-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WrMLNlMfEvqaTHgHaGJO/LjaxCjSS62vr5fYMqzCOO/35ojEsVOlWf3CiSCZiOlE FMb36v2jFYZFl0zxgq+S5w== 0001178913-08-001079.txt : 20080501 0001178913-08-001079.hdr.sgml : 20080501 20080501071114 ACCESSION NUMBER: 0001178913-08-001079 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080501 DATE AS OF CHANGE: 20080501 GROUP MEMBERS: STAR-SEED MANAGEMENTGESELLSCHAFT MBH GROUP MEMBERS: SVM STAR VENTURE CAPITAL MANAGEMENT LTD. GROUP MEMBERS: SVM STAR VENTURES MANAGEMENTGESELLSCHAFT MBH NR. 3 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNITY WIRELESS CORP CENTRAL INDEX KEY: 0001100451 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 911940650 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78723 FILM NUMBER: 08791932 BUSINESS ADDRESS: STREET 1: 10900 NE 4TH STREET STREET 2: SUITE 2300 CITY: BELLEVUE STATE: WA ZIP: 96004 BUSINESS PHONE: 1800337664 MAIL ADDRESS: STREET 1: 10900 NE 4TH STREET STREET 2: SUITE 2300 CITY: BELLEVUE STATE: WA ZIP: 96004 FORMER COMPANY: FORMER CONFORMED NAME: SONIC SYSTEMS CORP DATE OF NAME CHANGE: 19991206 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BAREL MEIR DR CENTRAL INDEX KEY: 0000902186 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 49894149300 MAIL ADDRESS: STREET 1: C/O STAR VENTURES MANAGEMENT STREET 2: POSSARTSTRASSE 9 D-81679 CITY: MUNICH SC 13D/A 1 zk85169.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) SCHEDULE 13D/A (Rule 13d-101) Under the Securities Exchange Act of 1934 (AMENDMENT NO. 2) UNITY WIRELESS CORPORATION (Name of Issuer) COMMON STOCK, PAR VALUE $0.001* (Title of Class of Securities) 913347 10 0 (CUSIP Number) DR. MEIR BAREL C/O STAR VENTURES MANAGEMENT POSSARTSTRASSE 9; D-81679 MUNICH, GERMANY TELEPHONE NO.: 49 89 4194 300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) APRIL 22, 2008 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following box: [_] * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). * AS SOME OF THE SECURITIES BENEFICIALLY OWNED BY THE REPORTING PERSONS ARE SERIES B CONVERTIBLE NON-REDEEMABLE PREFERRED SHARES, PAR VALUE $0.001 PER SHARE, OF THE ISSUER (THE "SERIES B SHARES"), AND EACH OF SUCH SERIES B SHARES IS CURRENTLY CONVERTIBLE INTO 1,000 SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF THE ISSUER (THE "SHARES"), THE FIGURES IN THIS STATEMENT ARE SHOWN ON AN AS CONVERTED BASIS. SCHEDULE 13D CUSIP NO. 913347 10 0 - -------------------------------------------------------------------------------- 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Dr. Meir Barel - -------------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - -------------------------------------------------------------------------------- 3) SEC USE ONLY - -------------------------------------------------------------------------------- 4) SOURCE OF FUNDS Not Applicable - -------------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Germany - -------------------------------------------------------------------------------- 7) SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------- SHARES 8) SHARED VOTING POWER BENEFICIALLY 70,095,928* OWNED BY EACH ------------------------------------------------------------- REPORTING 9) SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10) SHARED DISPOSITIVE POWER 67,318,148** - -------------------------------------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 67,318,148** - -------------------------------------------------------------------------------- 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 27.6%*** - -------------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- * Includes 2,777,780 Shares (including warrants exercisable into 1,666,668 Shares) held in trust for Elie Barr. ** Includes Series B Shares convertible into 40,397,944 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 18,296,847 Shares and Debentures convertible into 2,530,111 Shares. *** Based on 243,863,862 Shares outstanding (on an as converted basis), consisting of 180,707,827 Shares outstanding as advised by the Issuer, Series B Shares convertible into 40,397,944 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 18,296,847 Shares and Debentures convertible into 2,530,111 Shares. See Item 5. 2 SCHEDULE 13D CUSIP NO. 913347 10 0 - -------------------------------------------------------------------------------- 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SVM Star Venture Capital Management Ltd. - -------------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - -------------------------------------------------------------------------------- 3) SEC USE ONLY - -------------------------------------------------------------------------------- 4) SOURCE OF FUNDS Not Applicable - -------------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Israel - -------------------------------------------------------------------------------- 7) SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------- SHARES 8) SHARED VOTING POWER BENEFICIALLY 394,689 OWNED BY EACH ------------------------------------------------------------- REPORTING 9) SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10) SHARED DISPOSITIVE POWER 394,689 - -------------------------------------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 394,689 - -------------------------------------------------------------------------------- 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.2%* - -------------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- * Based on 180,707,827 Shares outstanding as advised by the Issuer. 3 SCHEDULE 13D CUSIP NO. 913347 10 0 - -------------------------------------------------------------------------------- 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SVM Star Ventures Managementgesellschaft mbH Nr. 3 - -------------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - -------------------------------------------------------------------------------- 3) SEC USE ONLY - -------------------------------------------------------------------------------- 4) SOURCE OF FUNDS Not Applicable - -------------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Germany - -------------------------------------------------------------------------------- 7) SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------- SHARES 8) SHARED VOTING POWER BENEFICIALLY 47,338,996* OWNED BY EACH ------------------------------------------------------------- REPORTING 9) SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10) SHARED DISPOSITIVE POWER 44,561,216** - -------------------------------------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 44,561,216** - -------------------------------------------------------------------------------- 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.1%*** - -------------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- * Includes 2,777,780 Shares (including warrants exercisable into 1,666,668 Shares) held in trust for Elie Barr. ** Includes Series B Shares convertible into 24,669,260 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 11,663,288 Shares and Debentures convertible into 2,530,111 Shares. *** Based on 221,501,619 Shares outstanding (on an as converted basis), consisting of 180,707,827 Shares outstanding as advised by the Issuer, Series B Shares convertible into 24,669,260 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 11,663,288 Shares and Debentures convertible into 2,530,111 Shares. See Item 5. 4 SCHEDULE 13D CUSIP NO. 913347 10 0 - -------------------------------------------------------------------------------- 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Star-Seed Managementgesellschaft mbH - -------------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - -------------------------------------------------------------------------------- 3) SEC USE ONLY - -------------------------------------------------------------------------------- 4) SOURCE OF FUNDS Not Applicable - -------------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Germany - -------------------------------------------------------------------------------- 7) SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------- SHARES 8) SHARED VOTING POWER BENEFICIALLY 22,362,243* OWNED BY EACH ------------------------------------------------------------- REPORTING 9) SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10) SHARED DISPOSITIVE POWER 22,362,243* - -------------------------------------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 22,362,243* - -------------------------------------------------------------------------------- 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.0%** - -------------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- * Includes Series B Shares convertible into 15,728,684 Shares and warrants exercisable into 6,633,559 Shares. ** Based on 203,070,070 Shares outstanding (on an as converted basis), consisting of 180,707,827 Shares outstanding as advised by the Issuer, Series B Shares convertible into 15,728,684 Shares and warrants exercisable into 6,633,559 Shares. See Item 5. 5 SCHEDULE 13D CUSIP NO. 913347 10 0 This Amendment No.2 amends and supplements the statement in respect of the shares of Common Stock, par value $0.001 per share (the "Shares"), of Unity Wireless Corporation (the "Issuer"), a Delaware corporation, filed by Mr. Meir Barel ("Barel"), SVM Star Ventures Managementgesellschaft mbH Nr. 3 ("SVM3"), and Star-Seed Managementgesellschaft mbH ("Star GmbH") with the Securities and Exchange Commission on December 21, 2006 (the "Statement"). Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed to such terms in the Statement. The following amends and supplements Items 3, 4, 5, 6 and 7 of the Statement. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The additional Series B Convertible Non-redeemable Preferred Shares, par value $0.001 per share, of the Issuer ("Series B Shares"), issued to the Reporting Persons and reported hereunder were received from the Issuer as a result of the transactions described in Item 4 of the Statement, which is incorporated herein by reference. The acquisition of the Promissory Notes (as defined in Item 4 below) in the aggregate sum of $173,802 was funded by SVM 3 from its working capital. ITEM 4. PURPOSE OF TRANSACTION. Under the terms of the transaction more fully described in Item 4 of the Statement, the Issuer held in escrow a certain number of Series B Shares for the benefit of its employees to be issued upon certain milestones and conditions. In accordance with the terms of the Celletra Agreement (as defined in the Statement), the 2,076,413 Series B Shares held in escrow were issued to the Reporting Persons as the conditions and milestones set for the issuance to the employees have not been met. No additional consideration is required from the Reporting Persons for the issuance of these Series B Shares. Additionally, SVM 3 acquired 12% Convertible Promissory Notes ("Promissory Notes"), dated as of March 26, 2008, in consideration for an aggregate price of $173,802. The Promissory Notes are convertible into shares of common stock by dividing the principal amount and interest accrued thereon by the conversion price of $0.09 per share. Consequently, the aggregate number of shares reported as acquired hereunder (1,931,133 Shares) may generally increase until the full repayment of the Promissory Notes. Subject to execution and closing of definitive agreements, the Convertible Promissory Notes will be automatically converted into convertible debentures. See Item 6. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. FOR BAREL: (a), (b) Percentages are based on 243,863,862 Shares outstanding (on an as converted basis), consisting of 180,707,827 Shares outstanding as advised by the Issuer and 63,156,035 Shares (on an as converted basis) beneficially owned by the Reporting Persons (in the aggregate). As of April 22, 2008, Barel may be deemed the beneficial owner, and to share the power to vote and dispose of, 67,318,148 Shares (including Series B Shares convertible into 40,397,944 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 18,296,847 Shares and Debentures convertible into 2,530,111 Shares) beneficially owned by SVM 3, Star Israel and Star GmbH representing approximately 27.61% of the Shares outstanding (on an as converted basis) and the power to vote additional 2,777,780 Shares (including warrants exercisable into 1,666,668 Shares) held in trust for Elie Barr by SVM3. Barel disclaims ownership of 2,777,780 Shares (including warrants exercisable into 1,666,668 Shares). 6 SCHEDULE 13D CUSIP NO. 913347 10 0 FOR STAR ISRAEL: (a), (b) Percentages are based on 180,707,827 Shares outstanding as advised by the Issuer. Star Israel is the beneficial owner of the 394,689 Shares representing approximately 0.22% of the Shares outstanding. FOR SVM3: (a), (b) Percentages are based on 221,501,619 Shares outstanding (on an as converted basis), consisting of 180,707,827 Shares outstanding as advised by the Issuer and 40,793,792 Shares (on an as converted basis). As of April 22, 2008, SVM3 is the beneficial owner of, and shares the power to vote and dispose of, 44,561,216 Shares owned by itself or by its direct subsidiaries (including Series B Shares convertible into 24,669,260 Shares, Promissory Notes convertible into 1,931,133 Shares, warrants exercisable into 11,663,288 Shares and Debentures convertible into 2,530,111 Shares) representing approximately 20.12% of the Shares outstanding (on an as converted basis), as well as the power to vote 2,777,780 (including warrants exercisable into 1,666,668 Shares) held in trust for Elie Barr. SVM3 disclaims ownership of such 2,777,780 Shares. FOR STAR GMBH: (a), (b) Percentages are based on 203,070,070 Shares outstanding (on an as converted basis) consisting of 180,707,827 Shares outstanding as advised by the Issuer and 22,362,243 Shares (on an as converted basis). Seed GmbH is the beneficial owner, and shares the power to vote and dispose of, 22,362,243 Shares (including Series B Shares convertible into 15,728,684 Shares and warrants exercisable into 6,633,559 Shares) representing approximately 11.01% of the Shares outstanding (on an as converted basis). For all Reporting Persons: (c) Except as set forth herein in Item 4, within the last 60 days, the Reporting Persons have not effected any transactions in the Shares. (d) Except as set forth in this Item 5, no person other than the Reporting Persons and Barr is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. None, except as described under Item 4 above, which is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1 - Form of Promissory Note, dated March 26, 2008. 7 SCHEDULE 13D CUSIP NO. 913347 10 0 SIGNATURES After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. A joint filing agreement filed with the SEC on December 21, 2006 is incorporated herein by reference. Dated: May 1, 2008 /s/ Dr. Meir Barel - ------------------ Dr. Meir Barel SVM Star Venture Capital Management Ltd. By: /s/ Dr. Meir Barel - ---------------------- Dr. Meir Barel, Managing Director SVM Star Ventures Managementgesellschaft mbH Nr. 3 By: /s/ Dr. Meir Barel - ---------------------- Dr. Meir Barel, Managing Director Star-Seed Managementgesellschaft mbH By: /s/ Dr. Meir Barel - ---------------------- Dr. Meir Barel, Managing Director 8 EX-99 2 exhibit_1.txt EXHIBIT 1 PROMISSORY NOTE AMOUNT: $173,802.00 in UNITED STATED FUNDS FOR VALUE RECEIVED, the undersigned (the "Corporation") hereby promises to pay to the order of SVM Star Ventures Managementgesellschaft mbH Nr.3 ("Lender") at the City of Vancouver, in the Province of British Columbia, on the date that is 60 days from the date hereof, the sum of One hundred seventy three thousand and eight hundred and two US DOLLARS ($173,802.00) in U.S. funds, together with interest thereon at the rate of TWELVE (12%) percent per annum, calculated annually, not in advance, from the date of advance of funds to the undersigned to the due date hereof, and thereafter at the rate of EIGHTEEN (18%) percent per annum; provided, however, that at any time prior to repayment Lender shall be entitled by written notice to the Corporation to convert the entire principal and interest under this Promissory Note into equity shares in the Corporation on the terms and conditions set forth in the attached Financing Proposal (or in the definitive documents to be adopted reflecting such Financing Proposal). The Corporation shall not have the right to prepay all or any portion of this amount. The undersigned hereby waive resentment for payment and notice of dishonor. DATED this 26 day of March, 2008. UNITY WIRELESS CORPORATION Per _____________________________________: ILAN KENIG UNITY WIRELESS CORPORATION - SCHEDULE "A" TO NOTE DATED MARCH.24.2008 Financing Proposal for holders of Series B Preferred Shares (all dollar amounts in USD) Unity Wireless Corporation ("Unity") is proposing to raise up to $375,000, on financing terms proposed to be issued to the holders of Series "B" Convertible Non-redeemable Preferred Shares, on a private placement basis. The proposed financing terms are outlined as follows: 1. Unity will issue convertible debentures to the investors. The debentures will have the same terms and conditions as Unity's existing outstanding debentures issued in December of 2006, including an interest rate of 8% percent per annum, conversion right into Common Shares of Unity at a price of $0.09 per share with full ratchet provisions pursuant to which the conversion price will be reduced in the event that Unity issues shares or other convertible securities with a price (or conversion price) below $0.09 per share. 2. The participating investors would be entitled to exchange all or a portion (as described below) of their existing Series "B" Shares for new Series "C" Preferred Shares on a one-for-one basis. The terms of the Series "C" Shares (which are yet to be created) will be identical to the existing Series "B" Shares except for the following differences: a) The deadline for the forced conversion of the Preferred Shares into Common Shares will be three years from the date the Series "C" are created; b) The Series "C" shares will be convertible into Common Shares on a 1,000-for-1 basis (the same conversion rate as the Series "B" Shares), subject to adjustment if the ratchet provisions of the debenture are triggered. If the adjusted conversion price of the debentures is reduced to $0.02 per share or less, then the conversion rate of the Series "C" shares shall be 2,000 common shares for each Series "C" share. If the adjusted conversion price of the debentures is between $0.09 and $0.02 per share, then the conversion rate shall be adjusted on a corresponding (sliding scale) proportionate basis. By way of example, if the adjusted conversion price is $0.05 per share, then the adjusted conversion rate shall be 1,571 common shares for each Series "C" Share [1,000 + (0.09 - 0.05)/(0.09 - 0.02) x 1,000]. c) In the event that there is an adjustment to the conversion rate of the Series "C" shares, then the right to convert at the increased rate shall be shares to accommodate the issuance (taking into account all shares subject to Unity's articles providing for sufficient authorized reserved for issuance), which may require an amendment to Unity's Articles, but conversion at the non-adjusted rate will be allowed at all times. The number of Series "B" shares that can be exchanged for Series "C" shares shall depend upon the extent to which the investor participates in the placement, based on the holders of Series "B" shares participating in a total financing of up to $375,000. [e.g. maximum number of Series "B" shares that can be exchanged equals (amount invested/$375,000) x 90,000] - 2 - 3. These financing terms shall require Unity to amend its articles to create the Series "C" Shares, which require certain SEC and other filings to be completed. 4. The warrants issued to the Series "B" shareholders that participate in the financing will be amended to add ratchet provisions that will provide for an adjustment to the exercise price in the event that Unity issues securities with a price (or an exercise or conversion price) less than the current exercise price of the warrants. 5. Acknowledging that Unity is offering these financing terms on the condition that funds be immediately available for the purposes of ensuring all filings and other regulatory requirements are complied with, the funds must be invested and provided to Unity no later than March [28], 2008 and such funds shall be immediately releasable to Unity notwithstanding that all required financing documents and approvals have not been completed. Until the terms of the financing can be completed, the funds provided to Unity will represent a short term loan bearing interest at a rate of 12% per annum, payable 60 days. On Unity completing all conditions required to proceed with the financing the short term loan shall be considered to be repaid and the payment applied to the financing. If the conditions have not been satisfied (and the loan applied to the financing) within 60 days then the interest rate thereafter shall increase to 18% per annum until the loan is repaid or applied to the financing. - 3 - -----END PRIVACY-ENHANCED MESSAGE-----