemption price; (iii) the number of shares of
Series G Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be so redeemed
from such holder; (iv) the place where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that after such
Redemption Date the shares to be redeemed shall not accrue dividends. If such
notice is mailed as aforesaid, and if on or before the Redemption Date funds
sufficient to redeem the shares called for redemption are set aside by the
Company in trust for the account of the holders of the shares to be redeemed,
notwithstanding the fact that any certificate for shares called for redemption
shall not have been surrendered for cancellation, on and after the Redemption
Date the shares represented thereby so called for redemption shall be deemed to
be no longer outstanding, dividends thereon shall cease to accrue, and all
rights of the holders of such shares as stockholders of the Company shall
cease, except the right to receive the redemption price, without interest, upon
surrender of the certificate representing such shares. Upon surrender in
accordance with the

 

 

aforesaid notice of the certificate for any shares so redeemed (duly
endorsed or accompanied by appropriate instruments of transfer, if so required
by the Company in such notice), the holders of record of such shares shall be
entitled to receive the redemption price, without interest. In case fewer than
all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.

     (e)       At its option, the Company may, on or prior to the Redemption Date,
irrevocably deposit the aggregate amount payable upon redemption of the shares
of the Series G Preferred Stock to be redeemed with a bank or trust bank
designated by the Company having its principal office in New York, New York,
San Juan, Puerto Rico, or any other city in which the Company shall at that
time maintain a transfer agent with respect to its capital stock, and having a
combined capital surplus (as shown by its latest published statement) of at
least $50,000,000 (hereinafter referred to as the “Depository”), to be held in
trust by the Depository for payment to the holders of the Series G Preferred
Stock to be redeemed. If such deposit is made and the funds so deposited are
made immediately available to the holders of the Series G Preferred Stock to be
redeemed, the Company shall thereupon be released and discharged (subject to
the provisions described in the next paragraph) from any obligation to make
payment of the amount payable upon redemption of the Series G Preferred Stock
to be redeemed, and the holders of such shares shall look only to the
Depository for such payment.

     (f)       Any funds remaining unclaimed at the end of two years from and after
the Redemption Date in respect of which such funds were deposited shall be
returned to the Company forthwith and thereafter the holders of the Series G
Preferred Stock called for redemption with respect to which such funds were
deposited shall look only to the Company for the payment of the redemption
price thereof. Any interest accrued on any funds deposited with the Depository
shall belong to the Company and shall be paid to it from time to time on
demand. Any of the Series G Preferred Stock which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued preferred shares, without designation as to series, until such shares
are once more designated as part of a particular series by the Board of
Directors.

     (g)       To the extent required to have the Series G Preferred Stock treated as
Tier 1 capital for bank regulatory purposes or otherwise required by applicable
regulations of the Federal Reserve Board, the shares of Series G Preferred
Stock may not be redeemed by the Company without the prior consent of the Board
of Governors of the Federal Reserve System.

	 	6.	 	Voting Rights.

 

 

     (a)       Except as expressly required by applicable law, or except as indicated
below, the holders of the Series G Preferred Stock will not be entitled to
receive notice of, or attend or vote at, any meeting of the stockholders of the
Company.

     (b)       If at the time of any annual meeting of the Company’s stockholders for
the election of directors, the Company has failed to pay or declare and set
aside for payment a monthly Dividend for each of the 18 preceding monthly
dividend periods, the number of directors then constituting the Board of
Directors of the Company shall be increased by one (if not already increased by
one due to a default in preference dividends), and at such annual meeting the
holders of the Series G Preferred Stock, along with the holders of any other
series of Preferred Stock which may have voting rights due to the Company’s
failure to pay dividends, will be entitled to elect such additional director to
serve on the Company’s Board of Directors. Such director elected by the
holders of the Series G Preferred Stock and any other Preferred Stock shall
continue to serve as director until the earlier of (i) the full term for which
he or she shall have been elected or (ii) the payment of twelve consecutive
monthly Dividends.

     (c)       Unless the vote or consent of the holders of a greater number of
shares is then required by law, the affirmative vote or consent of the holders
of at least two-thirds of the aggregate liquidation preference of the Series G
Preferred Stock and of the shares of any Parity Stock at the time outstanding,
given in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of Series G Preferred Stock and any such
other series of Parity Stock will vote together as a single class without
regard to series, will be necessary for authorizing, effecting or validating
any variation or abrogation of the powers, preferences, rights, privileges,
qualifications, limitations and restrictions of the Series G Preferred Stock or
any such other series of Parity Stock by way of amendment, alteration or repeal
of any of the provisions of the Charter of the Company, or of any amendment or
supplement thereto, or otherwise (including any certificate of amendment or any
similar document relating to any series of Company preferred stock).
Notwithstanding the foregoing, the Company may, without the consent or sanction
of the holders of Series G Preferred Stock, authorize or issue capital stock of
the Company ranking, as to dividend rights and rights on liquidation, winding
up and dissolution, on a parity with or junior to the Series G Preferred Stock.

     (d)       Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the affirmative vote or consent of the
holders of at least two-thirds of the aggregate liquidation preference of the
Series G Preferred Stock and any other series of Parity Stock at the time
outstanding, given in person or by proxy, either in writing or by a vote at a
meeting called for the purpose at which the holders of Series G Preferred Stock
and any such other series of Parity Stock shall vote together as a single class
without regard to series, shall be necessary to create, authorize or issue, or
reclassify any authorized capital stock of

 

 

the Company into, or create, authorize or issue any obligation or security
convertible into or evidencing a right to purchase, any shares of any class of
stock of the Company ranking prior to both the Series G Preferred Stock and any
other series of Parity Stock. Subject to the foregoing, the Company’s Charter
may be amended to increase the number of authorized shares of Preferred Stock
without the vote of the holders of Preferred Stock, including the Series G
Preferred Stock. No vote of the holders of the Series G Preferred Stock and
any other series of Parity Stock will be required for the Company to redeem or
purchase and cancel the Series G Preferred Stock in accordance with the Charter
or this Certificate of Corporate Resolution for the Series G Preferred Stock.

     7.          Conversion. The Series G Preferred Stock will not be convertible into
or exchangeable for any other securities of the Company.

     8.          Replacement or Lost Certificates. If any certificate for a share of
Series G Preferred Stock is mutilated or alleged to have been lost, stolen or
destroyed, a new certificate representing the same share shall be issued to the
holder upon request subject to delivery of the old certificate or, if alleged
to have been lost, stolen or destroyed, subject to compliance with such
conditions as to evidence, indemnity and the payment of out-of-pocket expenses
of the Company in connection with the request, as the Board of Directors of the
Company may determine.

     9.          No Preemptive Rights. Holders of Series G Preferred Stock will have no
preemptive or preferential rights to purchase any securities of the Company.

 

 

     IN WITNESS WHEREOF, the undersigned hereby certify that the above
resolutions were duly adopted by the Board of Directors of the Company on
August 28, 2003.

	 	By: /s/ Frank C. Stipes

Name: Frank C. Stipes

Title: President

	 	By: /s/ Cesar A. Ruiz

Name: Cesar A. Ruiz

Title: Secretary

     Affidavit No. 195

     Sworn and subscribed before me by Frank C. Stipes, of legal age, married,
President of W Holding Company, Inc. and a resident of Mayaguez, Puerto Rico,
and Cesar A. Ruiz, of legal age, married, Secretary of W Holding Company, Inc.
and a resident of Mayaguez, Puerto Rico, to me personally known.

     In Mayaguez, Puerto Rico, on the 28th day of August, 2003.

 

	 	   /s/
Notary Public

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