Document:

Exhibit 10.4

 

[FORM
OF WARRANT]

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN
A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:

Number of Shares: 
              (1)

Date of Issuance: June     , 2004 (“Issuance Date”)

 

Artemis International Solutions Corporation, a Delaware corporation
(the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, [                                          ], the registered holder hereof or its
permitted assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the
Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including all Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after
the date hereof, but not after 11:59 P.M., New York Time, on the Expiration
Date (as defined below), [                  (              )(2)] fully paid nonassessable shares of Common
Stock (as defined below)  (the “Warrant Shares”).  Except as otherwise defined herein, capitalized terms in this
Warrant shall have the meanings set forth in Section 15.  This Warrant is one of the Warrants to
Purchase Common Stock (the “SPA Warrants”)
issued pursuant to Section 1 of that certain Securities Purchase Agreement,
dated as of June     , 2004 (the “Subscription Date”), among the Company and the buyers (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”).

 

(1)                                  Insert
number of shares equal to investment amount divided by the purchase price times
10%.

 

(2)                                  Same
as above.

 

 

1.                                       EXERCISE
OF WARRANT.

 

(a)                                  Mechanics
of Exercise.  Subject to the terms and conditions hereof,
this Warrant may be exercised by the Holder on any day, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of
the Holder’s election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by
wire transfer of immediately available funds or (B) by notifying the Company
that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(d)).  The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder.  Execution
and delivery of the Exercise Notice with respect to less than all of the
Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares.  On or before the first Business Day
following the date on which the Company has received each of the Exercise
Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the
“Exercise Delivery Documents”),
the Company shall transmit by facsimile an acknowledgment of confirmation of
receipt of the Exercise Delivery Documents to the Holder and the Company’s
transfer agent (the “Transfer Agent”).  On or before the third Business Day
following the date on which the Company has received all of the Exercise
Delivery Documents (the “Share Delivery Date”),
the Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program and that the Common Stock is
eligible, upon the request of the Holder, credit such aggregate number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its
Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and
dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise.  Upon
delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause (ii)(A) above or notification to the Company of a Cashless Exercise
referred to in Section 1(d), the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery
of the certificates evidencing such Warrant Shares.  If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the number of Warrant
Shares being acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than three Business Days after any exercise
and at its own expense, issue a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number (with
one-half being rounded upward).  The
Company shall pay any and all taxes, including without limitation, all
documentary stamp, transfer or similar taxes, or other incidental expense that
may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.

 

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(b)                                 Exercise
Price.  For purposes of this
Warrant, “Exercise Price” means
$2.64, subject to adjustment as provided herein.

 

(c)                                  Company’s
Failure to Timely Deliver Securities. 
(i)  In addition to any other
rights available to a Holder, if the Company fails to deliver or cause to be
delivered to the Holder a certificate representing Warrant Shares by the
Business Day after the date on which delivery of such certificate is required
by this Warrant, and if on or after such Business Day the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B)
the Closing Price on the Exercise Date.

 

(ii)                                  If the provisions of
clause (i) above shall not apply, if the Company shall fail for any reason or
for no reason to issue to the Holder within three Business Days of the Exercise
Date, a certificate for the number of shares of Common Stock to which the
Holder is entitled or to credit the Holder’s balance account with DTC for such
number of shares of Common Stock to which the Holder is entitled upon the
Holder’s exercise of this Warrant, the Company shall pay as additional damages
in cash to such Holder on each day after such third  Business Day that the issuance of such Common Stock is not
timely effected an amount equal to 1.0% of the product of (A) the number of
shares of Common Stock not issued to the Holder on a timely basis and to which
the Holder is entitled and (B) the Closing Sale Price of the Common Stock on
the trading day immediately preceding the last possible date which the Company
could have issued such Common Stock to the Holder without violating Section
1(a).

 

(iii)                               If within three (3)
Business Days of the Exercise Date, the Company fails to deliver a new Warrant
to the Holder for the number of shares of Common Stock to which such Holder is
entitled, the Company shall pay as additional damages in cash to such Holder on
the day after such third Business Day that such delivery of such new Warrant is
not timely effected an amount equal to 1.0% of the product of (A) the number of
shares of Common Stock represented by the portion of this Warrant which is not
being exercised and (B) the Closing Sale Price of the Common Stock on the trading
day immediately preceding the last possible date which the Company could have
issued such Warrant to the holder without violating Section 1(a).

 

(d)                                 Cashless
Exercise.  Notwithstanding anything contained herein to the
contrary, the Holder may, in its sole discretion, exercise this Warrant in
whole or in part and, in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such

 

3

 

exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):

 

Net Number = (A x B) - (A x C)

B

For purposes of the foregoing formula:

 

A= the total number of shares with respect to
which this Warrant is then being exercised.

 

B= the Closing Sale Price of the Common Stock
(as reported by Bloomberg) on the date immediately preceding the date of the
Exercise Notice.

 

C= the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.

 

(e)                                  Disputes.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the Holder the number of
Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.

 

2.                                       ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:

 

(a)                                  [Reserved].

 

(b)                                 Adjustment
upon Subdivision or Combination of Common Stock.  If the Company at any time after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be
proportionately increased.  If the
Company at any time on or after the Subscription Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

 

(c)                                  [Reserved.]

 

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3.                                       RIGHTS
UPON DISTRIBUTION OF ASSETS.  If the
Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement or other similar transaction) (a
“Distribution”), at any time after
the issuance of this Warrant, then, in each such case:

 

(a)                                  any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing
Sale Price of the Common Stock on the trading day immediately preceding such
record date minus the value of the Distribution (as determined in good faith by
the Company’s Board of Directors) applicable to one share of Common Stock, and
(ii) the denominator shall be the Closing Sale Price of the Common Stock on the
trading day immediately preceding such record date; and

 

(b)                                 the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding paragraph (a); provided that in
the event that the Distribution is of common stock (“Other Common Stock”) of a company whose common stock is traded
on a national securities exchange or a national automated quotation system,
then the Holder may elect to receive a warrant to purchase Other Common Stock
in lieu of an increase in the number of Warrant Shares, the terms of which
shall be identical to those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Common Stock that would have
been payable to the Holder pursuant to the Distribution had the Holder
exercised this Warrant immediately prior to such record date and with an
aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this
paragraph (b).

 

4.                                       PURCHASE
RIGHTS; ORGANIC CHANGE.

 

(a)                                  Purchase
Rights.  In addition to any
adjustments pursuant to Section 2 or 3 above, if at any time the Company
grants, issues or sells any Options (other than options issued pursuant to an
Approved Stock Plan), Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

 

5

 

(b)                                 Organic
Change.  Any recapitalization,
reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets to another Person or other
transaction, in each case which is effected in such a way that holders of
Common Stock are entitled to receive securities or assets with respect to or in
exchange for Common Stock is referred to herein as an “Organic Change.”  Prior to the consummation of any (i) sale of all or substantially
all of the Company’s assets to an acquiring Person or (ii) other Organic Change
following which the Company is not a surviving entity, the Company will secure
from the Person purchasing such assets or the Person issuing the securities or
providing the assets in such Organic Change (in each case, the “Acquiring Entity”) a written agreement (in
form and substance reasonably satisfactory to the holders of SPA Warrants
representing at least a majority of the shares of Common Stock obtainable upon
exercise of the SPA Warrants then outstanding) to deliver to the Holder in exchange
for this Warrant, a security of the Acquiring Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant and
reasonably satisfactory to the Holder (including, an adjusted exercise price
equal to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
shares of Common Stock acquirable and receivable upon exercise of this
Warrant).  In the event that an
Acquiring Entity is directly or indirectly controlled by a company or entity
whose common stock or similar equity interest is listed, designated or quoted
on a securities exchange or trading market, the Holder may elect to treat such
Person as the Acquiring Entity for purposes of this Section 4(b).  Prior to the consummation of any other
Organic Change, the Company shall be required to make appropriate provision (in
form and substance reasonably satisfactory to the holders of SPA Warrants representing
at least a majority of the shares of Common Stock obtainable upon exercise of
the SPA Warrants then outstanding) to insure that the Holder thereafter will
have the right to acquire and receive in lieu of or in addition to (as the case
may be) the shares of Common Stock immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, securities
or assets that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of shares of Common Stock which would
have been acquirable and receivable upon the exercise of this Warrant as of the
date of such Organic Change.

 

5.                                       NONCIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, and
will at all times in good faith carry out all the provisions of this Warrant
and take all action as may be required to protect the rights of the
Holder.  Without limiting the generality
of the foregoing, the Company (i) will not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, and (iii) will, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
exercise of the SPA Warrants, 125% of the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of the SPA Warrants
then outstanding (without regard to any limitations on exercise).

 

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6.                                       WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. 
Except as otherwise specifically provided herein, the Holder, solely in
such Person’s capacity as a holder, of this Warrant shall not be entitled to
vote or receive dividends or be deemed the holder of shares of the Company for
any purpose, nor shall anything contained in this Warrant be construed to
confer upon the Holder, solely in such Person’s capacity as a holder of this
Warrant, any of the rights of a shareholder of the Company or any right to
vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of
the Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any
liabilities on such Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 6, the Company
will provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the
giving thereof to the stockholders.

 

7.                                       REISSUANCE
OF WARRANTS.

 

(a)                                  Transfer
of Warrant.  The Holder may transfer
this Warrant and the rights hereunder only in accordance with applicable
securities laws.  If this Warrant is to
be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the
Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less then the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 7(d)) to the Holder representing the right to
purchase the number of Warrant Shares not being transferred.

 

(b)                                 Lost,
Stolen or Mutilated Warrant.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant (in accordance with Section 7(d)) representing the right
to purchase the Warrant Shares then underlying this Warrant.

 

(c)                                  Warrant
Exchangeable for Multiple Warrants. 
This Warrant is exchangeable, upon the surrender hereof by the Holder at
the principal office of the Company, for a new Warrant or Warrants (in
accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender; provided,
however, that no Warrants for fractional shares of Common Stock shall be
given.

 

(d)                                 Issuance
of New Warrants.  Whenever the
Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor

 

7

 

with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as
indicated on the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as this Warrant.

 

8.                                       NOTICES.  Whenever notice is required to be given
under this Warrant, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase
Agreement.  The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this
Warrant, including in reasonable detail a description of such action and the
reason therefore.  Without limiting the
generality of the foregoing, the Company will give written notice to the Holder
(i) promptly upon any adjustment of the Exercise Price or number of Warrant
Shares or number or kind of securities purchasable upon exercise of this
Warrant, setting forth in reasonable detail, and certifying, the facts
requiring such adjustment and the calculation of such adjustment and (ii) at
least fifteen days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any grants, issues or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property to holders of Common Stock or (C) for determining rights to vote
with respect to any Change of Control (as defined in the Certificate of
Designations), dissolution or liquidation, provided in each case that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder.

 

9.                                       AMENDMENT
AND WAIVER.  Except as otherwise
provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of SPA Warrants representing at least a majority of the
shares of Common Stock obtainable upon exercise of the SPA Warrants then
outstanding; provided that no such action may increase the exercise price of
any SPA Warrant or decrease the number of shares or class of stock obtainable
upon exercise of any SPA Warrant without the written consent of the
Holder.  No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
SPA Warrants then outstanding.

 

10.                                 GOVERNING
LAW.  This Warrant shall be
construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Warrant shall be
governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York.

 

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11.                                 CONSTRUCTION;
HEADINGS.  This Warrant shall be
deemed to be jointly drafted by the Company and all the Purchasers and shall
not be construed against any person as the drafter hereof.  The headings of this Warrant are for
convenience of reference and shall not form part of, or affect the interpretation
of, this Warrant.

 

12.                                 DISPUTE
RESOLUTION.  (a)     In the case of a dispute as to the
arithmetic calculation of the Exercise Price or the arithmetic calculation of
the Warrant Shares, the Company shall submit the disputed arithmetic
calculations via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder.  The Holder and the Company shall determine
the correct arithmetic calculation within three Business days of such disputed
arithmetic calculation being transmitted to such holder.  If the Holder and the Company are unable to
agree upon correct arithmetic calculation of the Exercise Price or the Warrant
Shares within such time, then the Company shall, within two Business Days,
submit via facsimile the disputed calculation to an independent, reputable
nationally recognized accounting firm selected jointly by the Company and the
Holder.  The Company shall cause the
accounting firm to perform the calculation and notify the Company and the
Holder of the results no later than ten Business Days from the time it receives
the disputed determinations or calculations. 
Such accounting firm’s determination shall be binding upon all parties
absent manifest error.

 

(b)                                 In
the case of a dispute as to the determination of fair market value of a
security to determine the Exercise Price, the Company shall submit the disputed
determination via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination being
submitted to the Holder, then the Company shall, within two Business Days,
submit via facsimile the disputed determination of the Exercise Price to an
independent, reputable investment bank or accountant selected jointly by the
Company and the Holder.  The Company
shall cause the investment bank or the accountant, as the case may be, to
perform the determinations and notify the Company and the Holder of the results
no later than ten Business Days from the time it receives the disputed
determinations or calculations.  Such
investment bank’s determination shall be binding upon all parties absent
demonstrable error.

 

(c)                                  The
fees and expenses associated with the determinations made by such investment
bank or accountant shall be bourne by the parties hereto in inverse proportion
to the resolution of the discrepancy that is the subject of the dispute.

 

13.                                 REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this
Warrant or any other Transaction Document (as defined in the Securities
Purchase Agreement), at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder right to pursue actual damages for any failure by the
Company to comply with the terms of this Warrant. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the
event of any such breach or threatened

 

9

 

breach, the Holder shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

14.                                 TRANSFER.  This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, subject to
applicable securities laws.

 

15.                                 CERTAIN
DEFINITIONS.  For purposes of this
Warrant, the following terms shall have the following meanings:

 

(a)                                  “Approved Stock Plan” means any employee
benefit plan which has been approved by the Board of Directors of the Company,
pursuant to which the Company’s securities may be issued to employees, officers
or independent directors for services provided to the Company.

 

(b)                                 “Bloomberg” means Bloomberg Financial
Markets.

 

(c)                                  “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

 

(d)                                 “Closing Bid Price” and “Closing Sale Price” mean, for any security
as of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market (as defined in the
Securities Purchase Agreement), as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price, as the case may be, then the last
bid price or last trade price, respectively, of such security prior to 4:00
p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is
not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on
the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of such security
in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade
price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.).  If the
Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or
the Closing Sale Price, as the case may be, of such security on such date shall
be the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder
are unable to agree upon the fair market value of such security, then such
dispute shall be resolved pursuant to Section 12.  All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

 

(e)                                  “Common Stock” means (i) the Company’s
common stock, par value $.001 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock resulting
from a reclassification of such Common Stock.

 

10

 

(f)                                    “Convertible Securities” means any stock or
securities (other than Options) directly or indirectly convertible into or
exercisable or exchangeable for Common Stock.

 

(g)                                 “Expiration Date” means the date five years
after the Closing Date (as defined in the Securities Purchase Agreement) or, if
such date falls on a day other than a Business Day or on which trading does not
take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

(h)                                 “Options” means any rights, warrants or
options to subscribe for or purchase Common Stock or Convertible Securities.

 

(i)                                     “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any
department or agency thereof.

 

(j)                                     “Registration Rights Agreement” means that
certain registration rights agreement by and among the Company and the
Purchasers.

 

(k)                                  “SPA Securities” means the Series A
Convertible Preferred Stock of the Company issued pursuant to the Securities
Purchase Agreement.

 

[Signature Page Follows]

 

11

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.

 

	
   

  	
  ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE
COMMON STOCK

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

 

The
undersigned holder hereby exercises the right to purchase
                                  
of the shares of Common Stock (“Warrant
Shares”) of Artemis International Solutions Corporation, a Delaware
corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). 
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

 

1.  Form of Exercise Price.  The Holder intends that payment of the
Exercise Price shall be made as:

 

a “Cash Exercise”
with respect to                                   
Warrant Shares; and/or

 

a “Cashless Exercise”
with respect to
                              
Warrant Shares.

 

2.  Payment of Exercise Price.  In the event that the holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum
of
$                                      
to the Company in accordance with the terms of the Warrant.

 

3.  Delivery of Warrant Shares.  The Company shall deliver to the holder
                    
Warrant Shares in accordance with the terms of the Warrant.

 

Date:
                              
    ,        

 

	
   

  	
   

  
	
  Name of Registered Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Exercise Notice and hereby directs
American Stock Transfer & Trust Co. to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
June     , 2004 from the Company and acknowledged and
agreed to by American Stock Transfer & Trust Co.

 

	
   

  	
  ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit 10.5

 

[FORM OF ADDITIONAL WARRANT]

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN
A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:
[           ]

Number of Shares:  (Calculated pursuant to §2(a) hereof)

Date of Issuance: June     , 2004 (“Issuance Date”)

 

Artemis International Solutions Corporation, a Delaware corporation
(the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, [               ],
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms
set forth below, including, but not limited to the satisfaction of the
condition set forth in Section 2(a) hereof, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including all Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after
the date hereof, but not after 11:59 P.M., New York Time, on the Expiration
Date (as defined below), fully paid nonassessable shares, in such amount as
calculated pursuant to §2(a) hereof, of Common Stock (as defined below)  (the “Warrant
Shares”).  Except as
otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 15.  This
Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1
of that certain Securities Purchase Agreement, dated as of June
   , 2004 (the “Subscription
Date”), among the Company and the buyers (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”).

 

 

1.     EXERCISE OF WARRANT.

 

(a)           Mechanics
of Exercise.  Subject to the terms
and conditions hereof, this Warrant may be exercised by the Holder on any day,
in whole or in part, by (i) delivery of a written notice, in the form attached
hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii)
(A) payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being
exercised (the “Aggregate Exercise Price”)
in cash or by wire transfer of immediately available funds or (B) by notifying
the Company that this Warrant is being exercised pursuant to a Cashless
Exercise (as defined in Section 1(d)). 
The Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder. 
Execution and delivery of the Exercise Notice with respect to less than
all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. 
On or before the first Business Day following the date on which the
Company has received each of the Exercise Notice and the Aggregate Exercise
Price (or notice of a Cashless Exercise) (the “Exercise Delivery Documents”), the Company shall transmit by
facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company’s transfer agent (the “Transfer Agent”).  On or before the third Business Day following the date on which
the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall
(X) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated
Securities Transfer Program and that the Common Stock is eligible, upon the
request of the Holder, credit such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or
its designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder is entitled pursuant to such exercise.  Upon delivery of the Exercise Notice and Aggregate
Exercise Price referred to in clause (ii)(A) above or notification to the
Company of a Cashless Exercise referred to in Section 1(d), the Holder shall be
deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the certificates evidencing such
Warrant Shares.  If this Warrant is
submitted in connection with any exercise pursuant to this Section 1(a) and the
number of Warrant Shares represented by this Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised.  No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the
number of shares of Common Stock to be issued shall be rounded up to the
nearest whole number (with one-half being rounded upward).  The Company shall pay any and all taxes,
including without limitation, all documentary stamp, transfer or similar taxes,
or other incidental expense that may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant.

 

2

 

(b)           Exercise
Price.  For purposes of this
Warrant, “Exercise Price” means
$.01, subject to adjustment as provided herein.

 

(c)           Company’s
Failure to Timely Deliver Securities. 
(i)  In addition to any other
rights available to a Holder, if the Company fails to deliver or cause to be
delivered to the Holder a certificate representing Warrant Shares by the
Business Day after the date on which delivery of such certificate is required
by this Warrant, and if on or after such Business Day the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B)
the Closing Price on the Exercise Date.

 

(ii)           If
the provisions of clause (i) above shall not apply, if the Company shall fail
for any reason or for no reason to issue to the Holder within three Business
Days of the Exercise Date, a certificate for the number of shares of Common
Stock to which the Holder is entitled or to credit the Holder’s balance account
with DTC for such number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise of this Warrant, the Company shall pay as
additional damages in cash to such Holder on each day after such third  Business Day that the issuance of such
Common Stock is not timely effected an amount equal to 1.0% of the product of
(A) the sum of the number of shares of Common Stock not issued to the Holder on
a timely basis and to which the Holder is entitled and (B) the Closing Sale
Price of the Common Stock on the trading day immediately preceding the last
possible date which the Company could have issued such Common Stock to the
Holder without violating Section 1(a).

 

(iii)          If
within three (3) Business Days of the Exercise Date, the Company fails to
deliver a new Warrant to the Holder for the number of shares of Common Stock to
which such Holder is entitled, the Company shall pay as additional damages in
cash to such Holder on the day after such third Business Day that such delivery
of such new Warrant is not timely effected an amount equal to 1.0% of the
product of (A) the number of shares of Common Stock represented by the portion
of this Warrant which is not being exercised and (B) the Closing Sale Price of
the Common Stock on the trading day immediately preceding the last possible
date which the Company could have issued such Warrant to the holder without
violating Section 1(a).

 

(d)           Cashless
Exercise.  Notwithstanding anything contained herein to the
contrary, the Holder may, in its sole discretion, exercise this Warrant in
whole or in part and, in

 

3

 

lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the following formula
(a “Cashless Exercise”):

 

Net Number = (A
x B) - (A x C)

B

 

For purposes of the foregoing formula:

 

A= the total number of shares with respect to
which this Warrant is then being exercised.

 

B= the Closing Sale Price of the Common Stock
(as reported by Bloomberg) on the date immediately preceding the date of the
Exercise Notice.

 

C= the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.

 

(e)           Disputes.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the Holder the number of
Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.

 

2.     ADJUSTMENT OF EXERCISE
PRICE AND NUMBER OF WARRANT SHARES. 
The Exercise Price and the number of Warrant Shares shall be adjusted
from time to time as follows:

 

(a)           Calculation of
Warrant Shares. If, and only in the event that, the Six Month Price is
below $2.20, then the Purchasers shall have the right to exercise this Warrant
to purchase a number of Warrant Shares equal to:

 

	
  ((Invested Dollars) - ((Preferred Shares Purchased) X (Six Month
  Price)))

  
	
  ((Six Month Price) - ($0.01))

  

 

For purposes of the foregoing formula:

 

Six Month Price = the greater of $1.75 or the lowest average closing
price of the Common Stock for any 15 consecutive day period during the six
month period immediately following the Closing Date.

 

4

 

(b)           Adjustment
upon Subdivision or Combination of Common Stock.  If the Company at any time after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be
proportionately increased.  If the
Company at any time on or after the Subscription Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

 

3.     RIGHTS UPON DISTRIBUTION
OF ASSETS.  If the Company shall
declare or make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Warrant, then, in each such case:

 

(a)           any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Sale
Price of the Common Stock on the trading day immediately preceding such record
date minus the value of the Distribution (as determined in good faith by the
Company’s Board of Directors) applicable to one share of Common Stock, and (ii)
the denominator shall be the Closing Sale Price of the Common Stock on the
trading day immediately preceding such record date; and

 

(b)           the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding paragraph (a); provided that in
the event that the Distribution is of common stock (“Other Common Stock”) of a company whose common stock is traded
on a national securities exchange or a national automated quotation system,
then the Holder may elect to receive a warrant to purchase Other Common Stock
in lieu of an increase in the number of Warrant Shares, the terms of which
shall be identical to those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Common Stock that would have
been payable to the Holder pursuant to the Distribution had the Holder
exercised this Warrant immediately prior to such record date and with an
aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this
paragraph (b).

 

5

 

4.     PURCHASE RIGHTS; ORGANIC
CHANGE.

 

(a)           Purchase
Rights.  In addition to any
adjustments pursuant to Section 2 or 3 above, if at any time the Company
grants, issues or sells any Options (other than options issued pursuant to an
Approved Stock Plan), Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

 

(b)           Organic
Change.  Any recapitalization,
reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets to another Person or other
transaction, in each case which is effected in such a way that holders of
Common Stock are entitled to receive securities or assets with respect to or in
exchange for Common Stock is referred to herein as an “Organic Change.”  Prior to the consummation of any (i) sale of all or substantially
all of the Company’s assets to an acquiring Person or (ii) other Organic Change
following which the Company is not a surviving entity, the Company will secure
from the Person purchasing such assets or the Person issuing the securities or
providing the assets in such Organic Change (in each case, the “Acquiring Entity”) a written agreement (in
form and substance reasonably satisfactory to the holders of SPA Warrants
representing at least a majority of the shares of Common Stock obtainable upon
exercise of the SPA Warrants then outstanding) to deliver to the Holder in
exchange for this Warrant, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant
and reasonably satisfactory to the Holder (including, an adjusted exercise
price equal to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
shares of Common Stock acquirable and receivable upon exercise of this
Warrant).  In the event that an
Acquiring Entity is directly or indirectly controlled by a company or entity
whose common stock or similar equity interest is listed, designated or quoted
on a securities exchange or trading market, the Holder may elect to treat such
Person as the Acquiring Entity for purposes of this Section 4(b).  Prior to the consummation of any other
Organic Change, the Company shall be required to make appropriate provision (in
form and substance reasonably satisfactory to the holders of SPA Warrants representing
at least a majority of the shares of Common Stock obtainable upon exercise of
the SPA Warrants then outstanding) to insure that the Holder thereafter will
have the right to acquire and receive in lieu of or in addition to (as the case
may be) the shares of Common Stock immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, securities
or assets that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of shares of Common Stock which would
have been acquirable and receivable upon the exercise of this Warrant as of the
date of such Organic Change.

 

5.     NONCIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any

 

6

 

reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. 
Without limiting the generality of the foregoing, the Company (i) will
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, (ii) will
take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (iii) will, so long as any
of the SPA Warrants are outstanding, take all action necessary to reserve and
keep available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the exercise of the SPA Warrants, 125% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise).

 

6.     WARRANT HOLDER NOT
DEEMED A STOCKHOLDER.  Except as
otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder, of this Warrant shall not be entitled to vote or receive
dividends or be deemed the holder of shares of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the
Holder, solely in such Person’s capacity as a holder of this Warrant, any of
the rights of a shareholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant.  In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on such Holder
to purchase any securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company. 
Notwithstanding this Section 6, the Company will provide the Holder with
copies of the same notices and other information given to the stockholders of
the Company generally, contemporaneously with the giving thereof to the
stockholders.

 

7.             REISSUANCE OF
WARRANTS.

 

(a)           Transfer
of Warrant.  The Holder may transfer
this Warrant and the rights hereunder only in accordance with applicable
securities laws.  If this Warrant is to
be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the
Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less then the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 7(d)) to the Holder representing the right to
purchase the number of Warrant Shares not being transferred.

 

(b)           Lost,
Stolen or Mutilated Warrant.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of

 

7

 

this Warrant, and, in the case of loss, theft
or destruction, of any indemnification undertaking by the Holder to the Company
in customary form, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)           Warrant
Exchangeable for Multiple Warrants. 
This Warrant is exchangeable, upon the surrender hereof by the Holder at
the principal office of the Company, for a new Warrant or Warrants (in
accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender; provided,
however, that no Warrants for fractional shares of Common Stock shall be
given.

 

(d)           Issuance of New
Warrants.  Whenever the Company is
required to issue a new Warrant pursuant to the terms of this Warrant, such new
Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as
indicated on the face of such new Warrant, the right to purchase the Warrant
Shares then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated
by the Holder which, when added to the number of shares of Common Stock
underlying the other new Warrants issued in connection with such issuance, does
not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same rights and
conditions as this Warrant.

 

8.     NOTICES.  Whenever notice is required to be given
under this Warrant, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase Agreement.  The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including
in reasonable detail a description of such action and the reason
therefore.  Without limiting the
generality of the foregoing, the Company will give written notice to the Holder
(i) promptly upon any adjustment of the Exercise Price or number of Warrant
Shares or number or kind of securities purchasable upon exercise of this
Warrant, setting forth in reasonable detail, and certifying, the facts
requiring such adjustment and the calculation of such adjustment and (ii) at
least fifteen days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any grants, issues or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property to holders of Common Stock or (C) for determining rights to vote
with respect to any Change of Control (as defined in the Certificate of
Designations), dissolution or liquidation, provided in each case that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder.

 

9.     AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions
of this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the holders of SPA
Warrants representing at least a majority

 

8

 

of the shares of Common Stock obtainable upon
exercise of the SPA Warrants then outstanding; provided that no such action may
increase the exercise price of any SPA Warrant or decrease the number of shares
or class of stock obtainable upon exercise of any SPA Warrant without the
written consent of the Holder.  No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.

 

10.           GOVERNING LAW.  This Warrant shall be construed and enforced
in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

 

11.   CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointly
drafted by the Company and all the Purchasers and shall not be construed
against any person as the drafter hereof. 
The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant.

 

12.   DISPUTE RESOLUTION.  (a)  
In the case of a dispute as to the arithmetic calculation of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall submit the disputed arithmetic calculations via facsimile within two
Business Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the Holder.  The
Holder and the Company shall determine the correct arithmetic calculation within
three Business days of such disputed arithmetic calculation being transmitted
to such holder.  If the Holder and the
Company are unable to agree upon correct arithmetic calculation of the Exercise
Price or the Warrant Shares within such time, then the Company shall, within
two Business Days, submit via facsimile the disputed calculation to an
independent, reputable nationally recognized accounting firm selected jointly
by the Company and the Holder.  The
Company shall cause the accounting firm to perform the calculation and notify
the Company and the Holder of the results no later than ten Business Days from
the time it receives the disputed determinations or calculations.  Such accounting firm’s determination shall
be binding upon all parties absent manifest error.

 

(b)           In
the case of a dispute as to the determination of fair market value of a
security to determine the Exercise Price, the Company shall submit the disputed
determination via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination being
submitted to the Holder, then the Company shall, within two Business Days,
submit via facsimile the disputed determination of the Exercise Price to an
independent, reputable investment bank or accountant selected jointly by the
Company and the Holder.  The Company
shall cause the investment bank or the accountant, as the case may be, to
perform the determinations and notify the Company and the Holder of the results
no later than ten Business Days from the time it receives the disputed
determinations or calculations.  Such
investment bank’s determination shall be binding upon all parties absent
demonstrable error.

 

9

 

(c)           The
fees and expenses associated with the determinations made by such investment
bank or accountant shall be bourne by the parties hereto in inverse proportion
to the resolution of the discrepancy that is the subject of the dispute.

 

13.   REMEDIES, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant or any other
Transaction Document (as defined in the Securities Purchase Agreement), at law
or in equity (including a decree of specific performance and/or other injunctive
relief), and nothing herein shall limit the right of the Holder right to pursue
actual damages for any failure by the Company to comply with the terms of this
Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. 
The Company therefore agrees that, in the event of any such breach or
threatened breach, the Holder shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

14.   TRANSFER.  This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, subject to
applicable securities laws.

 

15.   CERTAIN DEFINITIONS.  For purposes of this Warrant, the following
terms shall have the following meanings:

 

(a)           “Approved Stock Plan” means any employee
benefit plan which has been approved by the Board of Directors of the Company,
pursuant to which the Company’s securities may be issued to employees, officers
or independent directors for services provided to the Company.

 

(b)           “Bloomberg” means Bloomberg Financial
Markets.

 

(c)           “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

 

(d)           “Closing Bid Price” and “Closing Sale Price” mean, for any security
as of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market (as defined in the
Securities Purchase Agreement), as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price, as the case may be, then the last
bid price or last trade price, respectively, of such security prior to 4:00
p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the last
closing bid price or last trade price, respectively, of such security on the
principal securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade

 

10

 

price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Bid Price or the Closing Sale
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case
may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved pursuant to
Section 12.  All such determinations to
be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation
period.

 

(e)           “Common Stock” means (i) the Company’s
common stock, par value $.001 per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any capital stock resulting from a
reclassification of such Common Stock.

 

(f)            “Convertible Securities” means any stock or
securities (other than Options) directly or indirectly convertible into or
exercisable or exchangeable for Common Stock.

 

(g)           “Expiration Date” means the date two hundred
and ten days after the Closing Date (as defined in the Securities Purchase
Agreement) or, if such date falls on a day other than a Business Day or on
which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a
Holiday.

 

(h)           “Options” means any rights, warrants or
options to subscribe for or purchase Common Stock or Convertible Securities.

 

(i)            “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any department
or agency thereof.

 

(j)            “Registration Rights Agreement” means that
certain registration rights agreement by and among the Company and the
Purchasers.

 

(k)           “SPA Securities” means the Series A
Convertible Preferred Stock of the Company issued pursuant to the Securities
Purchase Agreement.

 

[Signature Page
Follows]

 

11

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.

 

	
   

  	
  ARTEMIS INTERNATIONAL

  SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

12

 

EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION

 

The undersigned holder
hereby exercises the right to purchase
             of
the shares of Common Stock (“Warrant Shares”)
of Artemis International Solutions Corporation, a Delaware corporation (the “Company”), evidenced by the attached
Warrant to Purchase Common Stock (the “Warrant”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.  Form of Exercise Price. 
The Holder intends that payment of the Exercise Price shall be made as:

 

a “Cash Exercise”
with respect to
                                  
Warrant Shares; and/or

 

a “Cashless Exercise”
with respect to
                              
Warrant Shares.

 

2.  Payment of Exercise Price. 
In the event that the holder has elected a Cash Exercise with respect to
some or all of the Warrant Shares to be issued pursuant hereto, the holder
shall pay the Aggregate Exercise Price in the sum of
$                                      
to the Company in accordance with the terms of the Warrant.

 

3.  Delivery of Warrant Shares. 
The Company shall deliver to the holder
                    
Warrant Shares in accordance with the terms of the Warrant.

 

Date:
                    ,       

 

 

	
   

  	
   

  
	
  Name
  of Registered Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

13

 

ACKNOWLEDGMENT

 

The Company
hereby acknowledges this Exercise Notice and hereby directs American  Stock Transfer & Trust Co. to issue
the above indicated number of shares of Common Stock in accordance with the
Transfer Agent Instructions dated June      ,
2004 from the Company and acknowledged and agreed to by American Stock Transfer
& Trust Co.

 

	
   

  	
  ARTEMIS INTERNATIONAL

  SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

14

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