Exhibit 10.1

 

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO
RULE 144(K), OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS.

 

No. 

 

WARRANT AGREEMENT

 

THIS WARRANT AGREEMENT (the “Agreement”) is effective this 19th day of May,
2006, between PRIMAL SOLUTIONS, INC., a Delaware corporation (the “Company”) and
                           (“Grantee”).

 

WITNESSETH:

 

WHEREAS, the Company desires to grant to Grantee a warrant to purchase the
common stock, par value $.01 per share, of the Company (“Common Stock”), in
consideration of Grantee’s services as a member of the Company’s Board of
Directors under the terms and conditions set forth in this Agreement; and

 

WHEREAS, Grantee desires to be granted the warrant described herein;

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Grant of Warrant. The Company hereby
grants to Grantee the right (the “Warrant”) to purchase an aggregate of up to
                                 (            ) shares (the “Shares”) of Common
Stock, such Shares being subject to adjustment as provided in Section 6 hereof,
on the terms and conditions herein set forth.

 

2.                                       Purchase Price. The purchase price of
the Shares shall be $0.10 per Share.

 

3.                                       Exercise of Warrant. Unless expired as
provided in Section 5 below, this Warrant may be exercised, in whole or in part,
at any time and from time to time after the date first set forth above (the
“Date of Grant”), through and including the Expiration Date (as that term is
defined in Section 5 below).

 

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4.                                       Manner of Exercise, Payment of Purchase
Price.

 

(a)                                  Subject to the terms and conditions of this
Agreement, the Warrant shall be exercised by written notice to the Company at
its principal office. Such notice shall state the election to exercise the
Warrant and specify the number of Shares to be purchased. Such notice of
exercise shall be signed by Grantee and shall be irrevocable when given.

 

(b)                                 The notice of exercise shall be accompanied
by full payment of the purchase price for the Shares to be purchased, and shall
be paid to the Company in cash (including check, bank draft or money order).

 

(c)                                  The amount, as determined by the Company,
of any federal, state or local tax required to be withheld by the Company due to
the exercise of a Warrant shall, subject to the authorization of the Company, be
satisfied by payment by Grantee to the Company of the amount of such withholding
obligation in cash. The cash payment shall be remitted by the Company to the
appropriate taxing authorities.

 

(d)                                 Upon receipt of the purchase price, and
subject to the terms of Section 8, the certificate or certificates representing
the Shares purchased shall be registered in the name of the person or persons so
exercising the Warrant. If the Warrant shall be exercised by Grantee and, if
Grantee shall so request in the notice exercising the Warrant, the Shares shall
be registered in the name of Grantee and another person as joint tenants with
right of survivorship, and shall be delivered as provided above to or upon the
written order of the person or persons exercising the Warrant. All Shares that
shall be purchased upon the exercise of the Warrant as provided herein shall be
fully paid and nonassessable.

 

5.                                       Expiration of Warrant. The Warrant
shall expire and become null and void on the date that is ten (10) years after
the Date of Grant (the “Expiration Date”).

 

6.                                       Adjustments of Shares Subject to
Warrant. The Shares subject to the Warrant shall be adjusted from time to time
as set forth in this Section 6. The determination of any such adjustment by the
Company shall be final, binding and conclusive.

 

(a)                                  In the event of any stock split, stock
dividend, reverse stock split, combination of Shares or any other similar
increase or decrease in the number of Shares issued and outstanding (a
“Reorganization”), the number of Shares subject to this Agreement, and the
exercise price of each Share, shall (to the extent deemed appropriate by the
Company) be proportionately adjusted (as determined by the Company in its sole
and absolute discretion) to account for any increase or decrease in the number
of issued and outstanding Shares of the Company resulting from such
Reorganization.

 

(b)                                 If any recapitalization (other than a
transaction contemplated by Section 6(a) above), merger, consolidation or
conversion involving the Company or any exchange of securities involving the
Common Stock (a “Corporate Transaction”) is

 

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consummated and immediately following the consummation of such Corporate
Transaction the persons or entities who were holders of shares of Common Stock
immediately prior to the consummation of such Corporate Transaction do not
receive any securities or other property (hereinafter collectively referred to
as “Transactional Consideration”) as a result of such Corporate Transaction and
continue to hold the shares of Common Stock held by them immediately prior to
the consummation of such Corporate Transaction, the Warrant will remain
outstanding and will continue in full force and effect (without any
modification) following the consummation of the Corporate Transaction.

 

(c)                                  If a Corporate Transaction is consummated
and immediately following the consummation of such Corporate Transaction the
persons or entities who were holders of shares of Common Stock immediately prior
to the consummation of such Corporate Transaction do receive Transactional
Consideration as a result of such Corporate Transaction or do not continue to
hold the shares of Common Stock held by them immediately prior to the
consummation of such Corporate Transaction, the terms and conditions of the
Warrant will be modified as follows:

 

(1)                                  If the documentation pursuant to which a
Corporate Transaction will be consummated provides for the assumption of this
Agreement without any modification or amendment by the entity issuing
Transactional Consideration to the persons or entities who were holders of
shares of Common Stock immediately prior to the consummation of such Corporate
Transaction, the Warrant will remain outstanding and will continue in full force
and effect following the consummation of such Corporate Transaction.

 

(2)                                  If the documentation pursuant to which a
Corporate Transaction will be consummated does not provide for the assumption of
this Agreement without any modification or amendment by the entity issuing
Transactional Consideration to the persons or entities who were the holders of
shares of Common Stock immediately prior to the consummation of such Corporate
Transaction, Grantee may (subject to the expiration of the term of the Warrant),
exercise/receive the benefits of the Warrant at any time prior to the
consummation of such Corporate Transaction. The Company will provide Grantee
with reasonable notice of the impending termination of the Warrant. Upon the
consummation of such a Corporate Transaction, all unexercised Warrants that are
not to be assumed will automatically terminate and cease to be outstanding.

 

Nothing contained in this Section 6 will be deemed to extend the term of the
Warrant or to revive the Warrant if it has previously lapsed or been canceled,
terminated or surrendered.

 

7.                                       Rights as Stockholder. This Warrant
shall not entitle Grantee to any rights of a stockholder of the Company or,
except as otherwise provided herein, to any notice of proceedings of the Company
with respect to any Shares issuable upon exercise of this Warrant unless and
until the Warrant has been exercised for such Shares and such Shares have been
registered in Grantee’s name upon the stock records of the Company.

 

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8.                                       Restriction on Issuance of Shares. The
Company shall not be required to issue or deliver any certificates for Shares
purchased upon the exercise of a Warrant prior to: (a) the obtaining of any
approval from any governmental agency that the Company shall, in its sole
discretion, determine to be necessary or advisable; (b) the completion of any
registration or other qualification of such Shares under any state or federal
law or ruling or regulation of any governmental body that the Company shall, in
its sole and absolute discretion, determine to be necessary or advisable; and
(c) the determination by the Company that Grantee has tendered to the Company
any federal, state or local tax owed by Grantee as a result of exercising the
Warrant when the Company has a legal liability to satisfy such tax obligation.
In addition, if the Common Stock reserved for issuance upon the exercise of
Warrants shall not then be registered under the Securities Act of 1933, as
amended from time to time (or any successor to such legislation), the Company
may upon Grantee’s exercise of a Warrant, require Grantee or its permitted
transferee to represent in writing that the Shares being acquired are for
investment and not with a view to distribution, and may mark the certificate for
the Shares with a legend restricting transfer and may issue stop transfer orders
relating to such certificate to the Company’s transfer agent (if applicable).

 

9.                                       Binding Effect. This Agreement shall be
binding upon the heirs, executors, administrators, and successors of the parties
hereto.

 

10.                                 Entire Agreement. There are no oral
agreements between the parties relating to the subject matter hereof, and this
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof. This Agreement may not be amended except by written
agreement executed by the Company and Grantee.

 

 

PRIMAL SOLUTIONS, INC.

 

 

By:

 

 

Date:

 

 

Name:

 

 

 

Title:

 

 

 

 

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