THE SECURITIES DESCRIBED IN THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
WARRANT AGREEMENT
This Warrant Agreement (the "AGREEMENT") dated as of March 4, 2004 between
5G Wireless Communications, Inc., a Nevada corporation (the "COMPANY"), and
_________ ("HOLDER").
WHEREAS, Holder has lent the Company, through a promissory note, an
aggregate amount of _______ Thousand Dollars ($___,000) (the "NOTE") pursuant to
a certain Note and Warrant Purchase Agreement, entered into of even date
herewith (the "NOTE AND WARRANT AGREEMENT") by and between the Company and
Holder. Terms used but not otherwise defined herein shall have the meaning set
forth in the Note and Warrant Agreement.
WHEREAS, pursuant to the Note and Warrant Agreement, the Company wishes to
xxxxx Xxxxxx a warrant (the "WARRANT") to purchase an amount equal to forty
percent (40%) of the amount invested pursuant to the Note and Warrant Agreement
(in this case ________ Dollars ($___,000)) worth of the Capital Stock of the
Company at the Exercise Price described herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Issuance of Warrant Certificate. The Warrant certificate to be delivered
pursuant to this Agreement (the "WARRANT CERTIFICATE") shall be executed on
behalf of the Company by its Chief Executive Officer, President, or any Vice
President and attested by its corporate Secretary or one of its assistant
Secretaries.
2. Right to Exercise Warrant. Each Warrant may be exercised from the date of
this Agreement until 11:59 P.M. (Pacific Standard Time) on March 4, 2006 (the
"EXPIRATION DATE") pursuant to the provisions set forth in this Agreement. Each
Warrant not exercised on or before the Expiration Date shall expire. Subject to
the provisions of this Agreement, Holder shall have the right to exercise this
Warrant into, and the Company shall issue and sell to Holder, Company Common
Stock at a price per share equal to the lesser of (a) the average closing bid
price on the OTC Bulletin Board on the five (5) trading days preceding the
Closing, or (b) the average closing bid price on the OTC Bulletin Board on the
fifteen (15) trading days preceding the date of exercise (the "EXERCISE PRICE").
Upon surrender of such Warrant Certificate and payment of the Exercise
Price by either cash or cashless exercise ("NET ISSUE EXERCISE"), the Company
shall cause the number of Shares to be issued and delivered promptly to
Purchaser. In the event that upon any exercise of the Warrant evidenced hereby,
the number of Shares purchased upon exercise shall be less than the total number
of Shares underlying the Warrant there shall be issued to the Holder a new
Warrant Certificate evidencing the number of Shares not purchased. The Warrant
evidenced by a Warrant Certificate shall be exercisable at the election of the
holder thereof, subject to the provisions of Section 4 hereof.
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(a) Cash Exercise. The Warrant may be exercised by the holder by (i) the
surrender of the Warrant Certificate to the Company, with the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company) and (ii) the delivery of payment to the
Company, for the account of the Company, by cash, wire transfer of immediately
available funds to a bank account specified by the Company, or by certified or
bank cashier's check, of the Exercise Price for the number of Shares specified
in the Notice of Exercise in lawful money of the United States of America. The
Company agrees that such Shares shall be deemed to be issued to the Holder as
the record holder of such Shares as of the close of business on the date on
which the Warrant Certificate shall have been surrendered and payment made for
the Shares as aforesaid. A stock certificate or certificates for the Shares
specified in the Notice of Exercise shall be delivered to the holder as promptly
as practicable, and in any event within 10 days, thereafter. No adjustments
shall be made on the Shares issuable on the exercise of the Warrant for any cash
dividends paid or payable to holders of record of Common Stock or Capital Stock,
as applicable, prior to the date as of which the Holder shall be deemed to be
the record holder of the Shares.
(b) Net Issue Exercise. In lieu of exercising the Warrant pursuant to
Section 2(a), the holder may elect to receive, without the payment by the holder
of any additional consideration, shares equal to the value of the Warrant, or
any portion thereof, by the surrender of the Warrant Certificate to the Company,
with the Notice of Exercise annexed hereto duly executed, at the office of the
Company. Thereupon, the Company shall issue to the holder such number of fully
paid and nonassessable shares of Common Stock or Capital Stock, as applicable,
as is computed using the following formula:
X = Y (A-B)
------
A
where
X = the number of Shares to be issued to the holder pursuant to this
Section 2(b).
Y = the number of Shares otherwise issuable under the Warrant
Certificate or, if only a portion of the Warrant is being
exercised, the portion of the Warrant Certificate being
surrendered (as adjusted to the date of such calculation).
A = if for Common Stock, the closing stock price of one share of
Common Stock as reported by the OTC Bulletin Board on the
trading day immediately prior to the date the Company receives
the Notice of Election, or if for Capital Stock, the fair
market value of one share of Capital Stock as determined by
the Company's Board of Directors on the business day
immediately prior to the date the Company receives the Notice
of Election.
B = the Exercise Price in effect under the Warrant at the time
the Net Issue Election is made pursuant to this Section 2(b).
2
3. Reservation of Shares. The Company will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock or its authorized and issued Common Stock held in its
treasury for the purpose of enabling it to satisfy any obligation to issue
Common Stock upon exercise of the Warrant, the full number of shares of Common
Stock deliverable upon the exercise of the Warrant. The Company covenants that
all shares of Common Stock which may be issued upon exercise of the Warrant will
be validly issued, fully paid and nonassessable.
4. Registration under the Securities Act of 1933 (the "ACT"). Holder
represents and warrant to the Company that Holder is acquiring the Warrant for
investment and with no present intention of distributing or reselling any of the
Warrant. The Common Stock to be issued upon exercise hereof and the certificate
or certificates evidencing any such shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
Certificates for the Warrant or the Common Stock shall also bear such
legends as may be required from time to time by law.
5. Adjustment of Exercise Price and Number of Shares and Class of Capital
Stock Purchasable. The Exercise Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant are subject to adjustment from
time to time as set forth in this Section 6.
(a) Adjustment for Change in Capital Stock. If the Company: pays a
dividend or makes a distribution on its Common Stock in shares of its Common
Stock; subdivides its outstanding shares of Common Stock into a greater number
of shares; combines its outstanding shares of Common Stock into a smaller number
of shares; makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or issues by reclassification of its shares of
Common Stock any shares of such capital stock; then the number and classes of
shares of Common Stock purchasable upon exercise of each Warrant in effect
immediately prior to such action shall be adjusted so that the holder of any
Warrant thereafter exercised may receive the number and classes of shares of
capital stock of the Company which such holder would have owned immediately
following such action if such holder had exercised the Warrant immediately prior
to such action.
3
(b) Consolidation, Merger or Sale of the Company. If the Company is a
party to a consolidation, merger or transfer of assets that reclassifies or
changes its outstanding Common Stock, the successor corporation (or corporation
controlling the successor corporation or the Company, as the case may be) shall
by operation of law assume the Company obligations under this Agreement. Upon
consummation of such transaction the Warrant shall automatically become
exercisable for the kind and amount of securities, cash or other assets that the
holder of the Warrant would have owned immediately after the consolidation,
merger or transfer if such holder had exercised the Warrant immediately before
the effective date of such transaction. As a condition to the consummation of
such transaction, the Company shall arrange for the person or entity obligated
to issue securities or deliver cash or other assets upon exercise of the Warrant
to, concurrently with the consummation of such transaction, assume the Company's
obligations hereunder by executing an instrument so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section.
6. Notices to Company and Holder. Any notice or demand authorized by this
Agreement to be given or made by any registered holder of any Warrant
Certificate to or on the Company shall be sufficiently given in compliance with
the Note and Warrant Agreement.
7. Supplements and Amendments. The Company and Holder may from time to
time supplement or amend this Agreement in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and Holder
may deem necessary or desirable.
8. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or Holder shall bind and inure to the benefit of
their respective successors and assigns hereunder.
9. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
California and for all proposes shall be governed by and construed in accordance
with the laws of said State.
10. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all proposes be deemed to
be an original, and such counterparts shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.
HOLDER 5G Wireless Communications, Inc.
Address: 5G Wireless Communications, Inc.
-----------------------------
0000 Xxx Xxx Xxx.
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Telephone: Telephone: (000) 000-0000
--------------------------------------
Facsimile: Facsimile: (000) 000-0000
--------------------------------------
email:
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5G WIRELESS COMMUNICATIONS INC.
WARRANT CERTIFICATE
NO. _____
This Warrant Certificate certifies that _________ ("HOLDER"), or his
registered assigns, is the registered holder of a warrant (the "WARRANT"), which
shall expire on March 4, 2006 (the "EXPIRATION DATE"). The Warrant entitles
Holder to purchase from the Company before 11:59 p.m. (Pacific Standard Time) on
the "EXPIRATION DATE" _______ Dollars ($___,000) worth of fully paid and
nonassessable shares of Common Stock, at the Exercise Price for each Share,
subject to adjustment in certain events (the "EXERCISE PRICE"), upon surrender
of this Warrant Certificate and payment of the Exercise Price at an office or
agency of the Company, subject to the terms and conditions set forth herein. As
used herein, "SHARE" or "SHARES" refers to the Common Stock and, where
appropriate, to the other securities or property issuable upon exercise of the
Warrant as provided for in the Warrant Agreement (as defined below) upon the
happening of certain events. Unless otherwise set forth herein, all capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Warrant Agreement.
The Exercise Price and the number of Shares purchasable upon exercise of
the Warrant are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement. In the event that upon any exercise of the
Warrant evidenced hereby, the number of Shares purchased shall be less than the
total number of Shares underlying the Warrant evidenced hereby, there shall be
issued to the holder hereof or his or her assignee a new Warrant Certificate
evidencing the number of Shares not purchased. No adjustment shall be made for
any cash dividends on any Shares issuable upon exercise of the Warrant.
The Warrant may not be exercised after 11:59 P.M. (Pacific Standard Time)
on the Expiration Date. The Warrant evidenced hereby shall thereafter be void.
The Warrant evidenced by this Warrant Certificate is issued pursuant to a
Warrant Agreement, dated as of March 4, 2004 (the "WARRANT AGREEMENT") duly
executed by the Company and Holder. The Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder of the Warrant
Certificates).
The Company may deem and treat the person(s) registered in the Company's
register as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s) hereof,
and for all purposes, and the Company shall not be affected by any notice to the
contrary.
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE LAWS, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR
ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE LAW IS AVAILABLE.
5
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
5G Wireless Communications, Inc. Holder
________________________________ _________________________________
_________________________________
Printed Name and Title
6
NOTICE OF EXERCISE
To: 5 G WIRELESS COMMUNICATIONS INC.
The undersigned hereby elects to purchase _________________________ shares of
Common Stock of 5 G WIRELESS COMMUNICATIONS, INC. ("Shares") pursuant to the
terms of the attached Warrant Certificate, and (check the appropriate box):
|_| tenders herewith payment for the purchase of ______________________
shares of Common Stock; and/or
|_| elects to exercise Net Issue Exercise, as provided in Section 2(b)
of the Warrant Agreement, for the purchase of ______________________
shares of Common Stock.
In exercising the Warrant, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued upon conversion thereof are being
acquired solely for the account of the undersigned and not as a nominee for any
other party, or for investment, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any applicable state securities laws.
Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name(s) as is specified
below:
---------------------------------------
---------------------------------------
---------------------------------------
Please issue a new Warrant Certificate for the unexercised portion of the
attached Warrant Certificate in the name of the undersigned or in such other
name(s) as is specified below:
---------------------------------------
---------------------------------------
HOLDER:
---------------------------------- ------------------------------------
Signature of Holder Date
---------------------------------- ------------------------------------
Printed Name of Holder Amount of Payment
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