EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 18th day of November 1999, between
ebaseOne Corporation, a Delaware corporation, currently having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Company"),
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Executive") an individual currently residing in Houston,
Texas.
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company, as Senior Vice President of Technology.
WHEREAS, the Executive is willing to enter into an agreement with the
Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof (the "Commencement Date") and terminating
on December 31, 2002, unless sooner terminated as provided in accordance with
the provisions of Section 5 hereof. (Such term of employment is herein
sometimes called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
employ the Executive as Senior Vice President of Technology of the Company, and
the Executive hereby accepts such employment and agrees to perform his duties
and responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
3. Duties and Responsibilities.
(a) Duties. Executive shall perform such duties as are usually performed by a
Senior Vice President of Technology of a business similar in size and scope
as the Company and such other reasonable additional duties as may be
prescribed from time-to-time by the Company's board of directors which are
reasonable and consistent with the Company's operations, taking into
account Executive's expertise and job responsibilities. This agreement
shall survive any job title or responsibility change agreed to by
Executive. Executive shall report directly to the Chief Executive Officer
of the Company regarding implementation of all business matters. All
actions of Executive shall be subject and subordinate to the review and
approval of the board of directors. No other person or group shall be
given authority to supervise or direct Executive in the performance of his
duties. The board of directors shall be the final and exclusive arbiter of
all policy decisions relative to the Company's business.
(b) Devotion of Time. During the term of this agreement, Executive agrees to
devote sufficient time and attention during normal business hours to the
business and affairs of the company to
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the extent necessary to discharge the responsibilities assigned to
Executive and to use reasonable best efforts to perform faithfully and
efficiently such responsibilities.
4. Compensation and Benefits During the Employment Term:
(a) Base Compensation. The Executive's base compensation from the Commencement
Date through December 31, 2000, shall be at the rate of $9,583.33 per
month, payable in regular semi-monthly installments in accordance with the
Company's practice for its executives, less applicable withholding for
income and employment taxes as required by law and other deductions as to
which the Executive shall agree. Such base compensation shall be subject
to increases as and when determined by the Company's board of directors in
its sole discretion.
(b) Bonus Compensation. In addition to the Executive's base compensation,
Executive will be entitled to a performance bonus as determined by the
board of directors, as recommended by the Chief Executive Officer.
(c) Warrants. The Executive will be entitled to receive five year warrants to
purchase an aggregate 750,000 shares of Company common stock having the
terms set forth in the warrant agreements attached hereto as Exhibit "A."
(d) Expense Reimbursement. The Executive shall be entitled to reimbursement of
all reasonable, ordinary and necessary business related expenses incurred
by him in the course of his duties and upon compliance with the Company's
procedures.
(e) Participation in Employee Benefit Plans. Executive shall be entitled to
participate, subject to eligibility and other terms generally established
by the Company's board or directors, in any employee benefit plan
[including but not limited to life insurance plans, stock option plans,
group hospitalization, hearth, dental care (which health insurance shall
also cover Executive's dependents) profit sharing, pension and other
benefit plans], as may be adopted or amended by the Company from time-to-
time.
5. Termination. Subject to the notice and other provisions of this Section 5,
the Company shall have the right to terminate the Executive's employment with
the Company, and the Executive shall have the right to resign from such
employment, at any time and for no stated reason.
(a) Disability. The Company shall have the right to terminate the employment
of the Executive under this Agreement for disability in the event Executive
suffers an injury, illness or incapacity as defined in the Company's Long
Term Disability Insurance Policy in effect as of the date hereof for a
period of more than six (6) months provided that during such six month
period the Company shall have given at least ten (10) days written notice
of termination; provided further, however, that if the Executive is
eligible to receive disability payments pursuant to a disability policy
paid for by the Company, the Executive shall assign such benefits to the
Company for all periods as to which he is receiving full payment under this
agreement. If Executive is determined to be disabled, as defined within
the Americans with Disabilities Act, the Company will make reasonable
accommodations, including but not
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limited to the following: (i) job restructuring; (ii) modification of work
schedules, (iii) job reassignments, (iv) acquisition of devices to help
accommodate an individual with a disability; and (v) use of interpreters or
other support personnel for an individual with a disability.
(b) Death. This agreement shall terminate upon the death of Executive.
(c) With Cause. The Company may terminate this agreement effective upon
delivery of written notice to Executive given at any time (without any
necessity for prior notice) if any of the following shall occur:
(i) any material breach of Executive's obligations of this Agreement, not
cured after ten (10) days notice from the board of directors;
(ii) Executive's gross negligence in the performance of his duties
hereunder;
(iii) any material acts or events which may inhibit Executive from fully
performing his or her responsibilities to the Company in good faith,
and upon which the board of directors in the exercise of its
reasonable judgment, determines that the Executive has committed any
of the following: (w) a felony criminal conviction; (x) any other
criminal conviction involving Executive's lack of honesty or moral
turpitude; (y) drug or alcohol abuse; or (z) acts of dishonesty,
gross carelessness or gross misconduct.
In the event Executive's employment with the Company is terminated pursuant
to items 5(a), (b) or (c), Executive or his beneficiary shall be entitled to
receive all base compensation earned by Executive up to the date of termination,
all unreimbursed expenses, and any bonus earned in respect of a prior year and
not yet paid. For a termination by the Company without good cause, Executive
shall be entitled to receive the greater of (i) the remaining base salary at the
then base salary rate for the remainder of the Employment Term or (ii) the base
salary rate for the period of six months, and all unreimbursed expenses, any
bonus earned in respect of a prior year and not yet paid, and the pro rata
portion of any bonus for the current year.
6. Revealing of Trade Secrets, etc. Executive acknowledges the interest of
the Company in maintaining the confidentiality of information related to its
business and shall not at any time during the Employment Term or thereafter,
directly or indirectly, reveal or cause to be revealed to any person or entity
the supplier lists, customer lists or other confidential business information of
the Company; provided, however, that the parties acknowledge that it is not the
intention of this paragraph to include within its subject matter (a) information
not proprietary to the Company, (b) information which is then in the public
domain, or (c) information required to be disclosed by law.
7. Arbitration. If a dispute should arise regarding this agreement, all
claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration of a single arbitrator in Houston, Texas, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). Arbitration shall be initiated by written demand.
This agreement to arbitrate shall be
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specifically enforceable only in the District Court of ▇▇▇▇▇▇ County, Texas. A
decision of the arbitrator shall be final, conclusive and binding on the Company
and the Executive, and judgement may be entered in the District Court of ▇▇▇▇▇▇
County, Texas, for enforcement and other benefits. On appointment, the
arbitrator shall then proceed to decide the arbitration subjects in accordance
with the Rules. Any arbitration held in accordance with this paragraph shall be
private and confidential and no person shall be entitled to attend the hearings
except the arbitrator, Executive, Executive's attorneys, and an designated
representatives of the Company and their respective attorneys. The matters
submitted for arbitration, the hearings and proceedings and the arbitration
award shall be kept and maintained in strictest confidence by Executive and the
Company and shall not be discussed, disclosed or communicated to any persons. On
request of any party, the record of the proceeding shall be sealed and may not
be disclosed except insofar, and only insofar, as may be necessary to enforce
the award of the arbitrator and any judgement enforcing an award. The prevailing
party shall be entitled to recover reasonable and necessary attorneys' fees and
costs from the non-prevailing party.
8. Confidentiality. In the course of the performance of Executive's duties
hereunder, Executive recognizes and acknowledges that Executive may have access
to certain confidential and proprietary information of Employer or any of its
affiliates. Without the prior written consent of Employer, Executive shall not
disclose any such confidential or proprietary information to any person or firm,
corporation, association, or other entity for any reason or purpose whatsoever,
and shall not use such information, directly or indirectly, for Executive's own
behalf or on behalf of any other party. Executive agrees and affirms that all
such information is the sole property of Employer and that at the termination
and/or expiration of this Agreement, at Employer's written request, Executive
shall promptly return to Employer any and all such information so requested by
Employer.
(a) The provisions of this Section 8 shall not, however, prohibit Executive
from disclosing to others or using in any manner information that:
(i) has been published or has become part of the public domain other than
by acts, omissions or fault of Executive;
(ii) has been furnished or made known to Executive by third parties (other
than those acting directly or indirectly for or on behalf of
Executive) as a matter of legal right without restriction on its use
or disclosure;
(iii) was in the possession of Executive prior to obtaining such
information from Employer in connection with the performance of this
Agreement; or
(iv) is required to be disclosed by law.
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9. Covenants Not to Compete.
(a) Executive's Acknowledgment. Executive agrees and acknowledges that in
order to assure the Company that it will retain its value as a going concern, it
is necessary that Executive undertake not to utilize his special knowledge of
the business and his relationships with customers and suppliers to compete with
the Company. Executive further acknowledges that:
(i) the Company is and will be engaged in the business;
(ii) Executive will occupy a position of trust and confidence with the
Company prior to the date of this agreement and, during such period
and Executive's employment under this agreement, Executive has, and
will become familiar with the Company's trade secrets and with other
proprietary and confidential information concerning the Company;
(iii) the agreements and covenants contained in this Section 9 are
essential to protect the Company and the goodwill of the business;
and
(iv) Executive's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be
irreparably damaged if Executive were to provide services to any
person or entity in violation of the provisions of this agreement.
(b) Competitive Activities. Executive hereby agrees that for a period
commencing on the date hereof and ending one year following the later of (i)
termination of Executive's employment with the Company for whatever reason, and
(ii) the conclusion of the period, if any, during which the Company is making
payments to Executive, he will not, directly or indirectly, as employee, agent,
consultant, stockholder, director, co-partner or in any other individual or
representative capacity, own, operate, manage, control, engage in, invest in or
participate in any manner in, act as a consultant or advisor to, render services
for (alone or in association with any person, firm, corporation or entity), or
otherwise assist any person or entity (other than the Company) that engages in
or owns, invests in, operates, manages or controls any venture or enterprise
that directly or indirectly engages or proposes in engage in the business of the
manufacturing, distribution or sale of (i) products manufactured, distributed,
sold or licensed by the Company or services provided by the Company at the time
of termination or (ii) products or services proposed at the time of such
termination to be manufactured, distributed, sold, licensed or provided by the
Company within the United States (the "Territory"); provided, however, that
nothing contained herein shall be construed to prevent Executive from investing
in the stock of any competing corporation listed on a national securities
exchange or traded in the over-the-counter market, but only if Executive is not
involved in the business of said corporation and if Executive and his associates
(as such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the date hereof), collectively, do not own
more than an aggregate of two percent of the stock of such corporation. With
respect to the Territory, Executive specifically acknowledges that the Company
has conducted the business throughout those areas comprising the Territory and
the Company intends to continue to expand the business throughout the Territory.
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(c) Blue Pencil. If an arbitrator shall at any time deem the terms of this
agreement or any restrictive covenant too lengthy or the Territory too
extensive, the other provisions of this Section 8 shall nevertheless stand, the
restrictive period shall be deemed to be the longest period permissible by law
under the circumstances and the Territory shall be deemed to comprise the
largest territory permissible by law under the circumstances. The arbitrator in
each case shall reduce the restricted period and/or the Territory to permissible
duration or size.
10. Opportunities. During his employment with the Company, and for one year
thereafter, Executive shall not take any action which might divert from the
Company any opportunity learned about by him during his employment with the
Company (including without limitation during the Employment Term) which would be
within the scope of any of the businesses then engaged in or planned to be
engaged in by the Company.
11. Survival. In the even that this Agreement shall be terminated, then
notwithstanding such termination, the obligations of Executive pursuant to
Sections 6,7,8 9, and 10 of this agreement shall survive such termination.
12. Contents of Agreement, Parties in Interest, Assignment, etc. This
Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Executive hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in part
by Executive. This Agreement shall not be amended except by a written
instrument duly executed by the parties.
13. Severability. If any term or provision of this Agreement shall be held to
be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
14. Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
IF TO THE COMPANY ADDRESSED TO:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
ebaseOne Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
IF TO EXECUTIVE ADDRESSED TO:
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or to such other address as the one party shall specify to the other party in
writing.
15. Counterparts and Headings. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all which together
shall constitute one and the same instrument. All headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
EBASEONE CORPORATION
By: //s// ▇▇▇▇▇▇▇ Skamsrer
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Director and Chief Executive Officer
EXECUTIVE
By: //s// ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
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WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT")
OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 187,500 SHARES OF COMMON STOCK
EBASEONE CORPORATION
(a Delaware corporation)
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Not Transferable or Exercisable Except
upon Conditions Herein Specified
EBASEONE CORPORATION, a Delaware corporation ("Company"), hereby certifies
that ▇▇▇▇▇ ▇▇▇▇▇▇▇, his registered successors and permitted assigns registered
on the books of the Company maintained for such purposes, as the registered
holder hereof ("Holder"), for value received in consideration for services
rendered to the Company, the receipt of which is acknowledged, is entitled to
purchase from the Company the number of fully paid and non-assessable shares of
Common Stock of the Company, $.001 par value ("Shares" or "Common Stock"),
stated above at the purchase price per Share set forth in Section 1(b) below
("Exercise Price") (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided.
1. Exercise of Warrants.
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(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $2.37 per share and
become exercisable as the underlying Shares vest (in the manner as set forth in
(d) below). The Warrant shall expire upon the close of business November 22,
2004.
(c) The Warrant Price shall be payable at the time of exercise. The
Warrant Price may be paid in cash (by check) or by: (i) surrender of shares of
Common Stock of the Company already owned by the Executive, having a Market
Price (as defined below) equal to the exercise price of the Warrant; (ii)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Holder and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Holder irrevocably elects to exercise the Warrant and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (iii) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Holder and an NASD Dealer
whereby the Holder irrevocably elects to exercise the Warrant and to pledge the
Shares so purchased to the NASD Dealer in the amount of the exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (iv) upon surrender of the
Warrant at the principal office of the Company together with notice of election,
in which event the Company shall issue Holder a number of Shares computed using
the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average closing price of
the common stock (if actual sales price information on any trading
day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
common stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the common stock is not quoted or listed by any organization,
the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used).
B = the Exercise Price.
or (v) by any combination of the foregoing.
(d) The Shares underlying the Warrants shall vest, and the Warrants
shall become exercisable with respect to such Shares in as nearly equal as
possible monthly installments over a 24-month period, so long as Holder remains
employed by the Company. In the event Holder ceases to be an employee of the
Company, for any reason, all unvested Shares underlying the Warrants shall
immediately be canceled, and the Warrants will entitle Holder to purchase only
those Shares that have vested prior to the date he ceased to be employed by the
Company. In the event of a "change of control" as defined below, all of the
Shares underlying the Warrants shall vest and become immediately exercisable. A
change of control shall mean and include the following transactions or
situations:
1. A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing fifty (50%) percent or more of the combined voting power of
the Company's then outstanding securities to any "Unrelated Person" or
"Unrelated Persons" acting in concert with one another. For purposes of
this definition, the term "Person" shall mean and include any individual,
partnership, joint venture, association, trust corporation, or other entity
[including a "group" as referred to in Section 13(d)(3) of the Securities
Exchange Act of 1934 ("1934 Act")]. For purposes of this definition, the
term "Unrelated Person" shall mean and include any Person other than the
Company, a wholly-owned subsidiary of the Company, or an employee benefit
plan of the Company; provided however, a sale to underwriters in connection
with a public offering of the Company's securities pursuant to a firm
commitment shall not be a Change of Control.
2. A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
3. A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing
at least fifty (50%) percent of the combined voting power of the Company's
then outstanding securities. For purposes of this definition, the term
"Beneficial Owner" shall have the same meaning as given to that term in
Rule 13d-3 promulgated under the 1934 Act, provided that any pledgee of
voting securities is not deemed to be the Beneficial Owner thereof prior to
its acquisition of voting rights with respect to such securities.
4. Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the
surviving corporation representing at least fifty (50%) percent of the
combined voting power of the surviving corporation's then outstanding
securities.
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5. During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease,
for any reason, to constitute at least a majority thereof, unless the
election or nomination for election of each new director was approved by
the vote of at least two-thirds of the directors then still in office who
were directors at the beginning of such period.
6. A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the 1934 Act, or any successor regulation
of similar importance, regardless of whether the Company is subject to such
reporting requirement.
2. Exchange and Transfer of Warrant.
--------------------------------
At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
3. Rights and Obligations of Warrant Holder.
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(a) The Holder of this Warrant Certificate shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the event that any certificate
-----------------
representing the Shares is issued to the Holder hereof upon exercise of this
Warrant, such Holder shall, for all purposes, be deemed to have become the
holder of record of such Shares on the date on which this Warrant Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such Share
certificate. The rights of the Holder of this Warrant are limited to those
expressed herein and the Holder of this Warrant, by his acceptance hereof,
consents to and agrees to be bound by and to comply with all the provisions of
this Warrant Certificate, including, without limitation, all the obligations
imposed upon the Holder hereof by Sections 2 and 5 hereof. In addition, the
Holder of this Warrant Certificate, by accepting the same, agrees that the
Company may deem and treat the person in whose name this Warrant Certificate is
registered on the books of the Company maintained for such purposes as the
absolute, true and lawful owner for all purposes whatsoever, notwithstanding any
notation of ownership or other writing thereon, and the Company shall not be
affected by any notice to the contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled
to vote or receive dividends or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise, receive notice of meetings or other action
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affecting stockholders (except for notices provided for herein), receive
dividends, subscription rights, or otherwise, until this Warrant shall have been
exercised and the Shares purchasable upon the exercise thereof shall have become
deliverable as provided herein; provided, however, that any such exercise on any
-----------------
date when the stock transfer books of the Company shall be closed shall
constitute the person or persons in whose name or names the certificate or
certificates for those Shares are to be issued as the record holder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open, and the Warrant surrendered shall
not be deemed to have been exercised, in whole or in part as the case may be,
until the next succeeding day on which stock transfer books are open for the
purpose of determining entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
--------------------------
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
5. Disposition of Warrants or Shares.
---------------------------------
(a) The Holder of this Warrant Certificate and any transferee hereof
or of the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 ("Act") or applicable state securities laws ("State
Acts") and shall not be sold, pledged, hypothecated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of an
opinion of counsel favorable to the Company or its counsel or submission to the
Company of such evidence as may be satisfactory to the Company or its counsel,
in each such case, to the effect that any such transfer shall not be in
violation of the Act or the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee of this Warrant deliver to the Company his
written agreement to accept and be bound by all of the terms and conditions of
this Warrant Certificate. The Holder acknowledges that the Company has not
granted any registration rights hereunder.
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
"The securities represented by this certificate have not
been registered under either the Securities Act of 1933
("Act") or the securities laws of any state ("State Acts").
Such securities shall not be sold, pledged, hypothecated, or
otherwise transferred (whether or not for consideration) at
any time whatsoever except upon registration or upon
delivery to the Company of an opinion of its counsel
satisfactory to the Company or its counsel that
5
registration is not required for such transfer or the
submission of such other evidence as may be satisfactory to
the Company or its counsel to the effect that any such
transfer shall not be in violation of the Act, State Acts or
any rule or regulation promulgated thereunder."
6. Adjustments.
-----------
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the exercise price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the exercise price then in
effect (to the nearest whole cent) as follows:
i) in the event such adjustment is caused by stock split, stock
dividend, subdivision, or other similar distribution of shares of
Common Stock, the exercise price in effect, immediately prior to the
effective date of such event shall be decreased to an amount which
shall bear the same relation to the exercise price in effect
immediately prior to such event as the total number of shares of
Common Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately after
such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the exercise price in effect immediately prior
to the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the
exercise price in effect immediately prior to such event as the total
number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock outstanding
immediately after such event.
(c) Upon each adjustment of the exercise price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the exercise price shall
thereafter evidence the right to purchase, at the adjusted exercise price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the exercise price in effect prior to adjustment of the exercise price and (ii)
dividing the product so obtained by the exercise price in effect after such
adjustment of the exercise price.
7. Loss or Destruction.
-------------------
6
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Certificate, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant Certificate of like tenor.
8. Survival.
--------
The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.
9. Notices.
-------
Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof, and
if to the Holder, it will be addressed to the registered Holder at its, his or
her address as it appears on the books of the Company.
EBASEONE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: November 22, 1999
HOLDER:
------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Dated: November 22, 1999
7
WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT")
OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 187,500 SHARES OF COMMON STOCK
EBASEONE CORPORATION
(a Delaware corporation)
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Not Transferable or Exercisable Except
upon Conditions Herein Specified
EBASEONE CORPORATION, a Delaware corporation ("Company"), hereby certifies
that ▇▇▇▇▇ ▇▇▇▇▇▇▇, his registered successors and permitted assigns registered
on the books of the Company maintained for such purposes, as the registered
holder hereof ("Holder"), for value received in consideration for services
rendered to the Company, the receipt of which is acknowledged, is entitled to
purchase from the Company the number of fully paid and non-assessable shares of
Common Stock of the Company, $.001 par value ("Shares" or "Common Stock"),
stated above at the purchase price per Share set forth in Section 1(b) below
("Exercise Price") (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided.
1. Exercise of Warrants.
--------------------
(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $2.50 per share and
become exercisable as the underlying Shares vest (in the manner as set forth in
(d) below). The Warrant shall expire upon the close of business November 22,
2004.
(c) The Warrant Price shall be payable at the time of exercise. The
Warrant Price may be paid in cash (by check) or by: (i) surrender of shares of
Common Stock of the Company already owned by the Executive, having a Market
Price (as defined below) equal to the exercise price of the Warrant; (ii)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Holder and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Holder irrevocably elects to exercise the Warrant and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (iii) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Holder and an NASD Dealer
whereby the Holder irrevocably elects to exercise the Warrant and to pledge the
Shares so purchased to the NASD Dealer in the amount of the exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (iv) upon surrender of the
Warrant at the principal office of the Company together with notice of election,
in which event the Company shall issue Holder a number of Shares computed using
the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average closing price of
the common stock (if actual sales price information on any trading
day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
common stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the common stock is not quoted or listed by any organization,
the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used).
B = the Exercise Price.
or (v) by any combination of the foregoing.
2
(d) The Shares underlying the Warrants are exercisable upon the
earlier of the vesting contingencies as set forth below. The Shares underlying
the Warrants shall vest, and the Warrants shall become exercisable with respect
to such Shares at any time upon the earlier of the following to occur: (i) the
date on which the last sales price of the Company's common stock as reported by
the Nasdaq Stock Market, or if not reported on the Nasdaq Stock Market, a stock
exchange, or the over-the-counter market, exceeds $10.00 per share for at least
30 consecutive trading days commencing on July 1, 2000, or (ii) if the Company
obtains net revenues of $12,000,000 for the 12 months ending December 31, 2000,
as determined by the Company's independent auditors, or (iii) if the Company
obtains net revenues of $50,000,000 for the 12 months ending December 31, 2001,
as determined by the Company's independent auditors. In the event the Company is
a reporting company pursuant to the Securities Exchange Act of 1934, as amended,
("1934 Act") then determination of whether the Company has met items (ii) or
(iii) shall be made upon the filing of the Company's 12 month financial
statements with the Securities and Exchange Commission. If the Company is not
reporting pursuant to the 1934 Act, the determination shall be made within 45
days of December 31.
In the event of a "change of control" as defined below, all of the Shares
underlying the Warrants shall vest and become immediately exercisable. A change
of control shall mean and include the following transactions or situations:
1. A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing fifty (50%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity [including a "group" as
referred to in Section 13(d)(3) of the Securities Exchange Act of 1934 ("1934
Act")]. For purposes of this definition, the term "Unrelated Person" shall mean
and include any Person other than the Company, a wholly-owned subsidiary of the
Company, or an employee benefit plan of the Company; provided however, a sale to
underwriters in connection with a public offering of the Company's securities
pursuant to a firm commitment shall not be a Change of Control.
2. A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
3. A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least fifty (50%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that any pledgee of voting securities
is not deemed to be the Beneficial Owner thereof prior to its acquisition of
voting rights with respect to such securities.
3
4. Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
5. During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.
6. A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2. Exchange and Transfer of Warrant.
--------------------------------
At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
3. Rights and Obligations of Warrant Holder.
----------------------------------------
(a) The Holder of this Warrant Certificate shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the event that any certificate
-----------------
representing the Shares is issued to the Holder hereof upon exercise of this
Warrant, such Holder shall, for all purposes, be deemed to have become the
holder of record of such Shares on the date on which this Warrant Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such Share
certificate. The rights of the Holder of this Warrant are limited to those
expressed herein and the Holder of this Warrant, by his acceptance hereof,
consents to and agrees to be bound by and to comply with all the provisions of
this Warrant Certificate, including, without limitation, all the obligations
imposed upon the Holder hereof by Sections 2 and 5 hereof. In addition, the
Holder of this Warrant Certificate, by accepting the same, agrees that the
Company may deem and treat the person in whose name this Warrant Certificate is
registered on the books of the Company maintained for such purposes as the
absolute, true and lawful owner for all purposes whatsoever, notwithstanding any
notation of ownership or other writing thereon, and the Company shall not be
affected by any notice to the contrary.
4
(b) No Holder of this Warrant Certificate, as such, shall be entitled
to vote or receive dividends or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise, receive notice of meetings or other action affecting stockholders
(except for notices provided for herein), receive dividends, subscription
rights, or otherwise, until this Warrant shall have been exercised and the
Shares purchasable upon the exercise thereof shall have become deliverable as
provided herein; provided, however, that any such exercise on any date when the
-----------------
stock transfer books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificate or certificates for those
Shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open, and the Warrant surrendered shall not be deemed to have
been exercised, in whole or in part as the case may be, until the next
succeeding day on which stock transfer books are open for the purpose of
determining entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
--------------------------
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
5. Disposition of Warrants or Shares.
---------------------------------
(a) The Holder of this Warrant Certificate and any transferee hereof
or of the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 ("Act") or applicable state securities laws ("State
Acts") and shall not be sold, pledged, hypothecated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of an
opinion of counsel favorable to the Company or its counsel or submission to the
Company of such evidence as may be satisfactory to the Company or its counsel,
in each such case, to the effect that any such transfer shall not be in
violation of the Act or the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee of this Warrant deliver to the Company his
written agreement to accept and be bound by all of the terms and conditions of
this Warrant Certificate. The Holder acknowledges that the Company has not
granted any registration rights hereunder.
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
5
"The securities represented by this certificate have not
been registered under either the Securities Act of 1933
("Act") or the securities laws of any state ("State Acts").
Such securities shall not be sold, pledged, hypothecated, or
otherwise transferred (whether or not for consideration) at
any time whatsoever except upon registration or upon
delivery to the Company of an opinion of its counsel
satisfactory to the Company or its counsel that registration
is not required for such transfer or the submission of such
other evidence as may be satisfactory to the Company or its
counsel to the effect that any such transfer shall not be in
violation of the Act, State Acts or any rule or regulation
promulgated thereunder."
6. Adjustments.
-----------
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the exercise price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the exercise price then in
effect (to the nearest whole cent) as follows:
i) in the event such adjustment is caused by stock split, stock
dividend, subdivision, or other similar distribution of shares of
Common Stock, the exercise price in effect, immediately prior to the
effective date of such event shall be decreased to an amount which
shall bear the same relation to the exercise price in effect
immediately prior to such event as the total number of shares of
Common Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately after
such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the exercise price in effect immediately prior
to the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the
exercise price in effect immediately prior to such event as the total
number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock outstanding
immediately after such event.
(c) Upon each adjustment of the exercise price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the exercise price shall
thereafter evidence the right to purchase, at the adjusted exercise price, that
number of shares of Common Stock (calculated to the
6
nearest hundredth) obtained by (i) multiplying the number of shares of Common
Stock issuable upon exercise of the Warrant prior to adjustment of the number of
shares of Common Stock by the exercise price in effect prior to adjustment of
the exercise price and (ii) dividing the product so obtained by the exercise
price in effect after such adjustment of the exercise price.
7. Loss or Destruction.
-------------------
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Certificate, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant Certificate of like tenor.
8. Survival.
--------
The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.
9. Notices.
-------
Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof, and
if to the Holder, it will be addressed to the registered Holder at its, his or
her address as it appears on the books of the Company.
EBASEONE CORPORATION
By: //s// ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: November 22, 1999
HOLDER:
------
By: //s// ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Dated: November 22, 1999
7
WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT")
OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 187,500 SHARES OF COMMON STOCK
EBASEONE CORPORATION
(a Delaware corporation)
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Not Transferable or Exercisable Except
upon Conditions Herein Specified
EBASEONE CORPORATION, a Delaware corporation ("Company"), hereby certifies
that ▇▇▇▇▇ ▇▇▇▇▇▇▇, his registered successors and permitted assigns registered
on the books of the Company maintained for such purposes, as the registered
holder hereof ("Holder"), for value received in consideration for services
rendered to the Company, the receipt of which is acknowledged, is entitled to
purchase from the Company the number of fully paid and non-assessable shares of
Common Stock of the Company, $.001 par value ("Shares" or "Common Stock"),
stated above at the purchase price per Share set forth in Section 1(b) below
("Exercise Price") (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided.
1. Exercise of Warrants.
--------------------
(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $2.75 per share and
become exercisable as the underlying Shares vest (in the manner as set forth in
(d) below). The Warrant shall expire upon the close of business November 22,
2004.
(c) The Warrant Price shall be payable at the time of exercise. The
Warrant Price may be paid in cash (by check) or by: (i) surrender of shares of
Common Stock of the Company already owned by the Executive, having a Market
Price (as defined below) equal to the exercise price of the Warrant; (ii)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Holder and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Holder irrevocably elects to exercise the Warrant and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (iii) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Holder and an NASD Dealer
whereby the Holder irrevocably elects to exercise the Warrant and to pledge the
Shares so purchased to the NASD Dealer in the amount of the exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (iv) upon surrender of the
Warrant at the principal office of the Company together with notice of election,
in which event the Company shall issue Holder a number of Shares computed using
the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average closing price of
the common stock (if actual sales price information on any trading
day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
common stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the common stock is not quoted or listed by any organization,
the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used).
B = the Exercise Price.
or (v) by any combination of the foregoing.
(d) The Shares underlying the Warrants are exercisable upon the
earlier of the vesting contingencies as set forth below. The Shares underlying
the Warrants shall vest, and the Warrants shall become exercisable with respect
to such Shares at any time upon the earlier of the following to occur: (i) the
date on which the last sales price of the Company's common stock as reported by
the Nasdaq Stock Market, or if not reported on the Nasdaq Stock Market, a stock
exchange, or the over-the-counter market, exceeds $10.00 per share for at least
30 consecutive trading days commencing on July 1, 2000, or (ii) if the Company
obtains net revenues of $12,000,000 for the 12 months ending December 31, 2000,
as determined by the Company's independent auditors, or (iii) if the Company
obtains net revenues of $50,000,000 for the 12 months ending December 31, 2001,
as determined by the Company's independent auditors. In the event the Company is
a reporting company pursuant to the Securities Exchange Act of 1934, as amended,
("1934 Act") then determination of whether the Company has met items (ii) or
(iii) shall be made upon the filing of the Company's 12 month financial
statements with the Securities and Exchange Commission. If the Company is not
reporting pursuant to the 1934 Act, the determination shall be made within 45
days of December 31.
In the event of a "change of control" as defined below, all of the Shares
underlying the Warrants shall vest and become immediately exercisable. A change
of control shall mean and include the following transactions or situations:
1. A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing fifty (50%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity [including a "group" as
referred to in Section 13(d)(3) of the Securities Exchange Act of 1934 ("1934
Act")]. For purposes of this definition, the term "Unrelated Person" shall mean
and include any Person other than the Company, a wholly-owned subsidiary of the
Company, or an employee benefit plan of the Company; provided however, a sale to
underwriters in connection with a public offering of the Company's securities
pursuant to a firm commitment shall not be a Change of Control.
2. A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
3. A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least fifty (50%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that
3
any pledgee of voting securities is not deemed to be the Beneficial Owner
thereof prior to its acquisition of voting rights with respect to such
securities.
4. Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
5. During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.
6. A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2. Exchange and Transfer of Warrant.
--------------------------------
At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
3. Rights and Obligations of Warrant Holder.
----------------------------------------
(a) The Holder of this Warrant Certificate shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the event that any certificate
-----------------
representing the Shares is issued to the Holder hereof upon exercise of this
Warrant, such Holder shall, for all purposes, be deemed to have become the
holder of record of such Shares on the date on which this Warrant Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such Share
certificate. The rights of the Holder of this Warrant are limited to those
expressed herein and the Holder of this Warrant, by his acceptance hereof,
consents to and agrees to be bound by and to comply with all the provisions of
this Warrant Certificate, including, without limitation, all the obligations
imposed upon the Holder hereof by Sections 2 and 5 hereof. In addition, the
Holder of this Warrant Certificate, by accepting the same, agrees that the
Company may deem and treat the person in whose name this Warrant Certificate is
registered on the books of the
4
Company maintained for such purposes as the absolute, true and lawful owner for
all purposes whatsoever, notwithstanding any notation of ownership or other
writing thereon, and the Company shall not be affected by any notice to the
contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled
to vote or receive dividends or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise, receive notice of meetings or other action affecting stockholders
(except for notices provided for herein), receive dividends, subscription
rights, or otherwise, until this Warrant shall have been exercised and the
Shares purchasable upon the exercise thereof shall have become deliverable as
provided herein; provided, however, that any such exercise on any date when the
-----------------
stock transfer books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificate or certificates for those
Shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open, and the Warrant surrendered shall not be deemed to have
been exercised, in whole or in part as the case may be, until the next
succeeding day on which stock transfer books are open for the purpose of
determining entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
--------------------------
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
5. Disposition of Warrants or Shares.
---------------------------------
(a) The Holder of this Warrant Certificate and any transferee hereof
or of the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 ("Act") or applicable state securities laws ("State
Acts") and shall not be sold, pledged, hypothecated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of an
opinion of counsel favorable to the Company or its counsel or submission to the
Company of such evidence as may be satisfactory to the Company or its counsel,
in each such case, to the effect that any such transfer shall not be in
violation of the Act or the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee of this Warrant deliver to the Company his
written agreement to accept and be bound by all of the terms and conditions of
this Warrant Certificate. The Holder acknowledges that the Company has not
granted any registration rights hereunder.
5
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
"The securities represented by this certificate have not
been registered under either the Securities Act of 1933
("Act") or the securities laws of any state ("State Acts").
Such securities shall not be sold, pledged, hypothecated, or
otherwise transferred (whether or not for consideration) at
any time whatsoever except upon registration or upon
delivery to the Company of an opinion of its counsel
satisfactory to the Company or its counsel that registration
is not required for such transfer or the submission of such
other evidence as may be satisfactory to the Company or its
counsel to the effect that any such transfer shall not be in
violation of the Act, State Acts or any rule or regulation
promulgated thereunder."
6. Adjustments.
-----------
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the exercise price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the exercise price then in
effect (to the nearest whole cent) as follows:
i) in the event such adjustment is caused by stock split, stock
dividend, subdivision, or other similar distribution of shares of
Common Stock, the exercise price in effect, immediately prior to the
effective date of such event shall be decreased to an amount which
shall bear the same relation to the exercise price in effect
immediately prior to such event as the total number of shares of
Common Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately after
such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the exercise price in effect immediately prior
to the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the
exercise price in effect immediately prior to such event as the total
number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock outstanding
immediately after such event.
6
(c) Upon each adjustment of the exercise price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the exercise price shall
thereafter evidence the right to purchase, at the adjusted exercise price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the exercise price in effect prior to adjustment of the exercise price and (ii)
dividing the product so obtained by the exercise price in effect after such
adjustment of the exercise price.
7. Loss or Destruction.
-------------------
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Certificate, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant Certificate of like tenor.
8. Survival.
--------
The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.
9. Notices.
-------
Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof, and
if to the Holder, it will be addressed to the registered Holder at its, his or
her address as it appears on the books of the Company.
EBASEONE CORPORATION
By: //s// ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: November 22, 1999
HOLDER:
------
By: //s// ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Dated: November 22, 1999
7
WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT")
OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 187,500 SHARES OF COMMON STOCK
EBASEONE CORPORATION
(a Delaware corporation)
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Not Transferable or Exercisable Except
upon Conditions Herein Specified
EBASEONE CORPORATION, a Delaware corporation ("Company"), hereby certifies
that ▇▇▇▇▇ ▇▇▇▇▇▇▇, his registered successors and permitted assigns registered
on the books of the Company maintained for such purposes, as the registered
holder hereof ("Holder"), for value received in consideration for services
rendered to the Company, the receipt of which is acknowledged, is entitled to
purchase from the Company the number of fully paid and non-assessable shares of
Common Stock of the Company, $.001 par value ("Shares" or "Common Stock"),
stated above at the purchase price per Share set forth in Section 1(b) below
("Exercise Price") (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided.
1. Exercise of Warrants.
--------------------
(a) Subject to subsection (b) of this Section 1, upon presentation
and surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $3.00 per share and
become exercisable as the underlying Shares vest (in the manner as set forth in
(d) below). The Warrant shall expire upon the close of business November 22,
2004.
(c) The Warrant Price shall be payable at the time of exercise. The
Warrant Price may be paid in cash (by check) or by: (i) surrender of shares of
Common Stock of the Company already owned by the Executive, having a Market
Price (as defined below) equal to the exercise price of the Warrant; (ii)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Holder and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Holder irrevocably elects to exercise the Warrant and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (iii) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Holder and an NASD Dealer
whereby the Holder irrevocably elects to exercise the Warrant and to pledge the
Shares so purchased to the NASD Dealer in the amount of the exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (iv) upon surrender of the
Warrant at the principal office of the Company together with notice of election,
in which event the Company shall issue Holder a number of Shares computed using
the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average closing price of
the common stock (if actual sales price information on any trading
day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
common stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the common stock is not quoted or listed by any organization,
the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used).
B = the Exercise Price.
or (v) by any combination of the foregoing.
(d) The Shares underlying the Warrants are exercisable upon the
earlier of the vesting contingencies as set forth below. The Shares underlying
the Warrants shall vest, and the Warrants shall become exercisable with respect
to such Shares at any time upon the earlier of the following to occur: (i) the
date on which the last sales price of the Company's common stock as reported by
the Nasdaq Stock Market, or if not reported on the Nasdaq Stock Market, a stock
exchange, or the over-the-counter market, exceeds $10.00 per share for at least
30 consecutive trading days commencing on July 1, 2000, or (ii) if the Company
obtains net revenues of $12,000,000 for the 12 months ending December 31, 2000,
as determined by the Company's independent auditors, or (iii) if the Company
obtains net revenues of $50,000,000 for the 12 months ending December 31, 2001,
as determined by the Company's independent auditors. In the event the Company is
a reporting company pursuant to the Securities Exchange Act of 1934, as amended,
("1934 Act") then determination of whether the Company has met items (ii) or
(iii) shall be made upon the filing of the Company's 12 month financial
statements with the Securities and Exchange Commission. If the Company is not
reporting pursuant to the 1934 Act, the determination shall be made within 45
days of December 31.
In the event of a "change of control" as defined below, all of the Shares
underlying the Warrants shall vest and become immediately exercisable. A change
of control shall mean and include the following transactions or situations:
1. A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing fifty (50%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity [including a "group" as
referred to in Section 13(d)(3) of the Securities Exchange Act of 1934 ("1934
Act")]. For purposes of this definition, the term "Unrelated Person" shall mean
and include any Person other than the Company, a wholly-owned subsidiary of the
Company, or an employee benefit plan of the Company; provided however, a sale to
underwriters in connection with a public offering of the Company's securities
pursuant to a firm commitment shall not be a Change of Control.
2. A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
3. A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least fifty (50%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that
3
any pledgee of voting securities is not deemed to be the Beneficial Owner
thereof prior to its acquisition of voting rights with respect to such
securities.
4. Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
5. During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.
6. A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2. Exchange and Transfer of Warrant.
--------------------------------
At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
3. Rights and Obligations of Warrant Holder.
----------------------------------------
(a) The Holder of this Warrant Certificate shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the event that any certificate
-----------------
representing the Shares is issued to the Holder hereof upon exercise of this
Warrant, such Holder shall, for all purposes, be deemed to have become the
holder of record of such Shares on the date on which this Warrant Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such Share
certificate. The rights of the Holder of this Warrant are limited to those
expressed herein and the Holder of this Warrant, by his acceptance hereof,
consents to and agrees to be bound by and to comply with all the provisions of
this Warrant Certificate, including, without limitation, all the obligations
imposed upon the Holder hereof by Sections 2 and 5 hereof. In addition, the
Holder of this Warrant Certificate, by accepting the same, agrees that the
Company may deem and treat the person in whose name this Warrant Certificate is
registered on the books of the
4
Company maintained for such purposes as the absolute, true and lawful owner for
all purposes whatsoever, notwithstanding any notation of ownership or other
writing thereon, and the Company shall not be affected by any notice to the
contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled
to vote or receive dividends or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise, receive notice of meetings or other action affecting stockholders
(except for notices provided for herein), receive dividends, subscription
rights, or otherwise, until this Warrant shall have been exercised and the
Shares purchasable upon the exercise thereof shall have become deliverable as
provided herein; provided, however, that any such exercise on any date when the
-----------------
stock transfer books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificate or certificates for those
Shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open, and the Warrant surrendered shall not be deemed to have
been exercised, in whole or in part as the case may be, until the next
succeeding day on which stock transfer books are open for the purpose of
determining entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
--------------------------
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
5. Disposition of Warrants or Shares.
---------------------------------
(a) The Holder of this Warrant Certificate and any transferee hereof
or of the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 ("Act") or applicable state securities laws ("State
Acts") and shall not be sold, pledged, hypothecated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of an
opinion of counsel favorable to the Company or its counsel or submission to the
Company of such evidence as may be satisfactory to the Company or its counsel,
in each such case, to the effect that any such transfer shall not be in
violation of the Act or the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee of this Warrant deliver to the Company his
written agreement to accept and be bound by all of the terms and conditions of
this Warrant Certificate. The Holder acknowledges that the Company has not
granted any registration rights hereunder.
5
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
"The securities represented by this certificate have not
been registered under either the Securities Act of 1933
("Act") or the securities laws of any state ("State Acts").
Such securities shall not be sold, pledged, hypothecated, or
otherwise transferred (whether or not for consideration) at
any time whatsoever except upon registration or upon
delivery to the Company of an opinion of its counsel
satisfactory to the Company or its counsel that registration
is not required for such transfer or the submission of such
other evidence as may be satisfactory to the Company or its
counsel to the effect that any such transfer shall not be in
violation of the Act, State Acts or any rule or regulation
promulgated thereunder."
6. Adjustments.
-----------
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the exercise price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the exercise price then in
effect (to the nearest whole cent) as follows:
i) in the event such adjustment is caused by stock split, stock
dividend, subdivision, or other similar distribution of shares of
Common Stock, the exercise price in effect, immediately prior to the
effective date of such event shall be decreased to an amount which
shall bear the same relation to the exercise price in effect
immediately prior to such event as the total number of shares of
Common Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately after
such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the exercise price in effect immediately prior
to the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the
exercise price in effect immediately prior to such event as the total
number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock outstanding
immediately after such event.
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(c) Upon each adjustment of the exercise price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the exercise price shall
thereafter evidence the right to purchase, at the adjusted exercise price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the exercise price in effect prior to adjustment of the exercise price and (ii)
dividing the product so obtained by the exercise price in effect after such
adjustment of the exercise price.
7. Loss or Destruction.
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Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Certificate, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant Certificate of like tenor.
8. Survival.
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The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Certificate.
9. Notices.
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Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified in Section 1 hereof, and
if to the Holder, it will be addressed to the registered Holder at its, his or
her address as it appears on the books of the Company.
EBASEONE CORPORATION
By: //s// ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Dated: November 22, 1999
HOLDER:
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By: //s// ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Dated: November 22, 1999
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