Exhibit 10.4
Date: November 15, 2004
To: Aegis Assessments, Inc.
From: Cogent Capital Corp.
SUBJECT: EQUITY OPTION TRANSACTION
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The purpose of this communication is to set forth the terms and conditions
of the Call Option transaction entered into on the Trade Date referred to below
(the "Option Transaction"), between Cogent Capital Corp., a Utah corporation
("Cogent" or "we") and Aegis Assessments, Inc., a Utah corporation ("Aegis
Assessments" or "you"). This communication constitutes a "Confirmation" as
referred to in the ISDA Master Agreement specified below.
This Confirmation incorporates the definitions and provisions contained in
the 2002 ISDA Equity Derivatives Definitions as published by the International
Swap and Derivatives Association, Inc. (the "Equity Definitions"). In the event
of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
1. This Confirmation will supplement, form a part of, and be subject to the
ISDA Master Agreement dated as of November 15, 2004 between Aegis Assessments
and Cogent (the "Master Agreement"). All provisions contained in, or
incorporated by reference to, the Master Agreement shall govern this
Confirmation except as expressly modified below. In the event of any
inconsistency between the provisions of that Master Agreement and this
Confirmation, this Confirmation shall prevail for the purpose of this Equity
Option Transaction. In addition, this Confirmation shall itself evidence a
complete and binding agreement between you and us as to the terms and conditions
of the Equity Option Transaction to which this Confirmation relates.
Cogent and Aegis Assessments each represents that entering into the Equity
Transaction is authorized and does not violate any laws of its jurisdiction of
organization or residence or the terms of any agreement to which it is a party.
Cogent and Aegis Assessments each represents that (i) it is not relying on the
other party in connection with its decision to enter into this Option
Transaction, and neither party is acting as an advisor or fiduciary of the other
party in connection with this Option Transaction regardless of whether the other
party provides it with market information or its views; (ii) it understands the
risks of the Option Transaction and any legal, regulatory, tax, accounting and
economic consequences resulting therefrom; and (iii) it has determined based
upon its own judgment and upon any advice received from its own professional
advisors as it has deemed necessary to consult that entering into the Option
Transaction is appropriate for such party in light of its financial capabilities
and objectives.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
Trade Date: November 15, 2004
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Option Style: European
Option Type: Call
Seller: Cogent
Buyer: Aegis Assessments
Shares: Aegis Assessments, Inc. common shares ("AEGIS
ASSESSMENTS") CUSIP number ____________
Number of Options: 3,200,000
Option Entitlement: 1 Share per Option
Strike Price: The "Strike Price" shall equal the average of
the Relevant Prices for the Averaging Dates
relating to that Expiration Date.
Averaging Dates: The ten trading days up to and including that
Expiration Date
Averaging Date Disruption: Modified Postponement
Relevant Price: For each Averaging Date, the average of the
bid and ask price per Share as determined by
the Calculation Agent at the Valuation Time
on that Averaging Date.
Valuation Time: The closing time on the Exchange
Premium: $1
Premium Payment Date: Trade Date
Exchange: All Exchanges
Related Exchange(s): All Exchanges
Clearance System(s): DTC or Physical Certificate(s)
Knock-in Event: Applicable. The "Knock-in Event" shall occur
at the time that the disbursements
contemplated by Section 2 of the Escrow
Agreement (as defined in the Schedule to the
Master Agreement) have been completed, but
only if such disbursements are completed on
or before the Knock-in Determination Day.
Knock-in Determination Day(s): November 30, 2004
Procedures for Exercise:
Latest Exercise Time: Notice given 12:00 noon, New York time,
September 29, 2006
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Expiration Time: The official closing time on the Exchange
Expiration Date: November 15, 2006
Multiple Exercise: Not Applicable
Automatic Exercise: Not Applicable
Minimum Number of Options: The Number of Options. As a result, this
Option may only be exercised in whole, and
not in part.
Seller's Telephone Number and
Telex and/or Facsimile Number and
Contact Details for purpose of giving
Notice: Telephone: 000-000-0000
Facsimile: 000-000-0000
Settlement Terms:
Physical Settlement: Applicable. Certificates with standard Rule
144 transfer restrictions may be used for
good delivery.
Settlement Currency: USD
Settlement Method Election: Not Applicable
Default Settlement Method: Physical Settlement
Adjustments:
Method of Adjustment: Calculation Agent Adjustment
Options Exchange: Related Exchange
Extraordinary Events:
Consequences of Merger Events:
Share-for-Share: Calculation Agent Adjustment
Share-for-Other: Calculation Agent Adjustment
Share-for-Combined: Calculation Agent Adjustment
Tender Offer:
Applicable
Consequences of Tender Offers:
Share-for-Share: Calculation Agent Adjustment
Share-for-Other: Calculation Agent Adjustment
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Share-for-Combined: Calculation Agent Adjustment
Composition of Combined Consideration: Applicable
Nationalization, Insolvency or Delisting: Negotiated Close-Out
Additional Disruption Events:
Change in Law: Applicable
Failure to Deliver: Applicable
Insolvency Filing: Applicable
Determining Party: Cogent
Non-Reliance: Applicable
4. Calculation Agent: Cogent
5. Account Details:
Account for payments to Cogent: To be provided.
Account for payments to Aegis Assessments To be provided.
Account for delivery of Shares to Aegis Assessments: To be provided.
6. Relationship between the parties:
(a) Except as expressly provided herein, each party acknowledges that
in connection with entering into this Transaction, it has not
entered into any agreements, arrangements or understandings with
the other party or any related entity of such party in relation
to timing or manner of any acquisition or disposal of any Shares,
the voting rights attaching to any Shares or the management of
the Issuer.
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7. Governing Law: the laws of the State of New York (without reference to
choice of law doctrine).
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Transaction to which this Confirmation relates and indicates your agreement
to those terms.
Yours sincerely,
Cogent Capital Corp.
By: /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx President
Confirmed as of the date
first above written:
Aegis Assessments, Inc.
By: /s/Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
CEO
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