EXHIBIT 4.2
CONSULTING AGREEMENT
This Agreement is entered into this 15th day of November, 2001, by and
between Unity Wireless Corporation, a Delaware corporation, having its principal
place of business at 0000 Xxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0,
Xxxxxx ("Client") and Xxxxxxx & Company, a New Jersey corporation, having its
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
X.X.X. ("Consultant").
1. NATURE OF AGREEMENT
This non-exclusive Agreement is between independent contracting parties,
and Consultant acknowledges and warrants that Consultant's relationship with
Client pursuant hereto will be solely as an independent contractor. Nothing
herein shall be construed as creating a relationship of employer and employee
between Client and Consultant, or between Client and any of Consultant's
employees.
2. SERVICES
(a) The scope of the project to be performed hereunder by Consultant shall
be as follows:
(i) reviewing and advising on the managerial and marketing
requirements of the Client;
(ii) reviewing and advising on the budget, business plans and any
other corporate material of the Client;
(iii) conducting a search for specific acquisition or strategic
partnership candidates for consideration by the Client,
(iv) assist the Client in evaluating the strategic fit of the proposed
candidates with the Client's business plan,
(v) take an active role in advancing the selected potential candidates
toward a successful agreement.
(vi) preparing written and verbal reports identifying progress against
objectives and issues for action by the Client, and
(vii) participating in meetings and telephone conferences with the
Client to review such progress reports.
(b) Notwithstanding the above, the Consultant shall:
(i) make no representations to potential investors or third parties
modifying the terms and conditions of Client's Product(s) warranty or
warranties. The Consultant may rely on such Product(s) warranties as may be
furnished to the Consultant by the Client or as may be provided in the Uniform
Commercial Code and inform potential investors and third parties of such
warranties, if required in the course of performing its services hereunder.
(ii) not represent itself as an agent of the Client and will not make
any representations or commitments on behalf of the Client without the prior
written consent of the Client.
(iii) not engage or participate in any "Securities Distributions"
which would be subject to Rule 2710, et. seq. of the Rules and Regulations of
the National Association of Securities Dealers (the "Rules") or any "Offering of
Direct Participation Programs as defined in Rule 2810 of the Rules. The parties
acknowledge that Client may offer to sell securities in a manner not involving
any public offering within the ambit of the United States federal securities
laws, particularly the Securities Act of 1933, as amended, and that Consultant
may advise Client in connection with that activity.
(c) The Consultant shall not be required to devote its full time and
attention to the performance of its duties under this Agreement, but shall
devote only so much of its time and attention as it deems reasonable or
necessary for such purposes. The Consultant shall be available to perform its
services under this Agreement in New York City or elsewhere, as reasonably and
mutually agreed upon by the Client and the Consultant.
3. ASSIGNED EMPLOYEES
(a) The Consultant designates, and will provide and make available the
services of, Xxxx Xxxxxxx, to perform the services and to exercise the
responsibilities required of the Consultant under this Agreement.
(b) The Consultant may, at its own discretion and at its own cost and
expense, employ, retain or contract with such persons, firms and corporations as
the Consultant may select in order to provide the Consultant's Services. The
Consultant will bear the sole, exclusive and complete responsibility for the
activities and remuneration of persons, firms and corporations engaged
thereunder.
4. COMPENSATION
(a) The Client shall pay the Consultant for the Consultant's Services
during the term of this Agreement, by the vesting of the First Warrant, being a
warrant entitiling the Consultant to purchase up to 100,000 shares of common
stock of the Client at an exercise price of $0.38 ("First Warrant") as described
in Schedule A and the Second Warrant being a warrant entitiling the Consultant
to purchase up to 150,000 shares of common stock of the Client at an exercise
price of $0.29 ("Second Warrant") as described in Schedule B. To the extent
permitted by law, there shall be no withholding or payroll taxes respecting the
Warrant. The entire compensation payable to the Consultant under this Agreement
is specified in this Section 4. The Consultant shall not be reimbursed or
otherwise compensated for its expenses.
(b) Notwithstanding the above and the vesting schedules set forth in
Schedules A and B, any unvested warrant rights shall immediately vest if:
(i) the Client terminates this Agreement pursuant to Section 5(b)(i)
below or
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(ii) if the performance of the Consultant's services results in an
"Extraordinary Event" (as such event is reasonably and mutually agreed upon by
the parties) to the benefit of the Client. The Consultant's obligation ceases
once all unvested Warrant rights have been vested.
(c) Unless this Agreement was terminated by the parties in accordance with,
and subject to the provisions of, Section 5, below, the Consultant may exercise
any vested Warrant rights at any time and from time to time within one year from
the date of the expiration of the term of this Agreement. If that date should
fall on a non-business day in the United States, the holder of the vested
Warrant may exercise such rights on the next U.S. business day.
(d) Upon the exercise of vested Warrant rights and as instructed by the
Consultant, the shares issuable under the Warrant shall be registered in the
name of the nominee(s) of the Consultant as outstanding on the books and records
of the Client. The arrangements for registration of shares issuable under the
warrant are provided in Schedule C to this agreement.
5. TERM AND TERMINATION; EFFECT OF TERMINATION
(a) This Agreement shall terminate on March 31, 2004, unless terminated
sooner as provided below.
(b) Either Party shall have the right to terminate this Agreement without
cause or reason by providing the other party with not less than thirty days
prior written Notice, by the method provided in Section 14(a) below.
(i) In the event that Client exercises its rights to terminate
pursuant to this subsection, all unvested Warrant rights become immediately
vested and Consultant shall have the right to exercise any and all Vested
Warrant rights within one year from the effective date of such termination.
(ii) In the event that Consultant exercises its rights to terminate
this Agreement pursuant to this subsection, the Consultant shall have the right
to exercise any and all Vested Warrant rights within ninety days from the
effective date of such termination.
(c) Either party may terminate this Agreement for "special cause" by
providing the other party with three day prior written Notice in the manner
provided in Section 14(a) below. In the event the Agreement has been terminated
pursuant to this subsection, the First Warrant and the Second Warrant will have
expired immediately. For purposes of this paragraph, "special cause" shall mean
that the party, including its officers, directors and/or any person owning at
least twenty five percent of its equity securities:
(i) has been convicted of a felony;
(ii) is or has been subject to a statutory disqualification as defined
in the Securities Exchange Act of 1934, as amended; or
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(iii) Has engaged in activities which, if such activities were
performed in the United States, would subject it to a statutory disqualification
under the Securities Exchange Act of 1934, as amended.
Notwithstanding anything to the contrary above, the provisions of this
subsection are specifically applicable to Xxxx Xxxxxxx.
(d) If the expiration date of the Vested Warrant rights falls on a non-US
business day, the expiration date shall be extended to the next US business day.
Upon the exercise of vested Warrant rights and as instructed by the Consultant,
the shares issuable under the Warrant shall be registered in the name of the
nominee(s) of the Consultant as outstanding on the books and records of the
Client. The arrangements for registration of shares issuable under the warrant
are provided in Schedule C to this agreement.
6. INDEMNITIES
(a) Consultant hereby agrees to fully indemnify and hold harmless Client
and its affiliates and its respective officers, directors, stockholders,
employees and agents from and against any and all losses, suits, demands,
liabilities, claims, actions, expenses, and damages of whatsoever kind or
nature, including costs of litigation and reasonable attorney's fees, arising
out of the negligence, willful misconduct or breach of any convenant,
representation, warranty or provisions of this Agreement by Consultant or any of
its employees or subcontractors; provided, that Consultant shall not be required
to indemnify Client from those losses, suits, demands, liabilities, claims,
actions, expenses, and damages that are caused solely by the negligence of
Client or any of Client's employees.
(b) Client hereby agrees to fully indemnify and hold harmless Consultant
and its affiliates and its respective officers, directors, stockholders,
employees and agents from and against any and all losses, suits, demands,
liabilities, claims, actions, expenses, and damages of whatsoever kind or
nature, including costs of litigation and reasonable attorney's fees, arising
out of the negligence, willful misconduct or breach of any convenant,
representation, warranty or provisions of this Agreement by Client or any of its
employees or subcontractors; provided, that Client shall not be required to
indemnify Consultants from those losses, suits, demands, liabilities, claims,
actions, expenses, and damages that are caused solely by the negligence of
Consultant or any of Consultant's employees.
7. CONFIDENTIAL INFORMATION
(a) The term "Confidential Information" shall mean all proprietary,
confidential and other non-public information, know-how and data (oral, written,
graphic demonstrative, machine recognizable or otherwise) relating to the
proprietary technology and/or business of the Client which is disclosed by the
Client to the Consultant under this Agreement. Confidential Information further
shall include all information relating to fees paid to Consultant, its employees
and approved subcontractors. Confidential Information shall NOT include any such
information (i) lawfully known to Consultant prior to the performance of such
services other than through other work with or for Client or (ii) publicly
disclosed through no act of Consultant or
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any of Consultant's employees or approved subcontractors, either prior or
subsequent to Client's disclosures of such information to Consultant or (iii)
has been independently developed by the Consulatant without reference to the
Confidential Information.
(b) The Consultant shall hold the Confidential Information in trust for the
Client and shall not disclose it to any unauthorized persons during or after the
termination of this Agreement, without the prior written consent of the Client
or unless authorized by this Agreement. Notwithstanding the foregoing,
Consultant may disclose Confidential Information to the extent that disclosure
is required by a court or other governmental agency of competent jurisdiction;
provided, that Consultant shall provide notice to Client of the request for such
disclosure promptly upon receiving it.
8. RIGHTS IN WORK PRODUCT
All patentable and unpatentable inventions, discoveries, ideas, materials
and programs which are made or conceived by the Consultant in the course of or
as a result of the performance of the Consultant's Services shall become the
sole and exclusive property of the Client throughout the world. Promptly upon
the conception of such invention, discovery, idea, materials or program, the
Consultant will disclose it to the Client and the Client shall have the full
power and authority to file and prosecute patent applications throughout the
world on it and to procure and maintain patents on it. The Consultant shall, at
the request and expense of the Client, execute documents and perform such acts
as legal counsel of the Client may deem necessary or advisable, to confirm in
the Client all right, title and interest throughout the world, in and to such
invention, discovery idea, materials or program, and all patent applications,
patents and copyrights on it, and to assist the Client in procuring,
maintaining, enforcing and defining patents, xxxxx patents, copyrights, and
other applicable statutory protection throughout the world on any such
invention, discovery, idea, materials or programs which may be patentable or
copyrightable. Without limitation, the Consultant, as author of any written,
graphic, artistic or creative work, that the Consultant will produce as part of
performing the Consultant's Services, will transfer absolutely to the Client all
of the rights of the Consultant to the copyright in such work.
Consultant shall promptly advise Client of any situation in which
Consultant intends to incorporate in any Work Product any material which
Consultant believes to be owned by Consultant or any third party, and shall
thereafter give effect to Client's reasonable instructions with respect to such
material.
9. DISCLOSURE AGREEMENT
All Disclosure Materials shall be subject to review by the Client and shall
not be distributed if the Client determines, in the Client's sole discretion,
that they would disclose Confidential Information or are otherwise
inappropriate.
10. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of the Consultant
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The Consultant represents and warrants that its entry into and performance
under this Agreement does not violate any outstanding obligation, contractual or
otherwise, which the Consultant may owe to any third party, nor any order, writ,
injunction, decree, judgement, statute, rule, law or ruling. The Consultant
further warrants that the Consultant's Services will be of the kind and quality
designated.
(b) Representations and Warranties of the Client
(i) The Client represents and warrants that its entry into and performance
under this Agreement does not violate any outstanding obligation, contractual or
otherwise, which the Client may owe to any third party, nor any order, writ,
injunction, decree, judgment, statute, rule, law or ruling.
(ii) The Client represents and warrants to the Consultant that:
(a) all information and documentation furnished by it to Consultant
accurately will depict in all material respects the Client and its business and
proposed business and will not, to the best of the Client's knowledge, contain
material misstatements or omissions; and
(b) disclosure materials which the Client approves as provided in
Section 9, above, will accurately depict, in all material respects, the Client
and its business and proposed business, and will not contain any material
misstatements or omissions of material facts which make any statement set forth
therein materially false or misleading.
(c) the Warrant and the shares issuable thereunder (the "Shares") have
been fully authorized;
(d) the Client has taken all necessary action to authorize the
issuance of the Warrant and the Shares;
(e) when issued pursuant to the Warrant, the Shares will be validly
issued and non-assessable and no personal liability will attach to the ownership
of the Shares;
(f) the Client has reserved all Shares issuable pursuant to the
Warrant and will, at all times, reserve a sufficient number of Shares to perform
all of its obligations under the Warrant.
11. SOLE AGREEMENT
This Agreement shall supersede all prior Agreements, including the ones
dated January 1, 2001 and April 1, 2001 ("Previous Agreements') and
understandings, if any, between the parties respecting the subject matter
hereof. All previous warrants earned and accrued by virtue of thePrevious
Agreements have been transferred by Client to Consultant as noted in the First
Warrant and Second Warrant attached. This Agreement may be modified at any time
by an instrument in writing signed by authorized representatives of the parties
hereto.
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12. APPLICABLE LAW; JURISDICTION AND VENUE
(a) This Agreement is made under and shall be construed according to the
laws and judicial decisions of the State of Delaware, excluding choice of law
rules directing application of the law of any other jurisdiction.
(b) Notwithstanding the paragraph immediately above, each party irrevocably
consents to the exclusive jurisdiction of the courts located in British Columbia
in connection with any action arising out of this Agreement or its subject
matter. Each party waives any objection based on lack of personal jurisdiction,
place of residence, improper venue or forum non conveniens in any such action.
13. NO WAIVER
No term or provision hereof shall be deemed waived, and no breach excused,
unless the party claimed to have waived the term or provision or excused the
breach shall have so stated in a writing signed by it. No consent to or waiver
of a breach by either party shall constitute a consent to, waiver of, or excuse
for any different or subsequent breach.
14. GENERAL
(a) Any notice required to be given hereunder shall be in writing and
delivered by hand or sent by mail or courier to the address set forth herein or
to such other address as either party may designate from time to time in writing
for such purpose. Notices shall be deemed to have been given upon the earlier to
occur of the date of actual receipt or seven days following the date of postmark
thereof.
(i) Notices addressed to Client shall be sent to:
Unity Wireless Corporation
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, X.X. X0X 0X0
Facsimile Number: (000) 000-0000
(ii) Notices addressed to Consultant shall be sent to:
Xxxxxxx & Company, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Facsimile Number:(000) 000-0000.
(b) If any term or provision of this Agreement shall be held invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby and
each term and provision hereof shall be valid and enforced to the fullest extent
permitted by law.
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(c) Paragraph headings are for convenience only and shall not be construed
as part of this Agreement.
(d) This Agreement and/ or other agreement required hereunder shall and can
be executed in two counterparts, each of which if executed in counterparts shall
be deemed an original but which together shall constitute but one and the same
document.
IN WITNESS AND IN EXECUTION WHEREOF, the undersigned, by their duly
authorized representatives, have hereunto set their signatures.
CLIENT CONSULTANT
UNITY WIRELESS CORPORATION XXXXXXX & CO. INC.
0000 Xxxxxx Xxxx Xxxxx 242 Fourth Street
Burnaby, B.C. V5J 5B9 Xxxxxxxx, Xxx Xxxxxx 00000
By: ---------------------------- By: ----------------------------
Title: ------------------------- Title: -------------------------
690487
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SCHEDULE A - FIRST WARRANT
TERMS AND CONDITIONS OF WARRANT
ARTICLE 1. DEFINITIONS
1.1 Definitions
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
(a) "Client" means Unity Wireless Corporation;
(b) "Common Stock" shall mean the common stock, par value $0.001 per
share, of the Client;
(c) "Consulting Agreement" means the consulting agreement among Xxxxxxx &
Company, Inc. and Unity Wireless Corporation and dated as of November
15, 2001;
(d) "Corporate Office" shall mean the office of the Client (or its
successor) at which at any particular time its principal business
shall be administered, which office is located at the date hereof at
0000 Xxxxxx Xxxx Xxxxx, Xxxxxxx, X.X.X0X 0X0;
(e) "Exercise Date" shall mean any date upon which the Holder shall give
the Client a Notice of Exercise, which shall be deemed the date the
Notice of Exercise was first deposited in the US Mails, if mailed, or
the date received by the courier Client if delivered by recognized
courier company, or the date received by the Client if otherwise given
or delivered;
(f) "Exercise Period" means the period during which vested warrant rights
under the Warrant may be exercised pursuant to s. 5.1 of the
Consulting Agreement;
(g) "Exercise Price" shall mean the price to be paid to the Client for
each share of Common Stock to be purchased upon exercise of this
Warrant in accordance with the terms hereof, which shall be $0.38 per
share;
(h) "Holder" means Xxxxxxx & Company, Inc. ;
(i) "SEC" shall mean the United States Securities and Exchange Commission;
(j) "Shares" means shares of the Common Stock; and
(k) "Vested" means the non-forfeitable right to exercise the Warrant and
to purchase the number of shares of Common Stock provided for below.
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ARTICLE 2. EXERCISE
2.1 Manner of Exercise
(a) Holder may exercise this Warrant at any time and from time to time
during the Exercise Period, in whole or in part (but not in
denominations of fewer than 5,000 Shares, except upon an exercise of
this Warrant with respect to the remaining balance of Shares
purchasable hereunder at the time of exercise), by delivering to the
Client at its Corporate Office (i) a duly executed Notice of Exercise
in substantially the form attached as Appendix I hereto and (ii) a
bank cashier's or certified check for the aggregate Exercise Price of
the Shares being purchased.
(b) From time to time upon exercise of this Warrant, in whole or part, in
accordance with its terms, the Client will cause its transfer agent to
countersign and deliver stock certificates to the Holder representing
the number of Shares being purchased pursuant to such exercise,
subject to adjustment as described herein.
2.2 No Rights Prior to Exercise
Prior to its exercise pursuant to Section 2.1 above, this Warrant shall not
entitle the Holder to any voting or other rights as holder of Shares.
2.3 Adjustments
In case of any reclassification, capital reorganization, stock dividend, or
other change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Client with or into another corporation
(other than a consolidation or merger in which the Client is the continuing
corporation and which does not result in any reclassification, capital
reorganization, stock dividend, or other change of outstanding shares of
Common Stock), or in case of any sale or conveyance to another corporation
of the property of the Client as, or substantially as, an entirety (other
than a sale/leaseback, mortgage or other financing transaction), the Client
shall cause effective provision to be made so that the Holder shall have
the right thereafter, by exercising this Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization, stock
dividend, or other change, consolidation, merger, sale or conveyance as the
Holder would have been entitled to receive had the Holder exercised this
Warrant in full immediately before such reclassification, capital
reorganization, stock dividend, or other change, consolidation, merger,
sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2.3. The foregoing provisions
shall similarly apply to successive reclassifications, capital
reorganizations, stock dividends, and other changes of outstanding shares
of Common Stock and to successive consolidations, mergers, sales or
conveyances.
2.4 Fractional Shares
No fractional Shares shall be issuable upon exercise or conversion of this
Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a
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fractional Share interest arises upon any exercise or conversion of the
Warrant, the Client shall eliminate such fractional Share interest by
paying Holder the amount computed by multiplying the fractional interest by
the closing bid price of a full Share on the date of the Notice of
Exercise.
2.5 Vesting of the Warrants
Shares shall Vest over the Vesting Period according to the following
schedule:
# of Shares # of Shares
Vesting Date Vested Cumulatively Vested
------------ ------ -------------------
November 15, 2001 76,564 76,564
December 31, 2001 4,688 81,250
March 31, 2002 4,688 85,940
June 30, 2002 4,688 90,628
September 30, 2002 4,686 95,314
December 31, 2002 4,686 100,000
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE CLIENT
3.1 Representations and Warranties
The Client hereby represents and warrants to the Holder as follows:
(a) The Client is a corporation duly organized and validly existing under
the laws of the State of Delaware, and has the full power and
authority to issue this Warrant and to comply with the terms hereof.
This Warrant has been duly executed and delivered by the Client and is
a valid and binding obligation of the Client, enforceable in
accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws
affecting enforceability of creditors' rights generally and except as
the availability of the remedy of specific enforcement, injunctive
relief or other equitable relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
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ARTICLE 4. REPRESENTATIONS AND COVENANTS OF THE HOLDER
4.1 Representations and Warranties
The Warrant granted hereunder may be exercised by Holder only if at the
time of exercise each of the following is true:
(a) Holder is acquiring the Shares for Holder's own personal account for
investment and not for the account of any other person(s) and without
any intention of selling or making a further distribution of the
Shares; and
(b) Holder is in a financial position to hold the Shares for an indefinite
period of time and is able to bear the economic risk and withstand a
complete loss of Holder's investment in the Shares; and
(c) Holder has obtained, to the extent necessary, Holder's own personal
professional advisor with respect to the risks inherent in the
investment in the Shares, and the suitability of the investment in the
Shares in light of Holder's financial condition and investment needs;
and
(d) Holder acknowledges that, unless otherwise notified in writing by the
Client, Holder is aware that:
(i) The Shares have not been registered under the Securities Act of
1933, as amended, nor have they been registered to qualify under
the securities laws of any state or foreign jurisdiction;
(ii) Holder may not legally sell the Shares unless and until they are
registered and/or qualified or unless the Shares qualify for
exemption from registration and/or qualification under such Acts;
(iii)Holder agrees that all Shares acquired pursuant to this
Agreement are for investment only and that said Shares shall bear
any and all necessary legends and restrictions.
ARTICLE 5. MISCELLANEOUS
5.1 Transfer
This Warrant may not be transferred or assigned, in whole or in part, at
any time, except in compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation,
the delivery of an investment representation letter and a legal opinion
reasonably satisfactory to the Client), provided that this Warrant may not
be transferred or assigned such that either the Holder or any transferee
will, following such transfer or assignment, hold a Warrant for the right
to purchase fewer than 5,000 Shares.
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5.2 Transfer Procedure
Subject to the provisions of Section 5.1, Holder may transfer or assign
this Warrant by giving the Client notice setting forth the name, address
and taxpayer identification number of the transferee or assignee, if
applicable (the "transferee"), and surrendering this Warrant to the Client
for reissuance to the transferee (and the Holder, in the event of a
transfer or assignment of this Warrant in part). (Each of the persons or
entities in whose name any such new Warrant shall be issued are herein
referred to as a Holder)
5.3 Loss, Theft, Destruction or Mutilation
If this Warrant shall become mutilated or defaced or be destroyed, lost or
stolen, the Client shall execute and deliver a new Warrant in exchange for
and upon surrender and cancellation of such mutilated or defaced Warrant
or, in lieu of and in substitution for such Warrants so destroyed, lost or
stolen, upon the Holder filing with the Client evidence satisfactory to it
that such Warrant has been so mutilated, defaced, destroyed, lost or
stolen. However, the Client shall be entitled, as a condition to the
execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of the expenses and charges incurred in
connection with the delivery of such new Warrant. Any Warrant so
surrendered to the Client shall be canceled.
THIS SPACE LEFT BLANK INTENTIONALLY
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APPENDIX 1
NOTICE OF EXERCISE
To: UNITY WIRELESS CORPORATION
(1) The undersigned hereby elects to purchase __________ shares of Common
Stock ("Shares") of UNITY WIRELESS CORPORATION (the "Company") pursuant to
the terms of the attached First Warrant, and tenders herewith payment of
the purchase price in full, together with all applicable transfer taxes, if
any.
(2) In exercising the attached Warrant, the undersigned hereby represents,
warrants, confirms and acknowledges that the undersigned is acquiring the Shares
for his, her or its own account for investment purposes only and not with a view
to resale or distribution thereof except in compliance with applicable
securities laws.
------------------------------- ----------------------------------
Date Signature
Address:
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SCHEDULE B - SECOND WARRANT
TERMS AND CONDITIONS OF WARRANT
ARTICLE 1. DEFINITIONS
1.1 Definitions
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
(a) "Client" means Unity Wireless Corporation;
(b) "Common Stock" shall mean the common stock, par value $0.001 per
share, of the Client;
(c) "Consulting Agreement" means the consulting agreement among Xxxxxxx &
Company, Inc. and Unity Wireless Corporation and dated as of November
15, 2001;
(d) "Corporate Office" shall mean the office of the Client (or its
successor) at which at any particular time its principal business
shall be administered, which office is located at the date hereof at
0000 Xxxxxx Xxxx Xxxxx, Xxxxxxx, X.X.X0X 0X0;
(e) "Exercise Date" shall mean any date upon which the Holder shall give
the Client a Notice of Exercise, which shall be deemed the date the
Notice of Exercise was first deposited in the US Mails, if mailed, or
the date received by the courier Client if delivered by recognized
courier company, or the date received by the Client if otherwise given
or delivered;
(f) "Exercise Period" means the period during which vested warrant rights
under the Warrant may be exercised pursuant to s. 5.1 of the
Consulting Agreement;
(g) "Exercise Price" shall mean the price to be paid to the Client for
each share of Common Stock to be purchased upon exercise of this
Warrant in accordance with the terms hereof, which shall be $0.29 per
share;
(h) "Holder" means Xxxxxxx & Company, Inc..;
(i) "SEC" shall mean the United States Securities and Exchange Commission;
(j) "Shares" means shares of the Common Stock; and
(k) "Vested" means the non-forfeitable right to exercise the Warrant and
to purchase the number of shares of Common Stock provided for below.
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ARTICLE 2. EXERCISE
2.1 Manner of Exercise
(a) Holder may exercise this Warrant at any time and from time to time
during the Exercise Period, in whole or in part (but not in
denominations of fewer than 5,000 Shares, except upon an exercise of
this Warrant with respect to the remaining balance of Shares
purchasable hereunder at the time of exercise), by delivering to the
Client at its Corporate Office (i) a duly executed Notice of Exercise
in substantially the form attached as Appendix I hereto and (ii) a
bank cashier's or certified check for the aggregate Exercise Price of
the Shares being purchased.
(b) From time to time upon exercise of this Warrant, in whole or part, in
accordance with its terms, the Client will cause its transfer agent to
countersign and deliver stock certificates to the Holder representing
the number of Shares being purchased pursuant to such exercise,
subject to adjustment as described herein.
2.2 No Rights Prior to Exercise
Prior to its exercise pursuant to Section 2.1 above, this Warrant shall not
entitle the Holder to any voting or other rights as holder of Shares.
2.3 Adjustments
In case of any reclassification, capital reorganization, stock dividend, or
other change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Client with or into another corporation
(other than a consolidation or merger in which the Client is the continuing
corporation and which does not result in any reclassification, capital
reorganization, stock dividend, or other change of outstanding shares of
Common Stock), or in case of any sale or conveyance to another corporation
of the property of the Client as, or substantially as, an entirety (other
than a sale/leaseback, mortgage or other financing transaction), the Client
shall cause effective provision to be made so that the Holder shall have
the right thereafter, by exercising this Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization, stock
dividend, or other change, consolidation, merger, sale or conveyance as the
Holder would have been entitled to receive had the Holder exercised this
Warrant in full immediately before such reclassification, capital
reorganization, stock dividend, or other change, consolidation, merger,
sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2.3. The foregoing provisions
shall similarly apply to successive reclassifications, capital
reorganizations, stock dividends, and other changes of outstanding shares
of Common Stock and to successive consolidations, mergers, sales or
conveyances.
2.4 Fractional Shares
No fractional Shares shall be issuable upon exercise or conversion of this
Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a
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fractional Share interest arises upon any exercise or conversion of the
Warrant, the Client shall eliminate such fractional Share interest by
paying Holder the amount computed by multiplying the fractional interest by
the closing bid price of a full Share on the date of the Notice of
Exercise.
2.5 Vesting of the Warrants
Shares shall Vest over the Vesting Period according to the following
schedule:
# of Shares # of Shares
Vesting Date Vested Cumulatively Vested
------------ ------ -------------------
November 15, 2001 25,000 25,000
December 31, 2001 12,500 37,500
March 31, 2002 12,500 50,000
June 30, 2002 12,500 62,500
September 30, 2002 12,500 75,000
December 31, 2002 12,500 87,500
March 31, 2003 12,500 100,000
June 30, 2003 12,500 112,500
September 30, 2003 12,500 125,000
December 31, 2003 12,500 137,500
March 31, 2004 12,500 150,000
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE CLIENT
3.1 Representations and Warranties
The Client hereby represents and warrants to the Holder as follows:
(a) The Client is a corporation duly organized and validly existing under
the laws of the State of Delaware, and has the full power and
authority to issue this Warrant and to comply with the terms hereof.
This Warrant has been duly executed and delivered by the Client and is
a valid and binding obligation of the Client, enforceable in
accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws
affecting enforceability of creditors' rights generally and except as
the availability of the remedy of specific enforcement, injunctive
relief or other equitable relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
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ARTICLE 4. REPRESENTATIONS AND COVENANTS OF THE HOLDER
4.1 Representations and Warranties
The Warrant granted hereunder may be exercised by Holder only if at the
time of exercise each of the following is true:
(a) Holder is acquiring the Shares for Holder's own personal account for
investment and not for the account of any other person(s) and without
any intention of selling or making a further distribution of the
Shares; and
(b) Holder is in a financial position to hold the Shares for an indefinite
period of time and is able to bear the economic risk and withstand a
complete loss of Holder's investment in the Shares; and
(c) Holder has obtained, to the extent necessary, Holder's own personal
professional advisor with respect to the risks inherent in the
investment in the Shares, and the suitability of the investment in the
Shares in light of Holder's financial condition and investment needs;
and
(d) Holder acknowledges that, unless otherwise notified in writing by the
Client, Holder is aware that:
(i) The Shares have not been registered under the Securities Act of
1933, as amended, nor have they been registered to qualify under
the securities laws of any state or foreign jurisdiction;
(ii) Holder may not legally sell the Shares unless and until they are
registered and/or qualified or unless the Shares qualify for
exemption from registration and/or qualification under such Acts;
(iii)Holder agrees that all Shares acquired pursuant to this
Agreement are for investment only and that said Shares shall bear
any and all necessary legends and restrictions.
ARTICLE 5. MISCELLANEOUS
5.1 Transfer
This Warrant may not be transferred or assigned, in whole or in part, at
any time, except in compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation,
the delivery of an investment representation letter and a legal opinion
reasonably satisfactory to the Client), provided that this Warrant may not
be transferred or assigned such that either the Holder or any transferee
will, following such transfer or assignment, hold a Warrant for the right
to purchase fewer than 5,000 Shares.
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5.2 Transfer Procedure
Subject to the provisions of Section 5.1, Holder may transfer or assign
this Warrant by giving the Client notice setting forth the name, address
and taxpayer identification number of the transferee or assignee, if
applicable (the "transferee"), and surrendering this Warrant to the Client
for reissuance to the transferee (and the Holder, in the event of a
transfer or assignment of this Warrant in part). (Each of the persons or
entities in whose name any such new Warrant shall be issued are herein
referred to as a Holder)
5.3 Loss, Theft, Destruction or Mutilation
If this Warrant shall become mutilated or defaced or be destroyed, lost or
stolen, the Client shall execute and deliver a new Warrant in exchange for
and upon surrender and cancellation of such mutilated or defaced Warrant
or, in lieu of and in substitution for such Warrants so destroyed, lost or
stolen, upon the Holder filing with the Client evidence satisfactory to it
that such Warrant has been so mutilated, defaced, destroyed, lost or
stolen. However, the Client shall be entitled, as a condition to the
execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of the expenses and charges incurred in
connection with the delivery of such new Warrant. Any Warrant so
surrendered to the Client shall be canceled.
THIS SPACE LEFT BLANK INTENTIONALLY
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APPENDIX 1
NOTICE OF EXERCISE
To: UNITY WIRELESS CORPORATION
(1) The undersigned hereby elects to purchase __________ shares of Common
Stock ("Shares") of UNITY WIRELESS CORPORATION (the "Company") pursuant to
the terms of the attached First Warrant, and tenders herewith payment of
the purchase price in full, together with all applicable transfer taxes, if
any.
(2) In exercising the attached Warrant, the undersigned hereby represents,
warrants, confirms and acknowledges that the undersigned is acquiring the Shares
for his, her or its own account for investment purposes only and not with a view
to resale or distribution thereof except in compliance with applicable
securities laws.
------------------------------- ----------------------------------
Date Signature
Address:
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