EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 11th 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 Xxxx
Xxxxxxx Overstoltz (the "Executive") an individual currently residing at 0000
Xxxxxxxxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company, as Executive Vice President 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, 2002, unless sooner terminated as provided in accordance with the
provisions of Section 5 hereof. (Such term of employment is herein sometimes
called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
employ the Executive as Executive Vice President 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
Executive Vice President 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) 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 corporations or
charitable institutions (with the permission from the Company's board of
directors); (ii) deliver lectures, fulfill speaking engagements 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. 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
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 $11,500 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 $12,500 per month through December 31, 2000 and $18,750 per month
through the end of the term of this agreement.
(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 $28,000 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 50% of his then base salary rate. 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 3,000,000 shares of Company common stock having the
terms set forth in the warrant agreement attached hereto as Exhibit "A."
(d) Automobile Allowance. For the Employment Term, Executive shall be entitled
to receive an automobile allowance of $750 per month plus the operating
cost and insurance of such vehicle. The automobile allowance shall
increase yearly by $100 beginning each the 1st of January. This vehicle
may be provided either as a company car or direct payment of the allowance
at the Executive's option.
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(e) 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.
(f) 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.
In the event Executive's employment whit the company is terminated for
whatever reason, the Company shall indemnify and hold Executive harmless for any
personal guaranty made by Executive on behalf of the Company.
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
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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
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associates (as such term is defined in Regulation 14(A) promulgated under
the Securities Exchange Act of 1934, as in effect on the date hereof),
collectively, do not own more than an aggregate of two percent of the stock
of such corporation. With respect to the Territory, Executive specifically
acknowledges that the Company has conducted the business throughout those
areas comprising the Territory and the Company intends to continue to
expand the business throughout the Territory.
(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:
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Xxxx Xxxxxxx Overstolz
0000 Xxxxxxxxxxx
Xxxxxxx, 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// Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
Director
By: //s// Xxxx Xxxxxxx Overstolz
---------------------------------
Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EXECUTIVE
By: //s// Xxxx Xxxxxxx Overstolz
---------------------------------
Xxxx Xxxxxxx Overstoltz
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ADDENDUM #1
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, which consideration includes but is not limited to, not
being required to issue management of ebaseOne Corporation additional warrants,
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 11, 1999 between EBASEONE
CORPORATION, a Delaware corporation ("Company") and Xxxx Xxxxxxx Overstolz, an
individual ("Overstolz") (the "Agreement").
Notwithstanding anything in the Agreement, the Company and Overstolz agree
to amend and restate in its entirety Section 4(c) of the Agreement as follows:
(4)(c) Warrants. The Executive will be entitled to receive a five year
warrant to purchase 1,000,000 shares of Company common stock at $2.125 per
share, vesting over a period of 24-months, and expiring October 27, 2004.
Overstolz hereby agrees to waive any and all rights to the warrant to purchase
3,000,000 shares of Company common stock ("Warrant"), which was provided in the
Agreement, and has concurrently delivered to the Company, the Warrant marked
canceled. The Company agrees to issue Overstolz a new warrant to purchase
1,000,000 shares of Company common stock, which is attached hereto as Exhibit
"A".
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// Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx, President
XXXX XXXXXXX OVERSTOLZ, an individual
By: //s// Xxxx Xxxxxxx Overstolz
---------------------------------
Xxxx Xxxxxxx Overstolz
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WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT")
OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE 1,000,000 SHARES OF COMMON STOCK
EBASEONE CORPORATION
(a Delaware corporation)
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Not Transferable or Exercisable Except
upon Conditions Herein Specified
EBASEONE CORPORATION, a Delaware corporation ("Company"), hereby certifies
that Xxxx Xxxxxxx Overstolz, his registered successors and permitted assigns
registered on the books of the Company maintained for such purposes, as the
registered holder hereof ("Holder"), for value received in consideration for
services rendered to the Company, the receipt of which is acknowledged, is
entitled to purchase from the Company the number of fully paid and non-
assessable shares of Common Stock of the Company, $.001 par value ("Shares" or
"Common Stock"), stated above at the purchase price per Share set forth in
Section 1(b) below ("Exercise Price") (the number of Shares and Exercise Price
being subject to adjustment as hereinafter provided) upon the terms and
conditions herein provided.
1. Exercise of Warrants.
--------------------
(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with a certified
or bank cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised at a price of $2.125 per share and
become exercisable as the underlying Shares vest (in the manner as set forth in
(d) below). The Warrant shall expire upon the close of business October 27,
2004.
(c) The Warrant Price shall be payable at the time of exercise. The
Warrant Price may be paid in cash (by check) or by: (i) surrender of shares of
Common Stock of the Company already owned by the Executive, having a Market
Price (as defined below) equal to the exercise price of the Warrant; (ii)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Holder and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Holder irrevocably elects to exercise the Warrant and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (iii) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Holder and an NASD Dealer
whereby the Holder irrevocably elects to exercise the Warrant and to pledge the
Shares so purchased to the NASD Dealer in the amount of the exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (iv) upon surrender of the
Warrant at the principal office of the Company together with notice of election,
in which event the Company shall issue Holder a number of Shares computed using
the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Holder (not to exceed the
number of Shares set forth on the cover page of this Warrant
Agreement, as adjusted pursuant to the provisions of Section 6 of this
Warrant Agreement).
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 1(c)),
the "Market Price" shall be defined as the average closing price of
the common stock (if actual sales price information on any trading day
is not available, the closing bid price shall be used) for the five
trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
common stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the common stock is not quoted or listed by any organization,
the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used).
B = the Exercise Price.
or (vii) by any combination of the foregoing.
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(d) The Shares underlying the Warrants shall vest, and the Warrants shall
become exercisable with respect to such Shares in as nearly equal as possible
monthly installments over a 24-month period, so long as Holder remains employed
by the Company. In the event Holder ceases to be an employee of the Company, for
any reason, all unvested Shares underlying the Warrants shall immediately be
canceled, and the Warrants will entitle Holder to purchase only those Shares
that have vested prior to the date he ceased to be employed by the Company. In
the event of a "change of control" as defined below, all of the Shares
underlying the Warrants shall vest and become immediately exercisable. A change
of control shall mean and include the following transactions or situations:
1. A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing fifty (50%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity [including a "group" as
referred to in Section 13(d)(3) of the Securities Exchange Act of 1934 ("1934
Act")]. For purposes of this definition, the term "Unrelated Person" shall mean
and include any Person other than the Company, a wholly-owned subsidiary of the
Company, or an employee benefit plan of the Company; provided however, a sale to
underwriters in connection with a public offering of the Company's securities
pursuant to a firm commitment shall not be a Change of Control.
2. A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
3. A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least fifty (50%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that any pledgee of voting securities
is not deemed to be the Beneficial Owner thereof prior to its acquisition of
voting rights with respect to such securities.
4. Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
5. During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least
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a majority thereof, unless the election or nomination for election of each new
director was approved by the vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period.
6. A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2. Exchange and Transfer of Warrant.
--------------------------------
At any time prior to the exercise hereof, upon presentation and
surrender to the Company, this Warrant (a) may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, but (b)
may not be sold, transferred, hypothecated, or assigned, in whole or in part,
without the prior written consent of the Company.
3. Rights and Obligations of Warrant holder.
----------------------------------------
(a) The Holder of this Warrant Certificate shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity; provided, however, that in the event that any certificate representing
-----------------
the Shares is issued to the Holder hereof upon exercise of this Warrant, such
Holder shall, for all purposes, be deemed to have become the holder of record of
such Shares on the date on which this Warrant Certificate, together with a duly
executed Purchase Form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The rights
of the Holder of this Warrant are limited to those expressed herein and the
Holder of this Warrant, by his acceptance hereof, consents to and agrees to be
bound by and to comply with all the provisions of this Warrant Certificate,
including, without limitation, all the obligations imposed upon the Holder
hereof by Sections 2 and 5 hereof. In addition, the Holder of this Warrant
Certificate, by accepting the same, agrees that the Company may deem and treat
the person in whose name this Warrant Certificate is registered on the books of
the Company maintained for such purposes as the absolute, true and lawful owner
for all purposes whatsoever, notwithstanding any notation of ownership or other
writing thereon, and the Company shall not be affected by any notice to the
contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled to
vote or receive dividends or to be deemed the holder of Shares for any purpose,
nor shall anything contained in this Warrant Certificate be construed to confer
upon any Holder of this Warrant Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
action by the Company, whether upon any recapitalization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise,
receive notice of meetings or other action affecting stockholders (except for
notices provided for herein), receive dividends, subscription rights, or
otherwise, until this Warrant shall have been exercised and the Shares
purchasable upon the exercise
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thereof shall have become deliverable as provided herein; provided, however,
-----------------
that any such exercise on any date when the stock transfer books of the Company
shall be closed shall constitute the person or persons in whose name or names
the certificate or certificates for those Shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open, and the Warrant
surrendered shall not be deemed to have been exercised, in whole or in part as
the case may be, until the next succeeding day on which stock transfer books are
open for the purpose of determining entitlement to dividends on the Company's
common stock.
4. Shares Underlying Warrants.
--------------------------
The Company covenants and agrees that all Shares delivered upon exercise of
this Warrant shall, upon delivery and payment therefor, be duly and validly
authorized and issued, fully paid and non-assessable, and free from all stamp
taxes, liens and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this Warrant.
5. Disposition of Warrants or Shares.
---------------------------------
(a) The Holder of this Warrant Certificate and any transferee hereof or of
the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 ("Act") or applicable state securities laws ("State
Acts") and shall not be sold, pledged, hypothecated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of an
opinion of counsel favorable to the Company or its counsel or submission to the
Company of such evidence as may be satisfactory to the Company or its counsel,
in each such case, to the effect that any such transfer shall not be in
violation of the Act or the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee of this Warrant deliver to the Company his
written agreement to accept and be bound by all of the terms and conditions of
this Warrant Certificate. The Holder acknowledges that the Company has not
granted any registration rights hereunder.
(b) The stock certificates of the Company that will evidence the shares of
Common Stock with respect to which this Warrant may be exercisable will be
imprinted with a conspicuous legend in substantially the following form:
"The securities represented by this certificate have not
been registered under either the Securities Act of 1933
("Act") or the securities laws of any state ("State Acts").
Such securities shall not be sold, pledged, hypothecated, or
otherwise transferred (whether or not for consideration) at
any time whatsoever except upon registration or upon
delivery to the Company of an opinion of its counsel
satisfactory to the Company or its counsel that registration
is not required for such transfer or the submission of such
other evidence as may be satisfactory to the Company or its
counsel to the effect
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that any such transfer shall not be in violation of the Act,
State Acts or any rule or regulation promulgated
thereunder."
6. Adjustments.
-----------
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a stock split, stock dividend, subdivision, or
similar distribution with respect to the Common Stock, or a combination of the
Common Stock, then, in such event, the exercise price shall be adjusted in
accordance with (b) below.
(b) Immediately upon the effective date of any event requiring adjustment
pursuant to (a), the Company shall adjust the exercise price then in effect (to
the nearest whole cent) as follows:
i) in the event such adjustment is caused by stock split, stock
dividend, subdivision, or other similar distribution of shares of Common
Stock, the exercise price in effect, immediately prior to the effective
date of such event shall be decreased to an amount which shall bear the
same relation to the exercise price in effect immediately prior to such
event as the total number of shares of Common Stock outstanding immediately
prior to such event bears to the total number of shares of Common Stock
outstanding immediately after such event;
ii) in the event such adjustment is caused by a combination of
shares of Common Stock, the exercise price in effect immediately prior to
the close of business on the effective date of such event shall be
increased to an amount which shall bear the same relation to the exercise
price in effect immediately prior to such event as the total number of
shares of Common Stock outstanding immediately prior to such event bears to
the total number of shares of Common Stock outstanding immediately after
such event.
(c) Upon each adjustment of the exercise price pursuant to (b) above, the
Warrant outstanding prior to such adjustment in the exercise price shall
thereafter evidence the right to purchase, at the adjusted exercise price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the exercise price in effect prior to adjustment of the exercise price and (ii)
dividing the product so obtained by the exercise price in effect after such
adjustment of the exercise price.
7. Loss or Destruction.
-------------------
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Certificate and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the
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Company or, in the case of any such mutilation, upon surrender and cancellation
of this Warrant Certificate, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant Certificate of like tenor.
8. Survival.
--------
The various rights and obligations of the Holder hereof as set forth herein
shall survive the exercise of the Warrants represented hereby and the surrender
of this Warrant Certificate.
9. Notices.
-------
Whenever any notice, payment of any purchase price, or other communication
is required to be given or delivered under the terms of this Warrant, it shall
be in writing and delivered by hand delivery or United States registered or
certified mail, return receipt requested, postage prepaid (or similar delivery
if outside of the United States), and will be deemed to have been given or
delivered on the date such notice, purchase price or other communication is so
delivered or posted, as the case may be; and, if to the Company, it will be
addressed to the address specified in Section 1 hereof, and if to the Holder, it
will be addressed to the registered Holder at its, his or her address as it
appears on the books of the Company.
EBASEONE CORPORATION
By: //s// Xxxxxxx Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx, President
Dated: October 27, 1999
HOLDER:
------
By: //s// Xxxx Xxxxxxx Overstolz
-----------------------------------
Xxxx Xxxxxxx Overstolz
Dated: October 27, 1999
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