EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 16th day of August, 1999, between ebaseOne
Corporation, a Delaware corporation, currently having its principal place of
business at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 (the "Company"), and
Xxxxxxx Xxxxxxx (the "Executive") an individual currently residing at 0000
Xxxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company, as President and Chief Executive Officer of the
Company.
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, 2001, 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 President and Chief Executive Officer 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; Board Membership.
(a) Duties. Executive shall perform such duties as are usually performed by a
President/Chief Executive Officer 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 board of directors 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) Board Membership. Upon commencement of this agreement, the board of
directors shall use its best efforts to nominate and cause the election of
Executive to the Company's board of directors to fill a currently existing
vacancy.
(c) 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 the extent necessary to discharge
the responsibilities assigned to Executive and to use reasonable best
efforts to perform faithfully and efficiently such responsibilities.
During the term of this agreement it shall not be a violation of this
agreement for Executive to (i) serve on the boards of XxxxxXxxxxx.xxx, IDT
(or its successor), AtlanticPacific Communications, and ChillOut Misters as
an active director; (ii) deliver lectures, fulfill speaking engagement to
teach at educational institutions; (iii) manage personal investments or
companies in which personal investments are made so long as such activities
do not significantly interfere with the performance of Executive's
responsibilities with the Company and which companies are not in direct
competition with the Company; or (iv) provide consulting services to
Bradford Brothers, KnowledgeWire,
and other companies that are currently supported by Executive's consulting
practice, New Enterprise Solutions, however it is expressly understood that
Executive will limit his participation with the foregoing companies.
Executive has agreed not to pursue any additional clients unless they have
strategic value to the Company, as approved by the board of directors. In
addition, Executive must obtain written permission from the Company's board
of directors in order to serve on any additional boards. Any income
received by Executive outside the scope of his employment and permitted
pursuant to the provisions hereof, shall inure to the benefit of Executive,
and the Company shall not claim any entitlement thereto. Executive has
agreed not to pursue any additional clients unless they have strategic
value to the Company, as approved by the board of directors.
4. Compensation and Benefits During the Employment Term.
(a) Base Compensation. The Executive's base compensation from the Commencement
Date through December 31, 1999, shall be at the rate of $12,500 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. Executive acknowledges that initially
such base compensation may have to be accrued, based upon the Company's
current working capital. Thereafter, the Executive's base compensation
shall be $15,000 per month. 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 follows:
(i) Before December 31, 1999, the Executive has agreed to work toward
meeting the following objectives ("MBOs"): (i) raise working capital
necessary to begin implementation of the business plan; (ii) build an
enterprise center in Houston; (ii) secure agreements to host packaged
software applications under a subscription agreement or like
agreement with one or more vendors for sales force automation,
financial management, customer relationship management, human
resource management and electronic business; (iii) hire the necessary
personnel to execute the business plan; and (iv) secure initial
customers per the business plan. After December 31, 1999, the
Company's board of directors shall determine what material progress
the Executive has made toward meeting the above captioned MBOs and
shall pay the Executive a bonus of up to $125,000 based upon the
percentage of MBOs met. Said bonus shall be paid on or before the end
of January 2000.
(ii) If, no later than December 31, 2000, the Company successfully
implements and meets certain agreed upon milestones, as determined by
the Company's board of directors in January 2000, Executive will be
entitled to receive $180,000. If the board of directors is unable to
agree on the milestones, the Executive will receive the bonus in the
event the Company attains $12 million in net revenues for December
31, 2000, as determined by the Company's independent auditors. In any
event, the bonus shall be paid upon the earlier of (x) 12 month
financial statements filed with the Securities and Exchange
Commission, or (y) March 31, 2001.
(iii) Subsequent bonuses will be determined by the board of directors.
(c) Warrants. The Executive will be entitled to receive five year warrants to
purchase an aggregate 10,000,000 shares of Company common stock having the
terms set forth in the warrant agreement 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.
(b) Death. This agreement shall terminate upon the death of Executive.
(c) With Cause. The Company may terminate this agreement at any time because
of:
(i) Executive's material breach of any term of this agreement, which is
not cured after ten (10) days written notice from the board of
directors, or
(ii) commission by the Executive of a felony or an act of fraud against
the Company.
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 specifically enforceable only in the
District Court of Xxxxxx 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 Xxxxxx 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. 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 8 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 (i) 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, or (ii) investments in XxxxxXxxxxx.xxx, IDT (or its
successor), AtlanticPacific Communications, and ChillOut Misters
("Permitted Investments"). 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.
(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.
9. 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.
10. Survival. In the even that this Agreement shall be terminated, then
notwithstanding such termination, the obligations of Executive pursuant to
Sections 6,7,8 and 9 of this agreement shall survive such termination.
11. 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.
12. 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.
13. 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
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
WITH A COPY TO:
Xxxxxx & Xxxxxxxxx, P.C.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
IF TO EXECUTIVE ADDRESSED TO:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
or to such other address as the one party shall specify to the other party in
writing.
14. 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// Xxxx Xxxxxxx Overstolz
-------------------------------------------
Xxxx Xxxxxxx Overstolz, Chairman of the Board
EXECUTIVE
By: //s// Xxxxxxx Xxxxxxx
-------------------------------------------
Xxxxxxx Xxxxxxx
ADDENDUM #1
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree that this Addendum, entered
into this 27th day of October, 1999, shall amend, to the extent set forth in
this Addendum, the employment agreement entered into on August ___, 1999 between
EBASEONE CORPORATION, a Delaware corporation ("Company") and Xxxxxxx Xxxxxxx, an
individual ("Xxxxxxx") (the "Agreement").
Notwithstanding anything in the Agreement, the Company and Xxxxxxx agree to
amend and restate in its entirety, the following section of the Agreement 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.")
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the
Agreement to be executed on the day and year set forth above.
EBASEONE CORPORATION
By: //s// Xxxx Xxxxxxx Overstolz
-------------------------------------------
Xxxx Xxxxxxx Overstolz, Chairman of the Board
XXXXXXX XXXXXXX, an individual
By: //s// Xxxxxxx Xxxxxxx
-------------------------------------------
Xxxxxxx Xxxxxxx
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 4,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
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"Warrant,"and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by Skamser as to all or
any lesser number of shares of Common Stock covered thereby, at a Exercise Price
of $.38 per share, subject to adjustment as provided in Section 5 below, for the
exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
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authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
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(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any sale
----------------------
or other disposition of the Shares except pursuant to a registration statement
which has become effective under the Act, setting forth the terms of such
offering, the underwriting discount and commissions and any other pertinent data
with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Warrants become exercisable as the underlying
---------------
Shares vest (in the manner set forth below) and expire August 11, 2004. 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 Xxxxxxx remains employed by the
Company. In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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)
Page 2
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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
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in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly
Page 3
executed by the Warrant holder, in the manner and at the place provided in
Section 3(b) above, accompanied by payment as determined by 3(d) below, in
amount obtained by multiplying the number of shares of the Common Stock
designated by the Warrant holder in the form of subscription attached to the
Warrant by the Exercise Price per share (after giving effect to any adjustments
as provided in Section 5 below). Upon any such partial exercise, the Company at
its expense will forthwith issue and deliver to or upon the order of the Warrant
holder a new Warrant of like tenor, in the name of the Warrant holder subject to
Section 2(a), calling in the aggregate for the purchase of the number of shares
of the Common Stock equal to the number of such shares called for on the face of
the respective Warrant (after giving effect to any adjustment herein as provided
in Section 5 below) minus the number of such shares designated by the Warrant
holder in the aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
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by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the Company
together with notice of election, in which event the Company shall issue Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the Warrant is
being exercised.
A = the Market Price of one share of Common Stock (for purposes
of this Section 2(d), the "Market Price" shall be defined as the
closing price of the Common Stock on the business day immediately
prior to the Date of Exercise of this Warrant (the "Closing Bid
Price"), as reported by Nasdaq, or if the Common Stock is not
traded on Nasdaq, the 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 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 of $.38.
Page 4
4. Delivery of Stock Certificates on Exercise.
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Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(c). The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price,
and the number and kind of Shares receivable upon exercise, in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be proportionately adjusted
so that any Warrants the Warrant holder has exercised after such time shall be
entitled to receive the aggregate number and kind of Shares which, if such
Warrant had been exercised immediately prior to such record date, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. Such adjustment shall
be made successively whenever any event listed above shall occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
Page 5
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the exercise
--------------
of the Warrants shall be validly issued, fully paid and nonassessable; the
Warrant holder shall, upon such delivery, receive good and marketable title to
the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
7. Other Warrant holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by Section
2(a) hereof, of a Warrant properly endorsed shall take such Warrant subject to
the provisions of Section 2(a) hereof and thereupon shall be authorized to
represent himself as absolute owner thereof and, subject to the restrictions
contained in this Warrant Agreement, shall be empowered to transfer absolute
title by endorsement and delivery thereof to a permitted bona fide purchaser for
value; (b) any person who shall become a holder or owner of Shares shall take
such shares subject to the provisions of Section 2(b) hereof; (c) each prior
taker or owner waives and renounces all of his equities or rights in such
Warrant in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; and (d) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.
Page 6
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: //s// Xxxx Xxxxxxx Overstoltz
-------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
//s// Xxxxxxx Xxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase
4,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $.38
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By //s// Xxxx Xxxxxxx Overstoltz
------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 2,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
---------
"Warrant,"and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by Skamser as to all or
any lesser number of shares of Common Stock covered thereby, at an Exercise
Price of $1.00 per share, subject to adjustment as provided in Section 5 below,
for the exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
--------------------------
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
--------
(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any
----------------------
sale or other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth the terms of
such offering, the underwriting discount and commissions and any other pertinent
data with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Warrants become exercisable as the underlying
---------------
Shares vest (in the manner set forth below) and expire August 11, 2004. 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 Xxxxxxx remains employed by the
Company. In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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)
Page 2
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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
----------------
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
Page 3
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by the Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment as determined by 3(d) below, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Exercise Price per share
(after giving effect to any adjustments as provided in Section 5 below). Upon
any such partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the Warrant holder a new Warrant of like tenor,
in the name of the Warrant holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
-------------------------
by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the
Company together with notice of election, in which event the Company shall issue
Holder a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the Warrant is
being exercised.
A = the Market Price of one share of Common Stock (for purposes
of this Section 2(d), the "Market Price" shall be defined as the
closing price of the Common Stock on the business day immediately
prior to the Date of Exercise of this Warrant (the "Closing Bid
Price"), as reported by Nasdaq, or if the Common Stock is not
traded on Nasdaq, the 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 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 of $1.00.
Page 4
4. Delivery of Stock Certificates on Exercise.
------------------------------------------
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(c). The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price,
and the number and kind of Shares receivable upon exercise, in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be proportionately adjusted
so that any Warrants the Warrant holder has exercised after such time shall be
entitled to receive the aggregate number and kind of Shares which, if such
Warrant had been exercised immediately prior to such record date, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. Such adjustment shall
be made successively whenever any event listed above shall occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
Page 5
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the exercise
--------------
of the Warrants shall be validly issued, fully paid and nonassessable; the
Warrant holder shall, upon such delivery, receive good and marketable title to
the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
7. Other Warrant Holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by Section
2(a) hereof, of a Warrant properly endorsed shall take such Warrant subject to
the provisions of Section 2(a) hereof and thereupon shall be authorized to
represent himself as absolute owner thereof and, subject to the restrictions
contained in this Warrant Agreement, shall be empowered to transfer absolute
title by endorsement and delivery thereof to a permitted bona fide purchaser for
value; (b) any person who shall become a holder or owner of Shares shall take
such shares subject to the provisions of Section 2(b) hereof; (c) each prior
taker or owner waives and renounces all of his equities or rights in such
Warrant in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; and (d) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.
Page 6
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: //s// Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
//s// Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase
2,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $1.00
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By //s// Xxxx Xxxxxxx Overstoltz
--------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 1,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
---------
"Warrant," and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock purchasable
upon exercise of the Warrants is subject to adjustment as provided in Section 5
below. The Warrants will be exercisable by Skamser as to all or any lesser
number of shares of Common Stock covered thereby, at an Exercise Price of $1.50
per share, subject to adjustment as provided in Section 5 below, for the
exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
--------------------------
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
--------
(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any
----------------------
sale or other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth the terms of
such offering, the underwriting discount and commissions and any other pertinent
data with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Shares underlying the Warrants are exercisable
---------------
upon the earlier of the vesting contingencies as set forth below and expire
August 11, 2006. 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 $5.00 per share for at least 30 consecutive trading days, 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.
Page 2
In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
Page 3
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
----------------
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by the Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment as determined by 3(d) below, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Exercise Price per share
(after giving effect to any adjustments as provided in Section 5 below). Upon
any such partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the Warrant holder a new Warrant of like tenor,
in the name of the Warrant holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
-------------------------
by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the
Company together with notice of election, in which event the Company shall issue
Holder a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the Warrant
is being exercised.
Page 4
A = the Market Price of one share of Common Stock (for purposes
of this Section 2(d), the "Market Price" shall be defined as
the closing price of the Common Stock on the business day
immediately prior to the Date of Exercise of this Warrant (the
"Closing Bid Price"), as reported by Nasdaq, or if the Common
Stock is not traded on Nasdaq, the 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 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 of $1.50.
4. Delivery of Stock Certificates on Exercise.
------------------------------------------
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(c). The term "Other Securities" refers to any stock (other than Common Stock),
other securities or assets (including cash) of the Company or any other person
(corporate or otherwise) which the holders of the Warrants at any time shall be
entitled to receive, or shall have received, upon the exercise of the Warrants,
in lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing
Page 5
corporation), then in each case the Exercise Price, and the number and kind of
Shares receivable upon exercise, in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination, or
reclassification shall be proportionately adjusted so that any Warrants the
Warrant holder has exercised after such time shall be entitled to receive the
aggregate number and kind of Shares which, if such Warrant had been exercised
immediately prior to such record date, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the
--------------
exercise of the Warrants shall be validly issued, fully paid and nonassessable;
the Warrant holder shall, upon such delivery, receive good and marketable title
to the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
Page 6
7. Other Warrant Holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by Section
2(a) hereof, of a Warrant properly endorsed shall take such Warrant subject to
the provisions of Section 2(a) hereof and thereupon shall be authorized to
represent himself as absolute owner thereof and, subject to the restrictions
contained in this Warrant Agreement, shall be empowered to transfer absolute
title by endorsement and delivery thereof to a permitted bona fide purchaser for
value; (b) any person who shall become a holder or owner of Shares shall take
such shares subject to the provisions of Section 2(b) hereof; (c) each prior
taker or owner waives and renounces all of his equities or rights in such
Warrant in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; and (d) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
/s/ Xxxxxxx Xxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase
1,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $1.50
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By //s// Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 1,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
---------
"Warrant,"and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by Skamser as to all or
any lesser number of shares of Common Stock covered thereby, at an Exercise
Price of $2.00 per share, subject to adjustment as provided in Section 5 below,
for the exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
--------------------------
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
--------
(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any
----------------------
sale or other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth the terms of
such offering, the underwriting discount and commissions and any other pertinent
data with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Shares underlying the Warrants are exercisable
---------------
upon the earlier of the vesting contingencies as set forth below and expire
August 11, 2006. 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 $5.00 per share for at least 30 consecutive trading
days, 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.
Page 2
In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
Page 3
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
----------------
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by the Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment as determined by 3(d) below, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Exercise Price per share
(after giving effect to any adjustments as provided in Section 5 below). Upon
any such partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the Warrant holder a new Warrant of like tenor,
in the name of the Warrant holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
-------------------------
by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the Company
together with notice of election, in which event the Company shall issue Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the Warrant
is being exercised.
Page 4
A = the Market Price of one share of Common Stock (for purposes
of this Section 2(d), the "Market Price" shall be defined as the
closing price of the Common Stock on the business day
immediately prior to the Date of Exercise of this Warrant (the
"Closing Bid Price"), as reported by Nasdaq, or if the Common
Stock is not traded on Nasdaq, the 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 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 of $2.00.
4. Delivery of Stock Certificates on Exercise.
------------------------------------------
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(c). The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price,
and the number and kind of Shares receivable upon
Page 5
exercise, in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination, or reclassification shall be
proportionately adjusted so that any Warrants the Warrant holder has exercised
after such time shall be entitled to receive the aggregate number and kind of
Shares which, if such Warrant had been exercised immediately prior to such
record date, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the
--------------
exercise of the Warrants shall be validly issued, fully paid and nonassessable;
the Warrant holder shall, upon such delivery, receive good and marketable title
to the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
7. Other Warrant Holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the
Page 6
limitations on transfer imposed by Section 2(a) hereof, of a Warrant properly
endorsed shall take such Warrant subject to the provisions of Section 2(a)
hereof and thereupon shall be authorized to represent himself as absolute owner
thereof and, subject to the restrictions contained in this Warrant Agreement,
shall be empowered to transfer absolute title by endorsement and delivery
thereof to a permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to the
provisions of Section 2(b) hereof; (c) each prior taker or owner waives and
renounces all of his equities or rights in such Warrant in favor of each such
permitted bona fide purchaser, and each such permitted bona fide purchaser shall
acquire absolute title thereto and to all rights presented thereby; and (d)
until such time as the respective Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the absolute
owner thereof for all purposes, notwithstanding any notice to the contrary.
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
/s/ Xxxxxxx Xxxxxxx
--------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase
1,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $2.00
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By /s/ Xxxx Xxxxxxx Overstoltz
------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 1,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
---------
"Warrant,"and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by Skamser as to all or
any lesser number of shares of Common Stock covered thereby, at an Exercise
Price of $2.50 per share, subject to adjustment as provided in Section 5 below,
for the exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
--------------------------
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
--------
(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any
----------------------
sale or other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth the terms of
such offering, the underwriting discount and commissions and any other pertinent
data with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Shares underlying the Warrants are exercisable
---------------
upon the earlier of the vesting contingencies as set forth below and expire
August 11, 2006. 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 $5.00 per share for at least 30 consecutive trading
days, 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.
Page 2
In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
Page 3
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
----------------
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by the Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment as determined by 3(d) below, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Exercise Price per share
(after giving effect to any adjustments as provided in Section 5 below). Upon
any such partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the Warrant holder a new Warrant of like tenor,
in the name of the Warrant holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
-------------------------
by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the Company
together with notice of election, in which event the Company shall issue Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the Warrant
is being exercised.
Page 4
A = the Market Price of one share of Common Stock (for purposes
of this Section 2(d), the "Market Price" shall be defined as the
closing price of the Common Stock on the business day
immediately prior to the Date of Exercise of this Warrant (the
"Closing Bid Price"), as reported by Nasdaq, or if the Common
Stock is not traded on Nasdaq, the 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 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 of $2.50.
4. Delivery of Stock Certificates on Exercise.
------------------------------------------
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(c). The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price,
and the number and kind of Shares receivable upon
Page 5
exercise, in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination, or reclassification shall be
proportionately adjusted so that any Warrants the Warrant holder has exercised
after such time shall be entitled to receive the aggregate number and kind of
Shares which, if such Warrant had been exercised immediately prior to such
record date, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the
--------------
exercise of the Warrants shall be validly issued, fully paid and nonassessable;
the Warrant holder shall, upon such delivery, receive good and marketable title
to the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
7. Other Warrant Holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the
Page 6
limitations on transfer imposed by Section 2(a) hereof, of a Warrant properly
endorsed shall take such Warrant subject to the provisions of Section 2(a)
hereof and thereupon shall be authorized to represent himself as absolute owner
thereof and, subject to the restrictions contained in this Warrant Agreement,
shall be empowered to transfer absolute title by endorsement and delivery
thereof to a permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to the
provisions of Section 2(b) hereof; (c) each prior taker or owner waives and
renounces all of his equities or rights in such Warrant in favor of each such
permitted bona fide purchaser, and each such permitted bona fide purchaser shall
acquire absolute title thereto and to all rights presented thereby; and (d)
until such time as the respective Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the absolute
owner thereof for all purposes, notwithstanding any notice to the contrary.
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase
1,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $2.50
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EBASEONE CORPORATION
WARRANT AGREEMENT
-----------------
Date: August 16, 1999
Xx. Xxxxxxx Xxxxxxx:
ebaseOne Corporation ("Company"), for value received, hereby agrees to
issue a stock purchase warrant entitling Xxxxxxx Xxxxxxx ("Xxxxxxx" or "Warrant
holder") to purchase 1,000,000 shares of the Company's common stock ("Common
Stock"). Such warrant is evidenced by the warrant certificate in the form
attached hereto as Exhibit 1 (the instrument being hereinafter referred to as a
---------
"Warrant,"and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by Skamser as to all or
any lesser number of shares of Common Stock covered thereby, at an Exercise
Price of $3.00 per share, subject to adjustment as provided in Section 5 below,
for the exercise period defined in Section 3(a) below.
1. Representations and Warranties.
------------------------------
The Company represents and warrants to the Warrant holder as follows:
(a) Corporate and Other Action. The Company has all requisite power and
--------------------------
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants ("Shares"), and to
perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, the Warrant issued pursuant hereto, has been or will
be duly executed and delivered by the Company and is or will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
------------
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument,
Page 1
judgment, decree, order, statute, rule or regulation to which the Company is a
party or by which it is bound.
2. Transfer.
--------
(a) Transferability of Warrants. The Warrant holder agrees that the
---------------------------
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
hypothecated except as provided herein. The Warrant holder further acknowledges
that the Warrants may not be transferred, sold, assigned or hypothecated unless
pursuant to a registration statement that has become effective under the
Securities Act of 1933, as amended ("Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless the Warrant
holder has provided the Company with an acceptable opinion from acceptable
counsel that such registration is not required. Certificates representing the
Warrants shall bear an appropriate legend.
(b) Registration of Shares. The Warrant holder agrees not to make any
----------------------
sale or other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth the terms of
such offering, the underwriting discount and commissions and any other pertinent
data with respect thereto, unless he has provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in Section 2, shall bear an appropriate legend and be subject to a
"stop-transfer"order.
(c) No Registration Rights. The Warrant holder acknowledges that the
----------------------
Company has not granted, and does not intend to grant, the Warrant holder any
registration rights with respect to the Warrants or to the Shares underlying the
Warrants.
3. Exercise of Warrants, Partial Exercise.
--------------------------------------
(a) Exercise Period. The Shares underlying the Warrants are exercisable
---------------
upon the earlier of the vesting contingencies as set forth below and expire
August 11, 2006. 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 $5.00 per share for at least 30 consecutive trading
days, 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.
Page 2
In the event Xxxxxxx 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 Xxxxxxx 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:
(i) 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 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
Page 3
(vi) 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.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
----------------
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office in Houston, Texas, Attention: Xxxx Xxxxxxx
Overstoltz, accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of shares of the Common Stock represented by
the respective Warrant or Warrants by the Exercise Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), the Warrant may be
----------------
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by the Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment as determined by 3(d) below, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Exercise Price per share
(after giving effect to any adjustments as provided in Section 5 below). Upon
any such partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the Warrant holder a new Warrant of like tenor,
in the name of the Warrant holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Payment of Exercise Price. Payment of the Exercise Price may be made
-------------------------
by any of the following, or a combination thereof, at the election of Holder:
(i) cash, certified check or cashier's check or wire transfer; or
(ii) surrender of the Warrants at the principal office of the Company
together with notice of election, in which event the Company shall issue Holder
a number of shares of Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock 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 5 of this Warrant Agreement).
Y = the number of shares of Common Stock for which the
Warrant is being exercised.
Page 4
A = the Market Price of one share of Common Stock (for
purposes of this Section 2(d), the "Market Price" shall be
defined as the closing price of the Common Stock on the
business day immediately prior to the Date of Exercise of
this Warrant (the "Closing Bid Price"), as reported by
Nasdaq, or if the Common Stock is not traded on Nasdaq, the
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 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 of $3.00.
4. Delivery of Stock Certificates on Exercise.
------------------------------------------
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Exercise Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such the Warrant holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrant holder
would otherwise be entitled, cash in an amount determined pursuant to Section
6(e). The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Exercise Price and Number of Shares Purchasable.
-------------------------------------------------------------
The Exercise Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding Shares, (iii) combine the outstanding Common Stock
into a smaller number of Common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price,
and the number and kind of Shares receivable upon
Page 5
exercise, in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination, or reclassification shall be
proportionately adjusted so that any Warrants the Warrant holder has exercised
after such time shall be entitled to receive the aggregate number and kind of
Shares which, if such Warrant had been exercised immediately prior to such
record date, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
(c) Upon each adjustment of the Exercise Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying the
number of Shares purchasable upon exercise of a Warrant immediately prior to
adjustment of the number of Shares 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 immediately after such adjustment of the Exercise
Price.
6. Further Covenants of the Company.
--------------------------------
(a) Title to Stock. All shares of Common Stock delivered upon the
--------------
exercise of the Warrants shall be validly issued, fully paid and nonassessable;
the Warrant holder shall, upon such delivery, receive good and marketable title
to the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(b) Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant holder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(c) Fractional Shares. No fractional Shares are to be issued upon the
-----------------
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount as
determined by the Board of Directors.
7. Other Warrant Holders: Holders of Shares.
----------------------------------------
The Warrants are issued upon the following terms, to all of which the
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the
Page 6
limitations on transfer imposed by Section 2(a) hereof, of a Warrant properly
endorsed shall take such Warrant subject to the provisions of Section 2(a)
hereof and thereupon shall be authorized to represent himself as absolute owner
thereof and, subject to the restrictions contained in this Warrant Agreement,
shall be empowered to transfer absolute title by endorsement and delivery
thereof to a permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to the
provisions of Section 2(b) hereof; (c) each prior taker or owner waives and
renounces all of his equities or rights in such Warrant in favor of each such
permitted bona fide purchaser, and each such permitted bona fide purchaser shall
acquire absolute title thereto and to all rights presented thereby; and (d)
until such time as the respective Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the absolute
owner thereof for all purposes, notwithstanding any notice to the contrary.
8. Miscellaneous.
-------------
All notices, certificates and other communications from or at the request
of the Company to the Warrant holder shall be mailed by first class, registered
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 16th day of August, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
The above Warrant Agreement is confirmed
as of the date set forth above.
/s/ Xxxxxxx Xxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxx
Page 7
Exhibit 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
Warrant No. ____ To Purchase
1,000,000 Shares of
Common Stock
EBASEONE CORPORATION
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of ebaseOne Corporation (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of August 16, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: Xxxxxxx Xxxxxxx Date: August 16, 1999
Exercise Price
Per Share: $3.00
Expiration Date: See Section 3 of the Warrant Agreement
WITNESS the signature of the Corporation's authorized officer:
EBASEONE CORPORATION
By /s/ Xxxx Xxxxxxx Overstoltz
-------------------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
