WARRANT AGREEMENT









EXHIBIT 4.12




 




WARRANT AGREEMENT




 




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 177,700 SHARES OF COMMON STOCK




 




EPICEDGE, INC.




(a

Texas corporation)




5508

Highway 290 West, Suite 300




Austin,

Texas 78745




 




Not

Transferable or Exercisable Except




upon

Conditions Herein Specified




 




EpicEdge, Inc., a Texas corporation

(“Company”), hereby certifies that Brewer

& Pritchard, P.C., its 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, $.01 par value (“Shares”

or “Common Stock”), stated above and as reduced as set forth in Section 1(b) 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 Agreement, 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 Agreement or Warrant

Agreements of like tenor entitling the Holder to purchase the number of Shares

as to which this Warrant has not been exercised.




 








	

  WARRANT

  AGREEMENT


  	

   


  	

  MAY 15, 2001


  










 




1





























 




(b)           Beginning November 15, 2001, this Warrant may be exercised

at a price of $.20 per share in an amount subject to reduction as described in

this section.  The Warrant shall expire

upon the close of business November 15, 2004.




 




(c)           The Exercise Price shall be payable at the time of

exercise.  The Exercise Price:  (i) may be paid in cash (by check), (ii) by

surrender of shares of Common Stock of the Company already owned by the Holder,

or (ii) 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 Option

(the “Average Closing Bid Price”), as reported by the American Stock Exchange

(“AMEX”), or if the common stock is not traded on AMEX, 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.




 




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.




 




2





























 




3.             Rights and Obligations of Warrant Holder.




 




(a)           The Holder of this Warrant Agreement 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 Agreement, 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 Agreement,

including, without limitation, all the obligations imposed upon the Holder

hereof by Sections 2 and 5 hereof.  In

addition, the Holder of this Warrant Agreement, by accepting the same, agrees

that the Company may deem and treat the person in whose name this Warrant

Agreement 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 Agreement 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 Agreement be construed to confer

upon any Holder of this Warrant Agreement any of the rights of a stockholder of

the Company or any right to vote, give or withhold consent to any action by the

Company, whether upon any recapitalization, issue of stock, reclassification of

stock, consolidation, merger, conveyance or otherwise, receive notice of

meetings or other action affecting stockholders (except for notices provided

for herein), receive dividends, subscription rights, or otherwise, until this

Warrant shall have been exercised and the Shares purchasable upon the exercise

thereof shall have become deliverable as provided herein; provided,  however,

that any such exercise on any date when the stock transfer books of the Company

shall be closed shall constitute the person or persons in whose name or names

the certificate or certificates for those Shares are to be issued as the record

holder or holders thereof for all purposes at the opening of business on the

next succeeding day on which such stock transfer books are open, and the

Warrant surrendered shall not be deemed to have been exercised, in whose 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.




 




3





























 




5.             Disposition of Warrants or Shares.




 




(a)           The Holder of this Warrant Agreement and any transferee

hereof or of the Shares issuable upon the exercise of the Warrant Agreement, 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 Act or 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 Agreement.  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 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:




 




4





























 




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 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.




 




(d)           Adjustments for Consolidation, Merger, Sale of Assets,

Reorganization, etc.  In case the

Company (i) consolidates with or merges into any other entity and is not the

continuing or surviving entity of such consolidation or merger, or (ii) permits

any other entity to consolidate with or merge into the Company and the Company

is the continuing or surviving Company but, in connection with such

consolidation or merger, the Common Stock is changed into or exchanged for

common stock or other securities of any other entity or cash or any other

assets, or (iii) transfers all or substantially all of its properties and

assets to any other entity, or (iv) effects a reorganization or

reclassification of the equity of the Company in such a way that holders of Common

Stock shall be entitled to receive stock, securities, cash or assets with

respect to or in exchange for Common Stock, then, and in each such case, proper

provision shall be made so that, upon the exercise of this Warrant at any time

after the consummation of such consolidation, merger, transfer, reorganization

or reclassification, the Holder shall be entitled to receive (at the aggregate

Exercise Price in effect for Common Stock issuable upon such exercise of this

Warrant immediately prior to such consummation), in lieu of Common Stock

issuable upon such exercise of this Warrant prior to such consummation, the

stock and other securities, cash and assets to which such Holder would have

been entitled upon such consummation if such Holder had so exercised this

Warrant immediately prior thereto.




 




5





























 




7.             Loss or Destruction.




 




Upon receipt of evidence

satisfactory to the Company of the loss, theft, destruction or mutilation of

this Warrant Agreement and, in the case of any such loss, theft or destruction,

upon delivery of an indemnity agreement or bond satisfactory in form, substance

and amount to the Company or, in the case of any such mutilation, upon

surrender and cancellation of this Warrant Agreement, the Company will execute

and deliver, in lieu thereof, a new Warrant Agreement 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 Agreement.




 




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 on the cover page 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.




 




	

  EPICEDGE,

  INC.


  	

   


  
	

   


  	

   


  
	

  By:


  	

  /s/ Richard Carter


  	

   


  	

   


  
	

  Richard Carter, Chief

  Executive Officer


  	

   


  
				





 




6





























 




PURCHASE FORM




(To be signed only upon exercise of Warrant)




 




To EpicEdge, Inc.:




 




The undersigned, the holder

of the enclosed Warrant, hereby irrevocably elects to exercise the purchase

right represented by such Warrant for, and to purchase thereunder,                        * shares of Common

Stock of EpicEdge, Inc. and herewith makes payment of $                                      therefor, and requests that the

certificate or certificates for such shares be issued in the name of and

delivered to the undersigned.




 




	

  Dated:


  	

   


  	

   


  	

   


  
	

   


  	

  (Signature must conform in

  all respects to


  name of holder as specified on the face of


  the enclosed Warrant)


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  (Address)


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  (SSN#)


  





 






















(*)                               Insert here the

number of shares called for on the face of the Warrant without making any

adjustment for additional Common Stock or any other stock or other securities

or property or cash which, pursuant to the adjustment provisions of the Warrant

Agreement pursuant to which the Warrant was granted, may be delivered upon

exercise.




 




7