EXHIBIT 4.2
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is entered
into this 9th day of May, 2002, by and between Reality Wireless Networks, Inc.,
a Nevada corporation (the "Company") and Xxxxxxxxxxxx XxXxxxxx (the "Grantee").
Each of the Grantee and the Company are also referred to in this Agreement as
the "Parties."
RECITALS
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") has authorized the grant to the Grantee, for services to be rendered
by the Grantee as a consultant to the Company pursuant to the terms of a
Consulting Agreement of even date herewith (the "Consulting Agreement") between
the Company and the Grantee, of a non-qualified stock option (the "Option") to
purchase the number of shares of the Company's common stock (the "Common Stock")
specified in paragraph 1 of this Agreement, at the price specified in paragraph
1 of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth in this Agreement, the Parties hereby agree as follows:
1. Number of Shares; Exercise Price. Pursuant to action taken by the
Board of Directors, the Company hereby grants to the Grantee, in consideration
of consulting services to be performed for the benefit of the Company pursuant
to the Consulting Agreement, an option ("Option") to purchase the number of
common shares ("Option Shares") of Common Stock set forth below, at the exercise
price set forth below:
Number of Option Shares: 250,000
Exercise Price per Option Share: $0.01 per share
2. Term. The Option and this Agreement shall expire ten (10) years from
the date of this Agreement.
3. Shares Subject To Exercise. The Option shall be immediately
exercisable and shall remain exercisable for the entire Term specified in
paragraph 2 of this Agreement. Payment of the Exercise Price of the Option
Shares being purchased, may be made by a cashless exercise procedure whereby the
Option Shares issued upon exercise of the Option will be sold with the Grantee
receiving the difference between the Exercise Price and the sale price, in cash,
and the Company receiving the Exercise Price for the Option Shares, in cash.
4. Method and Time of Exercise. The Option may be exercised in whole or
from time to time in part by written notice delivered to the Company stating the
number of Option Shares with respect to which the Option is then being
exercised, together with a check or wire to the Company in the amount equal to
the Exercise Price multiplied by the number of Option Shares then being issued
pursuant to the written notice of exercise. Not less than one hundred (100)
Option Shares may be purchased upon exercise of the Option at any one time
unless the number of Option Shares for which exercise of the Option is being
made is all of the Option Shares then issuable upon exercise of the Option. Only
whole shares shall be issued upon exercise of the Option.
5. Tax Withholding. As a condition to exercise of the options Grantee
shall be liable to pay to all applicable federal, state and local taxes.
6. Exercise Following Termination of Consulting Agreement. The Option
shall not terminate as a result of the termination of Grantee's services as a
consultant to the Company pursuant to the Consulting Agreement.
7. Transferability. The Option and this Agreement may not be assigned
or transferred except by will or by the laws of descent and distribution, and
with consent of the Company.
8. Grantee Not a Shareholder. The Grantee shall have no rights as a
shareholder with respect to the Option Shares issued from time to time upon
exercise of the Option until the earlier of: (1) the date of issuance of a stock
certificate or stock certificates to the Grantee applicable to the Option Shares
then issuable to the Grantee upon exercise of the Option and (2) the date on
which the Grantee or his nominee is recorded as owner of such Option Shares on
the Company's stock ledger by the Company's registrar and transfer agent, which
may be the Company. Except as set forth in paragraph 13 of this Agreement, no
adjustment will be made for dividends or other rights for which the record date
is prior to the earlier of the events described in clauses (1) and (2) of this
paragraph.
9. Restrictions on Transfer. The Grantee represents and agrees that,
upon the Grantee's exercise of the Option in whole or in part, unless there is
in effect at that time under the Securities Act of 1933, as amended, a
registration statement relating to the Option Shares, the Grantee will acquire
the Option Shares for the purpose of investment and not with a view to their
resale or further distribution, and that upon such exercise hereof, the Grantee
will furnish to the Company a written statement to such effect, satisfactory to
the Company in form and substance.
10. Shares Qualified for Listing. Company represents that it is a
"reporting issuer" under the Securities Exchange Act of 1934, as amended, and
its Common Stock is qualified for trading or quotation on the Over-the-Counter
Bulletin Board.
11. Registration Rights. Upon signing this Agreement, the Company shall
immediately, at the Company's expense, use its best efforts to file with the
Securities and Exchange Commission ("SEC"), a registration statement
("Registration Statement") on Form S-8 or other comparable form, or if such form
is not then available, such other form of registration statement then available,
in such form as to comply with applicable federal and state laws for the purpose
of registering or qualifying the Option Shares for public resale by the Grantee,
and prepare and file with the appropriate state securities regulatory
authorities the documents reasonably necessary to register or qualify the Option
Shares, subject to the ability of the Company to register or qualify the Option
Shares under applicable state law.
12. Notices. All notices to the Company shall be addressed to the
Company at the principal office of the Company at 000 X. Xxxxxxxx Xxx., Xxxxx
X., Xxxxxxxx, Xxxxxxxxxx 00000, and all notices to the Grantee shall be
addressed to the Grantee at the address and facsimile number of the Grantee set
forth on the signature page of this Agreement or, if different, the last address
and facsimile number on file with the Company, or to such other address and
facsimile number as either may designate to the other in writing. A notice shall
be deemed to be duly given if and when enclosed in a properly addressed sealed
envelope deposited, postage prepaid and followed by facsimile to the addressee.
In lieu of giving notice by mail as aforesaid, written notices under this
Agreement may be given by personal delivery to the Grantee or to the Company (as
the case may be) by nationally recognized courier or overnight delivery service.
13. Adjustments. If there is any change in the capitalization of the
Company after the date of this Agreement affecting in any manner the number of
kind of outstanding shares of Common Stock of the Company, whether by stock
dividend, stock split, reclassification or recapitalization of such stock, or
because the Company has merged or consolidated with one or more other
corporations (and provided the Option does not thereby terminate pursuant to
paragraph 14 of this Agreement), then the number and kind of shares then subject
to the Option and the exercise price to be paid for the Option Shares shall be
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appropriately adjusted by the Board of Directors; provided, however, that in no
event shall any such adjustment result in the Company being required to sell or
issue any fractional shares. Any such adjustment shall be made without change in
the aggregate exercise price applicable to the unexercised portion of the
Option, but with an appropriate adjustment to the exercise price of each Option
Share or other unit of security then covered by the Option and this Agreement.
14. Cessation of Corporate Existence. Notwithstanding any other
provision of this Agreement, in the event of the reorganization, merger or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation, or the sale of substantially all
the assets of the Company or of more than fifty percent (50%) of the then
outstanding stock of the Company to another corporation or other entity in a
single transaction, the Option granted hereunder shall terminate, provided,
however, that not later than five (5) days before the effective date of such
merger or consolidation or sale of assets in which the Company is not the
surviving corporation, the surviving corporation may, but shall not be so
obligated to, tender to the Grantee an option to purchase a number of shares of
capital stock of the surviving corporation equal to the number of Option Shares
then issuable upon exercise of the Option, and such new option or options for
shares of the surviving corporation shall contain such terms, conditions and
provisions as shall be required substantially to preserve the rights and
benefits of the Option and this Agreement.
15. Miscellaneous.
15.1 Entire Agreement. This Agreement and the Consulting
Agreement contain the entire agreement between the Parties, and may not be
waived, amended, modified or supplemented except by agreement in writing signed
by the Party against whom enforcement of any waiver, amendment, modification or
supplement is sought. Waiver of or failure to exercise any rights provided by
this Agreement and the Consulting Agreement in any respect shall not be deemed a
waiver of any further or future rights.
15.2 Governing Law. This Agreement shall be construed under
the internal laws of the State of Washington, and the Parties agree that the
exclusive jurisdiction for any litigation or arbitration arising from this
Agreement shall be in Seattle, Washington.
15.3 Counterparts. This Agreement may be executed by facsimile
and in two or more counterparts, each of which shall be deemed an original, but
which when taken together shall constitute one agreement.
15.4 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were excluded and shall be enforceable in
accordance with its terms.
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the
date set forth below.
The Company: REALITY WIRELESS NETWORKS, INC.
By: _________________________________
Name: Xxxx Xxxxxxx
Title: Vice President,
Business Development;
Secretary and Treasurer
The Grantee:
By: __________________________________
Name: Xxxxxxxxxxxx XxXxxxxx
Grantee's Address: __________________________________
__________________________________
Grantee's Telephone No.: __________________________________
Grantee's Facsimile No.: __________________________________
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