Document:

Ex-10.16 Gregory W. Bryant Confidentiality Agrmnt

 

Exhibit 10.16

CONFIDENTIALITY, NON-COMPETE, AND NON-SOLICITATION AGREEMENT

     THIS CONFIDENTIALITY, NON-COMPETE, AND NON-SOLICITATION AGREEMENT (the
“Agreement”) is made and entered into this 1st day of January, 2003, by and
between Bay Cities Bank (the “Employer”) and Gregory W. Bryant (the
“Employee”).

WITNESSETH

     WHEREAS, Employer is engaged in the banking industry and has established a
fine reputation and substantial goodwill in that business and serves clients
throughout the Tampa Bay and surrounding areas;

     WHEREAS, both Employer and Employee acknowledge that Employer has a
substantial and legitimate business interest in, among other things, its
confidential business information, trade secrets, customer and vendor lists,
methods of business operation, customer goodwill associated with its trade
name, trademark, service mark, and trade dress, and its substantial
relationships with specific prospective and existing customers;

     WHEREAS, Employer desires to retain Employee as an employee, and Employee
desires to continue in such employment, if already employed;

     WHEREAS, Employee acknowledges that the business of Employer is a very
competitive business;

     WHEREAS, Employee acknowledges that he is employed in a key position of
employment with Employer, one in which Employer reposes a great deal of
responsibility, trust, and reliance; and

     WHEREAS, Employer and Employee desire to continue their business
relationship subject to the establishment of this Confidentiality, Non-Compete,
and Non-solicitation Agreement;

     NOW, THEREFORE, in consideration of the covenants, promises,
representations, and understandings set forth below, the parties agree as
follows:

     1.     Recitals. The foregoing recitals are true and correct and made a part
of this Agreement.

     2.     Employment. In consideration for entering into this Agreement,
Employer agrees to continue to employ Employee pursuant to the terms of a
separate written Employment Agreement. Nothing contained herein shall in any
way alter the nature of Employee’s employment in the written Employment
Agreement effective January 1, 2003 or provide any assurance by Employer of
continuing employment beyond that which is provided in the January 1, 2003
Employment Agreement.

     Employee represents and warrants that Employee is not subject to any
restrictive agreement, other contractual or legal obligation, limitation, or
prohibition that would prohibit Employee from entering into this Agreement. In
the event of a breach of this warranty,

 

 

Employee agrees to indemnify and hold Employer harmless from any and all
claims, costs, expenses, attorney’s fees, lawsuits, or other liability arising
from such breach.

     3.     Confidentiality Agreement. Employee recognizes and acknowledges that
during the course of his employment Employee has and will continue to learn
various Employer proprietary or confidential business information (including
the identity and sources of markets, marketing information and strategies; data
processing and management information system programs and practices; vendors
and sources of vendors; customers and sources of customers and customer needs;
sales history; and financial strength, among others), and has and will continue
to have access to other confidential information related to the Employer’s
business, all of which Employee agrees to keep confidential at all times. Such
confidential information includes, but is not limited to, any and all documents
received or generated by Employer, customer lists and sources of customers and
customer needs, sales history and financial strengths, vendors and sources of
vendors, trade secrets, pricing information, financial information, corporate
information, personnel information, methods of operation, the identity and
source of markets, marketing information and strategies, data processing and
management information system programs and practices, and other proprietary
information. Employee acknowledges that Employer has a legitimate business
interest in its relationships with prospective or existing vendors, customers
and clients, as well as vendor, customer and client goodwill associated with
Employer’s trade name, trademark, service mark, trade dress, geographic
location, and sales, marketing and trade area. With respect to this
confidential information, Employee agrees as follows:

		
	 	     a. Employee will use all such information only in connection with
the performance of duties on behalf of Employer and agrees not to copy,
disclose or otherwise use such information or to later contest its
confidential or proprietary nature.
	 
	 	     b. Employee will not, during or after the term of his employment:
(1) publish, disclose, or make accessible any confidential information,
or any part thereof, to any person, firm, corporation, or association or
other entity for any reason whatsoever; or (2) use or generate benefit
from such information, except during employment with Employer and for the
benefit of Employer, without prior written permission of Employer.
	 
	 	     c. Employee shall return all tangible evidence of such confidential
information, including, but not limited to, any files, papers, memoranda,
records, documents, lists, books, files, and computer stored or generated
information, including any information stored on any computer hard drive,
diskettes, tapes, or other format, and copies of the foregoing, to
Employer prior to or at the termination of employment with Employer.
	 
	 	     d. Employee acknowledges and agrees that disclosure of any
confidential information of Employer by Employee would cause irreparable
harm to Employer and that Employer will be irreparably damaged if the
provisions of this paragraph are not specifically enforced, that monetary
damages will not provide an adequate remedy to Employer, and that
Employer is entitled to an injunction (preliminary, temporary and final),
restraining any violation of this paragraph (without bond or other
security being required), or any other appropriate decree of specific
performance. In the event there is a breach or a threatened breach by
Employee of the provisions of this Paragraph Three (3), Employer shall be
entitled to an injunction restraining Employee from disclosing in whole
or in part such information, generating a benefit from such information,
or rendering a service to any person, firm, corporation, association, or
other entity, to whom

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	 	such information has been disclosed. It is agreed that such
remedies are not exclusive and shall be in addition to any other remedy
which Employer may have.
	 
	 	     e. Employee acknowledges and agrees that the restrictive covenants
contained in this Agreement are reasonably necessary to protect the
legitimate business interests of Employer and that the restrictions
stated are not overbroad or overlong and are otherwise reasonably
necessary to protect the established legitimate business interests of
Employer.

     4.     Non-Compete During Employment. Employee agrees that during the term of
his employment with Employer, he will not directly or indirectly become engaged
in any business dealing with Commercial Banking business or the sales and
marketing of Commercial Banking products, or solicit any such business except
for, on behalf of, or at the direction of the Employer without the prior
written approval of the Employer’s Board and/or its Chairman.

     5.     Non-Compete After Employment. Employee agrees that for a period of the
later of twelve (12) months after the termination of Employee’s employment with
Employer, or the completion of any payments under the separate written
Employment Agreement, Employee shall not in any way compete against Employer or
any subsidiary or affiliated or related entity of Employer, or accept
employment or establish any business relationship (including a consulting
relationship), direct or indirect, with any business entity in competition with
Employer or any subsidiary or affiliated or related entity of Employer or which
plans to be in competition with Employer or any subsidiary or affiliated or
related entity of Employer. Employee specifically agrees, without limitation,
that he shall not call upon, solicit, divert, take away or interfere with the
business or patronage of any person, partnership, corporation or other business
entity which is or was a customer of Employer on or after January 1, 2003,
regardless of whether Employee has had any previous customer contact or
personal relationship with such other business entity at any time, including
during or before Employee’s term of employment with Employer. For purposes of
this paragraph, “in competition with Employer” includes, but is not limited to,
financial institutions. The term “business entity in competition with
Employer” specifically includes, but is not limited to, those business entities
known as federally insured financial institutions, any successor, assign,
parent, subsidiary, or affiliated company of any of these entities and any
entity whose interest is to organize another financial institution. Employer
and Employee agree that Employer competes throughout the greater Tampa Bay
area, i.e. within 75 mile radius of 2202 North Westshore Blvd. (the
“Geographical Area”), and that the prohibition on competition applies to the
Geographical Area.

     6.     Non-Solicitation Agreement. Employee agrees that, during his
employment with Employer, and for a period of one (1) year after the
termination, for whatever reason, of his employment with Employer, Employee
shall not:

		
	 	     a. directly or indirectly engage, hire, employ, or solicit any
employee of Employer, or of any successor, assign, parent, subsidiary,
affiliated or related organization of Employer (a “Related
Organization”), or otherwise induce or attempt to induce any employee of
Employer or any Related Organization to leave employment of Employer or
any Related Organization or alter the employment relationship of any
employee with Employer or any Related Organization, or interfere with or
disrupt the relationship of Employer or any Related Organization with any
of its employees, or solicit or employ any person employed by Employer or
any Related Organization;

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	 	     b. directly or indirectly attempt to solicit any customer or client
of Employer, or of any Related Organization, or directly or indirectly
interfere with the relationship of Employer or of any Related
Organization, with any customers or clients or prospective or potential
customers or clients with whom Employee had a substantial relationship;
or
	 
	 	     c. accept the business of or provide services for any customer or
prospective or potential customer or client of Employer or any Related
Organization with whom Employee had a substantial relationship.

     7.     Tolling. The time restrictions applicable to Paragraphs Three (3),
Four (4), Five (5) and Six (6) shall be tolled during the period of any breach
of this Agreement.

     8.     Remedies for Breach of Confidentiality, Non-Compete and/or
Non-Solicitation Agreements. Employer and Employee acknowledge that the
remedies at law for any breach of Paragraphs Three (3), Four (4), Five (5) or
Six (6) are inadequate, and that Employer shall be entitled to injunctive
relief without notice to Employee, and that such injunctive relief shall not be
exclusive, but shall be in addition to any rights or remedies Employer or any
successor, assign, parent, subsidiary, affiliated or related organization of
Employer may have for such breach.

     9.     Invalid Provision. In the event any provision of this Agreement should
be or become invalid or unenforceable, that shall not affect the validity and
enforceability of any other provision of this Agreement. Similarly, if the
scope of any restriction or covenant contained herein should be or become too
broad or extensive to permit enforcement thereof to its full extent, then the
court is specifically authorized by the parties to enforce any such restriction
or covenant to the maximum extent permitted by law, and Employee hereby
consents and agrees that the scope of any such restriction or covenant may be
modified accordingly in any judicial proceeding brought to enforce such
restriction or covenant.

     10.     Interpretation of Agreement. This Agreement has been brought about by
virtue of the negotiations of both Employer and Employee. Thus, should it ever
become necessary to construe or interpret the terms and conditions of this
Agreement, it shall be done without giving any consideration as to which of the
parties may have drafted this Agreement.

     11.     Applicable Law and Venue. This Agreement shall be interpreted under
and governed by the laws of the State of Florida. The exclusive venue of any
action brought under this Agreement shall be Hillsborough County Circuit Court
or the U.S. District Court for the Middle District of Florida, Tampa Division.

     12.     Amendments or Modifications. No amendments or modifications to this
Agreement shall be binding on any of the parties, unless such amendment or
modification is in writing and executed by all of the parties to this
Agreement. No term, provision or clause of this Agreement shall be deemed
waived and no breach excused, unless such waiver or consent shall be in writing
and executed by Employee and by the Chairman of the Board of Directors, on
behalf of Employer.

     13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Employer’s successors, assigns, parents, subsidiaries,
affiliated or related organizations and be enforceable by Employer’s
successors, assigns, parents, subsidiaries, affiliated or related
organizations. Each and every reference to “Employer” in this Agreement shall
be construed as including Employer’s successors, assigns, parents,
subsidiaries, affiliated or related organizations.

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     14.     Surviving Provisions. All of the provisions of this Agreement,
including, but not limited to, the restrictions and remedies, survive the
termination of Employee’s employment, irrespective of the grounds or reasons
for such termination, including termination by Employer with or without notice
or cause.

     15.     Reasonableness. Employee acknowledges that the restrictions hereby
imposed are fair and reasonable and are reasonably required for the protection
of the legitimate business interests of Employer. Employee has voluntarily and
knowingly entered into this Agreement and agrees that the non-compete
restriction of this Agreement will not prevent Employee from finding suitable
employment should Employee’s employment terminate for whatever reason.

     16.     Disclosure of Agreement. Employee shall, and Employer may, disclose
this Agreement and its terms to any future or prospective employer of Employee
and to any client, customer, or prospective client or customer of Employer,
Employee, or future employer of Employee.

     17.     Notice. If, at any time, Employee believes that for any reason
Employee is no longer bound by this Agreement, Employee must notify Employer in
writing within 30 days of the circumstance or event which forms the basis for
such belief. Such notice shall state with particularity the circumstance or
event that forms the basis for Employee’s belief. Failure to strictly comply
with this notice requirement on a timely basis shall serve as a waiver of
Employee’s contention that Employee is no longer bound by this Agreement.
After receipt of such notice, Employer shall have 30 days to remedy the
circumstance or event. If Employer remedies the circumstance or event, this
shall serve as a waiver of Employee’s contention that Employee is no longer
bound by this Agreement. Any effort by Employer to remedy the circumstance or
event shall in no way be construed as any sort of admission that the
circumstance or event relieves Employee of Employee’s obligations under this
Agreement. Any notice to Employer shall be delivered by U.S. Mail, postage
prepaid, return receipt requested, to the following address:

	 	 	 
	A. Bronson Thayer	 	
 
	Chairman of the Board of Directors	 	 
	Bay Cities Bank	 	 
	P.O. Box 21027	 	 
	Tampa, FL 33622-1027	 	 

     18.     Complete Agreement. This Agreement represents the complete agreement
between Employee and Employer regarding the subject matter of this Agreement.
Employee acknowledges and agrees that no representation, promise, or agreement
regarding the subject matter of this Agreement has been made to or with
Employee that is not set forth in this Agreement. Any representations or
agreements regarding the subject matter of this Agreement not explicitly
included in this Agreement are considered waived and unenforceable. Any
previous agreements between Employer and Employee regarding the subject matter
of this Agreement are hereby superceded by execution of this Agreement, and
shall be devoid of any continuing force or effect. This Agreement is in no way
dependent upon the performance of any other contract or agreement that may have
been or may be entered into between Employee and Employer, including but not
limited to the separate written Employment Agreement, and the breach or alleged
breach of any other contract or agreement, including the separate written
Employment Agreement, is no defense to enforcement of this Agreement. Employer
and Employee acknowledge the existence of a separate written Employment
Agreement into which

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they have entered, which is a separate agreement that contains and
addresses its own subject matter.

     19.     Acknowledgment. Employee acknowledges that Employee has read this
Agreement in full and completely understands all of its terms and obligations
and enters into this Agreement freely and voluntarily.

     IN WITNESS THEREOF, the parties hereto have executed this Agreement as of
the date set forth above.

	 	 	 	 	 	 	 
	
Signed, sealed and delivered

In the presence of:
	 	BAY CITIES BANK
	 	 	 	 	By	 	 
	

	 	 	 	

	Name:	 	 	 	Name:	 	 
	 	 	

	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	Date:	 	 	 	Date:	 	 
	 	 	

	 	 	 	

	 
	

	 	

	Name:	 	 	 	Name:	 	 
	 	 	

	 	 	 	

	 	 	 	 	 	 	Gregory W. Bryant
	Date:	 	 	 	Date:	 	 
	 	 	

	 	 	 	

6Exhibit 4.1

                                    EXHIBIT B

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                          BESTNET COMMUNICATIONS CORP.

                        WARRANT TO PURCHASE COMMON STOCK

WARRANT NO.:______                          NUMBER OF SHARES: __________________

DATE OF ISSUANCE: __________  _____, 2003

     BestNet Communications Corp., a Nevada 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 his permitted assigns (a "HOLDER"), is entitled,  subject to the terms
set forth below, to purchase from the Company upon surrender of this Warrant, at
any time or times on or after the date hereof,  but not after 11:59 p.m. Eastern
Time on the  Expiration  Date (as defined  herein)  ____________  fully paid and
nonassessable  shares of Common  Stock (as defined  herein) of the Company  (the
"WARRANT  SHARES"),  at the  purchase  price per share  provided in Section 2(a)
below.

     1.   DEFINITIONS.

     (a)  WARRANT  ISSUANCE.  This  Warrant  ("WARRANT")  is being issued to the
holder by the Company pursuant to the Unit Purchase Agreement dated of even date
herewith, between the Company and holder.

     (b)  DEFINITIONS.  The  following  words and terms as used in this  Warrant
shall have the following meanings:

          (i) "Business Day" means any day other than Saturday,  Sunday or other
     day on which  commercial  banks in the City of Grand  Rapids,  Michigan are
     authorized or required by law to remain closed.
<PAGE>
          (ii) "Common  Stock" means (A) the Company's  common stock,  par value
     $.001 per share,  and (B) any capital  stock into which such  Common  Stock
     shall  have  been   changed  or  any  capital   stock   resulting   from  a
     reclassification of such Common Stock.

          (iii)  "Expiration  Date" means the date three (3) years from the date
     of this  Warrant or, if such date falls on a Saturday,  Sunday or other day
     on which banks are required or  authorized  to be closed in the City of New
     York,  New York or the State of New York or on which  trading does not take
     place on the principal exchange or automated  quotation system on which the
     Common Stock is traded (a "Holiday"), the next date that is not a Holiday.

          (iv) "Issuance Date" means the date of issuance of this Warrant.

          (v) "Person"  means an  individual,  a limited  liability  company,  a
     partnership,  a joint venture,  a corporation,  a trust, an  unincorporated
     organization and a government or any department or agency thereof.

          (vi)  "Principal  Market" means the  Over-The-Counter  Bulletin  Board
     operated by the NASD.

          (vii) "Securities Act" means the Securities Act of 1933, as amended.

          (viii)  "Warrant"  means  this  Warrant  and all  warrants  issued  in
     exchange, transfer or replacement thereof.

          (ix) "Warrant Exercise Price" shall mean $0.30 per share.

          (x)  OTHER  DEFINITIONAL  PROVISIONS.  Except as  otherwise  specified
     herein, all references herein (A) to the Company shall be deemed to include
     the Company's  successors and (B) to any applicable law defined or referred
     to herein,  shall be deemed  references to such  applicable law as the same
     may have been or may be amended  or  supplemented  from time to time.  When
     used in this Warrant,  the words "herein,"  "hereof," and  "hereunder," and
     words of similar import,  shall refer to this Warrant as a whole and not to
     any provision of this Warrant,  and the words  "Section,"  "Schedule,"  and
     "Exhibit"  shall refer to Sections of, and  Schedules and Exhibits to, this
     Warrant unless otherwise specified.  Whenever the context so requires,  the
     neuter gender  includes the masculine or feminine,  and the singular number
     includes the plural, and vice versa.

     2.   EXERCISE OF WARRANT.

     (a)  Subject  to the terms  and  conditions  hereof,  this  Warrant  may be
exercised by the holder hereof then  registered on the books of the Company,  in
whole or in part,  at any time on any  Business  Day on or after the  opening of
business  on the date  following  the date the  Company's  shareholders  adopt a
proposal  authorizing an increase in the Company's  authorized capital stock (as
set forth in the Unit Purchase  Agreement) and prior to 11:59 P.M.  Eastern Time
on the Expiration Date by (i) delivery of a written  notice,  in the form of the
subscription  notice  attached as EXHIBIT A hereto (the "EXERCISE  NOTICE"),  of

<PAGE>
such holder's election to exercise this Warrant,  which notice shall specify the
number of Warrant  Shares to be  purchased;  (ii)  payment to the  Company of an
amount equal to the Warrant  Exercise Price  multiplied by the number of Warrant
Shares as to which this Warrant is being  exercised  in cash,  certified or bank
funds or wire transfer of immediately available funds and (iii) the surrender of
this Warrant (or a Lost  Warrant  Affidavit  in  substantially  the form annexed
hereto as EXHIBIT C with respect to this Warrant in the case of its loss,  theft
or  destruction)  to a common  carrier for  overnight  delivery to the  Company;
provided,  that if such  Warrant  Shares are to be issued in any name other than
that of the registered  holder of this Warrant,  such issuance shall be deemed a
transfer and the  provisions of Section 8 shall be  applicable.  In the event of
any exercise of the rights  represented by this Warrant in compliance  with this
Section 2(a), the Company shall on the second Business Day following the date of
receipt of the Exercise Notice, and this Warrant (or a Lost Warrant Affidavit in
substantially  the form annexed hereto as EXHIBIT C with respect to this Warrant
in the  case  of  its  loss,  theft  or  destruction)  (the  "EXERCISE  DELIVERY
DOCUMENTS"), credit such aggregate number of shares of Common Stock to which the
holder (or its designee)  shall be entitled to the holder's (or its  designee's)
balance account with The Depository  Trust Company;  provided,  however,  if the
holder who submitted the Exercise Notice requested  physical  delivery of any or
all of the  Warrant  Shares,  then the  Company  shall,  on or before  the fifth
Business Day  following  receipt of the Exercise  Delivery  Documents  issue and
surrender to a common carrier for overnight delivery to the address 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 (or its
designee)  shall be entitled.  Upon delivery of the Exercise  Notice referred to
above,  the holder of this  Warrant  (or its  designee)  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  this  Warrant  as  required  by  clause  (iii)  above  or  the
certificates  evidencing such Warrant Shares. In the case of a dispute as to the
determination of the Warrant Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the holder (or its designee)
the number of shares of Common  Stock that is not  disputed and shall submit the
disputed  determinations or arithmetic  calculations to the holder via facsimile
within five Business  Days of receipt of the holder's  Exercise  Notice.  If the
holder and the Company are unable to agree upon the determination of the Warrant
Exercise Price or the  arithmetic  calculation of the Warrant Shares within five
days of such disputed determination or arithmetic calculation being submitted to
the holder,  then the Company  shall  immediately  submit via  facsimile (i) the
disputed  determination  of  the  Warrant  Exercise  Price  to  an  independent,
reputable investment banking firm of nationally  recognized  standing,  mutually
acceptable  to both the Company and the holder or (ii) the  disputed  arithmetic
calculation  of  the  Warrant  Shares  to an  independent,  outside  accountant,
mutually  acceptable to both the Company and the holder. The Company shall cause
the investment  banking firm or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the holder of the
results no later than  forty-eight  (48)  hours  from the time it  receives  the
disputed  determinations  or  calculations.  Such  investment  banking firm's or
accountant's  determination or calculation,  as the case may be, shall be deemed
conclusive absent manifest error.

     (b)  Unless the rights  represented  by this Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than five (5)  Business  Days after  delivery of the  Exercise
Delivery Documents and at its own expense,  issue a new Warrant identical in all
<PAGE>
respects to this Warrant  exercised except it shall represent rights to purchase
the number of Warrant  Shares  purchasable  immediately  prior to such  exercise
under this Warrant exercised,  less the number of Warrant Shares with respect to
which such Warrant is exercised.

     (c)  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 issued
upon  exercise of this Warrant  shall be rounded up to the nearest whole number.
This Warrant shall not be exercisable by cashless exercise.

     3.   (a)   ADJUSTMENT   FOR   DIVIDENDS   IN  OTHER  STOCK  AND   PROPERTY;
RECLASSIFICATIONS.  In case at any time or from time to time the  holders of the
Common Stock (or any shares of stock or other  securities at the time receivable
upon the  exercise of this  Warrant)  shall have  received,  or, on or after the
record date fixed for the  determination  of eligible  shareholders,  shall have
become entitled to receive, without payment therefor,

               (1) other or  additional  stock or other  securities  or property
          (other than cash) by way of dividend,

               (2) any cash or other  property paid or payable out of any source
          other than retained earnings  (determined in accordance with generally
          accepted accounting principles), or

               (3) other or  additional  stock or other  securities  or property
          (including  cash) by way of stock-split,  spin-off,  reclassification,
          combination of shares or similar corporate rearrangement,

(other  than (x) shares of Common  Stock or any other stock or  securities  into
which such  Common  Stock shall have been  exchanged,  or (y) any other stock or
securities  convertible into or exchangeable for such Common Stock or such other
stock or  securities),  then and in each such case a holder,  upon the  exercise
hereof as  provided  in Section 2, shall be  entitled  to receive  the amount of
stock and other securities and property (including cash in the cases referred to
in clauses (2) and (3) above)  which such holder  would hold on the date of such
exercise  if on the  Issuance  Date such holder had been the holder of record of
the number of shares of Common Stock called for on the face of this Warrant, and
had  thereafter,  during the period from the Issuance  Date to and including the
date of such exercise, retained such shares and/or all other or additional stock
and other  securities and property  (including  cash in the cases referred to in
clause (2) and (3) above)  receivable  by it as  aforesaid  during such  period,
giving effect to all adjustments  called for during such period by Sections 3(a)
and 3(b).

     (b)  ADJUSTMENT FOR  REORGANIZATION,  CONSOLIDATION  AND MERGER. In case of
any  reorganization  of the Company (or any other corporation the stock or other
securities of which are at the time  receivable on the exercise of this Warrant)
or  reclassification  of its securities  after the Issuance Date, or the Company
(or any such other  corporation)  shall  consolidate  with or merge into another
corporation or entity or convey or exchange all or substantially  all its assets
to another  corporation or entity, then and in each such case the holder of this
Warrant, upon the exercise hereof as provided in Section 2 at any time after the
consummation of such reorganization,  reclassification,  consolidation,  merger,
<PAGE>
conveyance  or exchange,  shall be entitled to receive,  in lieu of the stock or
other securities and property receivable upon the exercise of this Warrant prior
to such  consummation,  the stock or other  securities or property to which such
holder  would  have been  entitled  upon such  consummation  if such  holder had
exercised  this  Warrant  immediately  prior  thereto,  all  subject  to further
adjustment  as provided in Sections  3(a),  (b), (c) and (d); in each such case,
the terms of this Warrant  shall be  applicable  to the shares of stock or other
securities or property  receivable  upon the exercise of this Warrant after such
consummation.

     (c)  ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS.  If the Company at
any  time  or  from  time  to  time  makes,  or  fixes  a  record  date  for the
determination  of  holders  of  Common  Stock  (or any  shares of stock or other
securities at the time receivable upon the exercise of this Warrant) entitled to
receive,  a dividend or other  distribution  payable in additional shares of (x)
Common Stock or any other stock or securities into which such Common Stock shall
have been exchanged,  or (y) any other stock or securities  convertible  into or
exchangeable  for such Common Stock or such other stock or securities,  then and
in each such event

          (1)  the Warrant  Exercise  Price then in effect shall be decreased as
of the time of the  issuance  of such  additional  shares  or, in the event such
record  date is fixed,  as of the close of  business  on such  record  date,  by
multiplying  the  Warrant  Exercise  Price then in effect by a fraction  (A) the
numerator  of which is the total  number of shares of Common  Stock  issued  and
outstanding  immediately  prior to the  time of such  issuance  or the  close of
business  on such record  date,  and (B) the  denominator  of which shall be the
total number of shares of Common Stock issued and outstanding  immediately prior
to the time of such issuance or the close of business on such record date as the
case may be,  plus the number of shares of Common  Stock  issuable in payment of
such dividend or distribution;  PROVIDED,  HOWEVER,  that if such record date is
fixed and such dividend is not fully paid or if such  distribution  is not fully
made on the date fixed therefor,  the Warrant Exercise Price shall be recomputed
accordingly  as of the close of business on such record date, and thereafter the
Warrant Exercise Price shall be adjusted pursuant to this Section 3(c) as of the
time of actual payment of such dividends or distributions; and

          (2)  the number of shares of Common Stock theretofore  receivable upon
the exercise of this Warrant shall be increased, as of the time of such issuance
or, in the event such record date is fixed,  as of the close of business on such
record  date,  in inverse  proportion  to the  decrease in the Warrant  Exercise
Price.

     (d)  STOCK SPLIT AND  REVERSE  STOCK  SPLIT.  If the Company at any time or
from time to time effects a stock split or subdivision of the outstanding Common
Stock, the Warrant Exercise Price then in effect  immediately  before that stock
split or subdivision shall be proportionately decreased and the number of shares
of Common Stock  theretofore  receivable upon the exercise of this Warrant shall
be  proportionately  increased.  If the Company at any time or from time to time
effects a reverse stock split or combines the outstanding shares of Common Stock
into a smaller  number of  shares,  the  Warrant  Exercise  Price then in effect
immediately   before  that  reverse   stock  split  or   combination   shall  be
proportionately  increased and the number of shares of Common Stock  theretofore
receivable upon the exercise of this Warrant shall be proportionately decreased.
Each adjustment  under this Section 3(d) shall become  effective at the close of
business  on the date the  stock  split,  subdivision,  reverse  stock  split or
combination becomes effective.
<PAGE>
     4.   COVENANTS AS TO COMMON STOCK.  The Company hereby covenants and agrees
as follows:

          (a)  This Warrant is, and any Warrants issued in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

          (b)  All Warrant  Shares  which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable  and free from all taxes,  liens and charges with respect
to the issuance thereof.

          (c)  During the period  within  which the rights  represented  by this
Warrant may be exercised,  but subject to the receipt of the affirmative vote of
a majority of the Company's shareholders approving an amendment to the Company's
certificate of  incorporation  to increase the  authorized  capital stock of the
Company,  at the next  annual  meeting of  shareholders  or  special  meeting of
shareholders,  as the case may be, to be held as soon as  practicable  following
the date of  issuance  of this  Warrant,  the  Company  will at all  times  have
authorized  and  reserved at least 100% of the number of shares of Common  Stock
needed to provide  for the  exercise  of the  rights  then  represented  by this
Warrant and the par value of said shares will at all times be less than or equal
to the applicable Warrant Exercise Price.

          (d)  The  Company  shall  secure  the  listing of the shares of Common
Stock  issuable  upon  exercise of this  Warrant upon each  national  securities
exchange or  automated  quotation  system,  if any,  upon which shares of Common
Stock are then listed  within the time  required by such  exchange or  quotation
system's rules and regulations  and shall maintain,  so long as any other shares
of Common  Stock shall be so listed,  such listing of all shares of Common Stock
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall so list on each national securities exchange or automated quotation system
within the time  required  by such  exchange  or  quotation  system's  rules and
regulations,  as the case may be, and shall  maintain such listing of, any other
shares of  capital  stock of the  Company  issuable  upon the  exercise  of this
Warrant if and so long as any  shares of the same class  shall be listed on such
national securities exchange or automated quotation system.

          (e)  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 to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this Warrant.  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 Warrant  Exercise  Price then in effect,
and (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.
<PAGE>
          (f)  This Warrant will be binding  upon any entity  succeeding  to the
Company by merger,  consolidation or acquisition of all or substantially  all of
the  Company's  assets  and  any  such  successive  mergers,  consolidations  or
acquisitions.

     5.   TAXES.  The  Company  shall pay any and all taxes which may be payable
with respect to the issuance  and  delivery of Warrant  Shares upon  exercise of
this Warrant;  provided,  however, that the Company shall not be required to pay
any tax that may be payable in respect of any transfer  involved in the issue or
delivery of Common  Stock or other  securities  or property in a name other than
that of the  registered  holders of this Warrant to be converted and such holder
shall pay such amount, if any, to cover any applicable transfer or similar tax.

     6.   WARRANT  HOLDER  NOT  DEEMED  A   STOCKHOLDER.   Except  as  otherwise
specifically  provided  herein,  no holder of this Warrant,  solely by virtue of
such  holding,  shall 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 hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent  to any  corporate  action  (whether a  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 this  Warrant of the Warrant
Shares which he or she 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 of
this Warrant 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.   REPRESENTATIONS OF HOLDER.

          (a)  The holder of this Warrant, by the acceptance hereof,  represents
that it is acquiring this Warrant and the Warrant Shares for its own account for
investment only and not with a view towards,  or for resale in connection  with,
the public sale or distribution  of this Warrant or the Warrant  Shares,  except
pursuant to sales  registered or exempted  under the Securities  Act;  provided,
however, that by making the representations herein, the holder does not agree to
hold this Warrant or any of the Warrant Shares for any minimum or other specific
term and reserves the right to dispose of this Warrant and the Warrant Shares at
any time in  accordance  with or  pursuant  to a  registration  statement  or an
exemption  under  the  Securities  Act.  The  holder  of  this  Warrant  further
represents,  by  acceptance  hereof,  that,  as of this date,  such holder is an
"accredited  investor" as such term is defined in Rule 501(a)(1) of Regulation D
promulgated by the Securities and Exchange  Commission  under the Securities Act
(an "Accredited Investor").

          (b)  The  holder  of this  Warrant  further  acknowledges  that if the
company's  shareholders  fail to adopt the  proposal to increase  the  Company's
authorized capital stock, as described in Section 2(a) hereof, this Warrant will
not be  exercisable by the holder and the Company shall have no liability to the
holder as a result thereof.
<PAGE>
     8.   OWNERSHIP AND TRANSFER.

          (a)  The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may  designate by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder  thereof for all purposes,  but in all events  recognizing  any transfers
made in accordance with the terms of this Warrant.

          (b)  This  Warrant  and the  rights  granted  hereunder  shall  not be
assignable by the holder hereof without the consent of the Company.

     9.   LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen,  mutilated or destroyed,  the Company  shall,  on receipt of an executed
Lost Warrant  Affidavit in  substantially  the form annexed  hereto as EXHIBIT C
(or, in the case of a mutilated  Warrant,  the Warrant),  issue a new Warrant of
like  denomination  and tenor as this  Warrant  so lost,  stolen,  mutilated  or
destroyed.

     10.  NOTICE.  Any  notices,   consents,  waivers  or  other  communications
required or  permitted  to be given under the terms of this  Warrant  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

          If to the Company:

          BestNet Communications Corp.
          5075 Cascade Road, SE
          Suite A
          Grand Rapids, Michigan 49546
          Telephone: (616) 977-9933
          Facsimile: (616) 977-9955
          Attention: Robert Blanchard, President and Chief Executive Officer
<PAGE>
          With copy to:

          Squire, Sanders & Dempsey L.L.P.
          Two Renaissance Square
          Suite 2700
          40 North Central Avenue
          Phoenix, Arizona 85004
          Telephone: (602) 528-4000
          Facsimile: (602) 253-8129
          Attention: Gregory R. Hall, Esq.

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth in writing by the holder and delivered from time to time, or at such other
address and  facsimile as shall be delivered to the Company by the holder at any
time.  Each party shall  provide  five days' prior  written  notice to the other
party of any change in address or  facsimile  number.  Written  confirmation  of
receipt (A) given by the  recipient  of such  notice,  consent,  waiver or other
communication,  (B)  mechanically  or  electronically  generated by the sender's
facsimile machine containing the time, date,  recipient  facsimile number and an
image of the first page of such  transmission  or (C)  provided by a  nationally
recognized  overnight delivery service shall be rebuttable  evidence of personal
service,  receipt by facsimile or receipt from a nationally recognized overnight
delivery   service  in  accordance   with  clause  (i),  (ii)  or  (iii)  above,
respectively.

     11.  DATE. The date of this Warrant is __________  ___, 2003. This Warrant,
in all events, shall be wholly void and of no effect after the close of business
on the Expiration Date, except that notwithstanding any other provisions hereof,
the  provisions of Section 7 shall  continue in full force and effect after such
date as to any Warrant  Shares or other  securities  issued upon the exercise of
this Warrant.

     12.  AMENDMENT  AND  WAIVER.  Except  as  otherwise  provided  herein,  the
provisions  of the  Warrants  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 holder of this
Warrant  provided that no such action may increase the Warrant Exercise Price of
the Warrants,  decrease the number of shares or class of stock  obtainable  upon
exercise of any Warrants, or otherwise materially adversely effect the rights of
the holder of this Warrant without the written consent of such holder.

     13.  DESCRIPTIVE  HEADINGS;  GOVERNING LAW;  JURISDICTION.  The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Nevada  shall  govern all issues  concerning  the  relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of Nevada,  without  giving effect to
any choice of law or conflict of law  provision or rule (whether of the State of
Nevada, or any other jurisdictions) that would cause the application of the laws
of any jurisdictions  other than the State of Nevada. Each of the parties hereto
irrevocably consents and submits to the nonexclusive jurisdiction of the Supreme
<PAGE>
Court of the State of  Arizona  and the  United  States  District  Court for the
District of Arizona in connection with any proceeding arising out of or relating
to this Warrant, waives any objection to venue in the County of Maricopa,  State
of Arizona, or such District, and agrees that service of any summons, complaint,
notice of other  process  relating  to such  proceeding  may be  effected in the
manner provided by Section 10 hereof.

                                        BESTNET COMMUNICATIONS CORP.

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Title:
                                              ----------------------------------

                                        HOLDER

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Title:
                                              ----------------------------------
<PAGE>
                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                          BESTNET COMMUNICATIONS CORP.

     The   undersigned   holder   hereby   exercises   the  right  to   purchase
_________________  of the shares of Common Stock  ("Warrant  Shares") of BestNet
Communications  Corp., a Nevada  corporation (the  "Company"),  evidenced by the
attached  Warrant  (the  "Warrant").  Capitalized  terms  used  herein  and  not
otherwise defined shall have the respective meanings set forth in the Warrant.

     1.   Payment of Warrant  Exercise  Price.  The holder  shall pay the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

     2.   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:
<PAGE>
                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

FOR  VALUE  RECEIVED,  the  undersigned  does  hereby  assign  and  transfer  to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares of the capital  stock of BestNet  Communications  Corp.,  a
Nevada corporation,  represented by warrant  certificate no. _____,  standing in
the name of the  undersigned on the books of said  corporation.  The undersigned
does  hereby  irrevocably  constitute  and appoint  ______________,  attorney to
transfer the warrants of said  corporation,  with full power of  substitution in
the premises.

Dated: _________________, ____

                                        ________________________________________

                                        By: ____________________________________

                                        Its: ___________________________________
<PAGE>
                              EXHIBIT C TO WARRANT

                            FORM OF AFFIDAVIT OF LOSS

STATE OF       )
               ) ss:
COUNTY OF      )

     The undersigned  (hereinafter  "Deponent"),  being duly sworn,  deposes and
says that:

     1.   Deponent is an adult whose mailing address is:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

     2.   Deponent is the  recipient of a Warrant (the  "Warrant")  from BestNet
Communications Corp. (the "Company"), dated  ___________________________________
for the purchase of ___________________________________  shares of Common Stock,
par  value  $.001  per  share,   of  the  Company,   at  an  exercise  price  of
$_________________________ per share.

     3.   The Warrant has been lost, stolen,  destroyed or misplaced,  under the
following circumstances:

     4.   The Warrant was not endorsed.

     5.   Deponent  has made a  diligent  search for the  Warrant,  and has been
unable to find or recover same, and Deponent was the unconditional  owner of the
Warrant  at the  time  of  loss,  and is  entitled  to the  full  and  exclusive
possession thereof;  that neither the Warrant nor the rights of Deponent therein
have, in whole or in part, been assigned, transferred,  hypothecated, pledged or
otherwise  disposed of, in any manner  whatsoever,  and that no person,  firm or
corporation  other than the  Deponent  has any right,  title,  claim,  equity or
interest in, to, or respecting the Warrant.

     6.   Deponent  makes  this  Affidavit  for the  purpose of  requesting  and
inducing the Company and its agents to issue a new warrant in  substitution  for
the Warrant.
<PAGE>
     7.   If the Warrant  should  ever come into the hands,  custody or power of
the Deponent or the Deponent's representatives,  agents or assigns, the Deponent
will immediately and without consideration surrender the Warrant to the Company,
its  representatives,  agents or assigns,  its transfer  agents or  subscription
agents for cancellation.

     8.   The Deponent  hereby  indemnifies  and holds harmless the Company from
any claim or demand  for  payment  or  reimbursement  of any  party  arising  in
connection with the subject matter of this Affidavit.

Signed, sealed and dated: _________________________

                                        ________________________________________
                                        Deponent

Sworn to and subscribed before me this
____ day of _____________, _________

______________________________________
Notary Public

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