Document:

WARRANT

EXHIBIT 4.7

 

WARRANT

 

THIS WARRANT

AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN

REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 (“ACT”) OR APPLICABLE STATE

SECURITIES LAWS (“STATE ACTS”) AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED,

DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE

HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF

COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS MAY BE SATISFACTORY TO

COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER

SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.

 

WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK

 

EPICEDGE, INC.

(a Texas corporation)

3200 Wilcrest Drive, Suite 370

Houston, Texas 77042-2374

 

Not Transferable or Exercisable Except

upon Conditions Herein Specified

 

EPICEDGE,

INC., a Texas corporation (“Company”), hereby certifies that Dr. Robert

Maddocks, his registered successors and permitted assigns registered on the

books of the Company maintained for such purposes, as the registered holder

hereof (“Holder”), for value received in consideration for services to be

rendered to the Company as an advisory director, is entitled to purchase from

the Company the number of fully paid and non-assessable shares of Common Stock

of the Company, $.01 par value (“Shares” or “Common Stock”), stated above at

the purchase price per Share set forth in Section 1(b) below (“Exercise Price”)

(the number of Shares and Exercise Price being subject to adjustment as

hereinafter provided) upon the terms and conditions herein provided.

 

1.             Exercise of Warrants.

 

(a)           Subject to subsection (b) of this

Section 1 and Section 10, upon presentation and surrender of this Warrant

Certificate, with the attached Purchase Form duly executed, at the principal

office of the Company, or at such other place as the Company may designate by

notice to the Holder hereof, together with a certified or bank cashier’s check

payable to the order of the Company in the amount of the Exercise Price times

the number of Shares being purchased, the Company shall deliver to the Holder

hereof, as promptly as practicable, certificates representing the Shares being

purchased.  This Warrant may be exercised

in whole or in part; and, in case of exercise hereof in part only, the Company,

upon surrender hereof, will deliver to the Holder a new Warrant Certificate or

Warrant Certificates of like tenor entitling the Holder to purchase the number

of Shares as to which this Warrant has not been exercised.

 

 

(b)           This Warrant may be exercised at a

price of $21.875 per share.  This

Warrant shall vest and become exercisable as follows: (i) 8,333 shares

underlying the Warrant shall vest and become exercisable as of the date hereof,

(ii) 8,333 shares underlying the Warrant shall vest and become exercisable on

March 20, 2001, and (iii) 8,334 shares underlying the Warrant shall vest and

become exercisable on March 20, 2002. 

The Warrant shall expire upon the close of business March 20, 2005.

 

(c)           The Warrant Price shall be payable at

the time of exercise.  The Warrant Price

may be paid in cash, by cashier’s check, or by wire transfer.

 

2.             Exchange and Transfer of Warrant.

 

At any time

prior to the exercise hereof, upon presentation and surrender to the Company,

this Warrant (a) may be exchanged, alone or with other Warrants of like tenor

registered in the name of the Holder, for another Warrant or other Warrants of

like tenor in the name of such Holder exercisable for the same aggregate number

of Shares as the Warrant or Warrant; surrendered, but (b) may not be sold,

transferred, hypothecated, or assigned, in whole or in part, without the prior

written consent of the Company.

 

3.             Rights and Obligations of

Warrant Holder.

 

(a)           The Holder of this Warrant Certificate

shall not, by virtue hereof, be entitled to any rights of a stockholder in the

Company, either at law or in equity; provided, however, that in the

event that any certificate representing the Shares is issued to the Holder

hereof upon exercise of this Warrant, such Holder shall, for all purposes, be

deemed to have become the holder of record of such Shares on the date on which

this Warrant Certificate, together with a duly executed Purchase Form, was

surrendered and payment of the Exercise Price was made, irrespective of the

date of delivery of such Share certificate. 

The rights of the Holder of this Warrant are limited to those expressed

herein and the Holder of this Warrant, by his acceptance hereof, consents to

and agrees to be bound by and to comply with all the provisions of this Warrant

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

the Holder hereof by Sections 2 and 5 hereof. 

In addition, the Holder of this Warrant Certificate, by accepting the

same, agrees that the Company may deem and treat the person in whose name this

Warrant Certificate is registered or the books of the Company maintained for

such purposes as the absolute, true and lawful owner for all purposes

whatsoever, notwithstanding any notation of ownership or other writing thereon,

and the Company shall not be affected by any notice to the contrary.

 

(b)           No Holder of this Warrant

Certificate, as such, shall be entitled to vote or receive dividends or to be

deemed the holder of Shares for any purpose, nor shall anything contained in

this Warrant Certificate be construed to confer upon any Holder of this Warrant

Certificate, as such, any of the rights of a stockholder of the Company or any

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

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

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

other action affecting stockholders (except for notices provided for herein),

receive dividends,

 

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subscription rights, or

otherwise, until this Warrant shall have been exercised and the Shares

purchasable upon the exercise thereof shall have become deliverable as provided

herein;  provided, however, that

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

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

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

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

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

Warrant surrendered shall not be deemed to have been exercised, in whole or in

part as the case may be, until the next succeeding day on which stock transfer

books are open for the purpose of determining entitlement to dividends on the

Company’s common stock.

 

4.             Shares Underlying Warrants.

 

The Company

covenants and agrees that all Shares delivered upon exercise of this Warrant

shall, upon delivery and payment therefore, be duly and validly authorized and

issued, fully paid and non-assessable, and free from all stamp taxes, liens and

charges with respect to the purchase thereof. 

In addition, the Company agrees at all times to reserve and keep

available an authorized number of Shares sufficient to permit the exercise in

full of this Warrant.

 

5.             Disposition of Warrants or

Shares.

 

(a)           The Holder of this Warrant

Certificate and any transferee hereof or of the Shares issuable upon the

exercise of the Warrant Certificate, by their acceptance hereof, hereby

understand and agree that the Warrant, and the Shares issuable upon the

exercise hereof, have not been registered under either the Securities Act of

1933 (“Act”) or applicable state securities laws (“State Acts”) and shall not

be sold, pledged, hypothecated, or otherwise transferred (whether or not for

consideration) except upon the issuance to the Company of an opinion of counsel

favorable to the Company or its counsel or submission to the Company of such

evidence as may be satisfactory to the Company or its counsel, in each such

case, to the effect that any such transfer shall not be in violation of the Act

or the State Acts.  It shall be a

condition to the transfer of this Warrant that any transferee of this Warrant

deliver to the Company his written agreement to accept and be bound by all of

the terms and conditions of this Warrant Certificate.  The Holder acknowledges that the Company has not granted any

registration rights hereunder.

 

(b)           The stock certificates of the Company

that will evidence the shares of Common Stock with respect to which this

Warrant may be exercisable will be imprinted with a conspicuous legend in

substantially the following form:

 

“The

securities represented by this certificate have not been registered under

either the Securities Act of 1933 (“Act”) or the securities laws of any state

(“State Acts”).  Such securities shall

not be sold, pledged, hypothecated, or otherwise transferred (whether or not

for consideration) at any time whatsoever except upon registration or upon

delivery to the Company of an opinion of its counsel satisfactory to the

Company or its counsel that registration is not required for such transfer or

the submission of such other 

 

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evidence as

may be satisfactory to the Company or its counsel to the effect that any such

transfer shall not be in violation of the Act, State Acts or any rule or

regulation promulgated thereunder.”

 

6.             Adjustments.

 

The number of

Shares purchasable upon the exercise of each Warrant is subject to adjustment

from time to time upon the occurrence of any of the events enumerated below:

 

(a)           If at any time after the date of this

Warrant and so long as this Warrant is outstanding, there is a stock split,

stock dividend, subdivision, or similar distribution with respect to the Common

Stock, or a combination of the Common Stock, then, in such event, the exercise

price shall be adjusted in accordance with (b) below.

 

(b)           Immediately upon the effective date

of any event requiring adjustment pursuant to (a), the Company shall adjust the

exercise price then in effect (to the nearest whole cent) as follows:

 

i)              in

the event such adjustment is caused by stock split, stock dividend,

subdivision, or other similar distribution of shares of Common Stock, the

exercise price in effect, immediately prior to the effective date of such event

shall be decreased to an amount which shall bear the same relation to the

exercise price in effect immediately prior to such event as the total number of

shares of Common Stock outstanding immediately prior to such event bears to the

total number of shares of Common Stock outstanding immediately after such

event;

 

ii)             in

the event such adjustment is caused by a combination of shares of Common Stock,

the exercise price in effect immediately prior to the close of business on the

effective date of such event shall be increased to an amount which shall bear

the same relation to the exercise price in effect immediately prior to such

event as the total number of shares of Common stock outstanding immediately

prior to such event bears to the total number of shares of Common Stock

outstanding immediately after such event.

 

(c)           Upon each adjustment of the exercise

price pursuant to (b) above, the Warrant outstanding prior to such adjustment

in the exercise price shall thereafter evidence the right to purchase, at the

adjusted exercise price, that number of shares of Common Stock (calculated to

the nearest hundredth) obtained by (i) multiplying the number of shares of

Common Stock issuable upon exercise of the Warrant prior to adjustment of the

number of shares of Common Stock by the exercise price in effect prior to

adjustment of the exercise price and (ii) dividing the product so obtained by

the exercise price in effect after such adjustment of the exercise price.

 

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7.             Loss or Destruction.

 

Upon receipt

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

mutilation of this Warrant Certificate and, in the case of any such loss, theft

or destruction, upon delivery of an indemnity agreement or bond satisfactory in

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

upon surrender and cancellation of this Warrant Certificate, the Company at its

expense will execute and deliver, in lieu thereof, a new Warrant Certificate of

like tenor.

 

8.             Survival.

 

The various

rights and obligations of the Holder hereof as set forth herein shall survive

the exercise of the Warrants represented hereby and the surrender of this

Warrant Certificate.

 

9.             Notices.

 

Whenever any

notice, payment of any purchase price, or other communication is required to be

given or delivered under the terms of this Warrant, it shall be in writing and

delivered by hand delivery or United States registered or certified mail,

return receipt requested, postage prepaid (or similar delivery if outside of

the United States), and will be deemed to have been given or delivered on the

date such notice, purchase price or other communication is so delivered or

posted, as the case may be; and, if to the Company, it will be addressed to the

address specified in Section 1 hereof, and if to the Holder, it will be addressed

to the registered Holder at its, his or her address as it appears on the books

of the Company.

 

10.           Termination of Service.

 

Notwithstanding

any provision to the contrary in this Warrant, this Warrant shall terminate and

no longer be exercisable immediately upon termination of the Holder’s services

as an advisory director prior to March 20, 2002.  Otherwise the Warrant shall terminate on March 20, 2005.

 

	

   

  	

  EPICEDGE,

  INC.

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Jeffrey

  S. Sexton

  	

   

  
	

   

  	

  Jeffrey S.

  Sexton, President

  
	

   

  	

  Dated: March

  20, 2000

  
	

   

  	

   

  
	

   

  	

  HOLDER:

  
	

   

  	

   

  
	

   

  	

  By: 

  	

   /s/ Dr. Robert Maddocks

  	

   

  
	

   

  	

   Dr. Robert Maddocks

  
	

   

  	

   Dated: March 20, 2000

  
						

 

5WARRANT

EXHIBIT 4.8

 

WARRANT TO PURCHASE COMMON STOCK

 

                                                                                                                                                                Warrant to Subscribe
                                                                                                                                                                for

500,000 Shares

 

VOID AFTER 5:00 P.M., HOUSTON, TEXAS TIME AS

PROVIDED IN SECTION 1(a)

 

THIS

SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE

IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE

SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).

 

THE

SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE ACT

OR REGISTERED OR QUALIFIED UNDER ANY OTHER APPLICABLE FEDERAL OR STATE

SECURITIES LAWS.  THESE SECURITIES MAY

NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN

EFFECTIVE REGISTRATION UNDER SUCH LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO

THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

EPICEDGE,

INC.  (f/k/a Design Automation Systems,

Inc.), a Texas corporation (the “Company”), hereby certifies that, in

consideration of $5,000.00 received, Reliant Energy Ventures, Inc., a Delaware

corporation ( the “Holder”), is entitled, subject to the terms and conditions

set forth herein, to purchase from the Company 500,000 shares of the common

stock, $.01 par value, of the Company (the “Company Common Stock”), at a

purchase price per share of $22.00 (the “Exercise Price”).  The number and character of the shares

purchasable upon exercise of this Warrant and the Exercise Price are subject to

adjustment as provided herein.  The term

“Warrant” as used herein shall include this Warrant, any Warrant issued in

substitution for or replacement of this Warrant or any Warrant into which this

Warrant may be divided or exchanged. 

The shares of Company Common Stock purchasable upon the exercise of this

Warrant are hereinafter sometimes referred to as “Warrant Shares”.

 

This Warrant

may be assigned, transferred, sold, offered for sale or exercised by the Holder

only upon compliance with all the pertinent provisions hereof.

 

1.             Exercise of Warrant.

 

(a)           Exercise Period.    The Holder may exercise, in whole or in part

(including as to a fractional share of Company Common Stock), the purchase

rights represented by this Warrant at any time and from time to time after the

earlier to occur of (i) sixty (60) days after the consummation of a registered

public offering of Company Common Stock by the Company under the Act and (ii)

October 3, 2001 (such earlier date being the “Vesting Date”), until 5:00 p.m.,

Houston, Texas time, on the third anniversary of the Vesting Date (the

“Exercise Period”).  In the event the

Company sells all or substantially all of its assets or is a party to a merger,

consolidation or exchange in which it is not the surviving party, the Vesting

Date shall immediately accelerate to the effective date of such transaction.

 

 

(b)           Exercise Procedure.

 

(i)              This Warrant will

be deemed to have been exercised at such time during the Exercise Period as the

Company has received all of the following items (the “Exercise Time”):

 

(A)          a completed Notice of

Exercise, as described in Section 1(c) below, executed by the person (as

hereinafter defined) exercising all or part of the purchase rights represented

by this Warrant (the “Purchaser”);

 

(B)           this Warrant; and

 

(C)           a check payable, or

wire transfer of immediately available funds, to the Company in an amount equal

to the product of the Exercise Price multiplied by the number of shares of

Company Common Stock being purchased upon such exercise.

 

(ii)           Certificates for

shares of Company Common Stock purchased upon exercise of this Warrant will be

delivered by the Company to the Purchaser within five (5) business days after

the date of the Exercise Time.  Each

share of Company Common Stock issuable upon exercise of this Warrant will, upon

payment of the Exercise Price therefor, be fully paid and nonassessable and

free from all liens and charges with respect to the issuance thereof.  Unless this Warrant has expired or all of

the purchase rights represented hereby have been exercised, the Company will

prepare a new Warrant, substantially identical hereto, representing the rights

formerly represented by this Warrant which have not expired or been exercised

and reflecting the appropriate adjustments required hereunder, and will, within

such five-day period, deliver such new Warrant to the person designated for

delivery in the Notice of Exercise.

 

(iii)          Upon the exercise of

this Warrant in whole or in part, the Holder may, at its option, submit to the

Company written instructions from such Holder to apply any specified portion of

the Warrant Shares issuable upon such exercise in payment of the Exercise Price

required upon such exercise, in which case the Company will accept such

specified portion of the Warrant Shares (at a value per share equal to the then

fair market value of such Warrant Shares less the Exercise Price then in

effect), in lieu of a like amount of such cash payment.

 

(c)           Notice of Exercise.  Upon any exercise of this Warrant, the

Notice of Exercise will be substantially in the form set forth in Exhibit 1

hereto, except that if the shares of Company Common Stock are not to be issued

in the name of the Holder in whose name this Warrant is registered, the Notice

of Exercise will also state the name of the Affiliate (as herein after defined)

to whom the certificates for the shares of Company Common Stock are to be

issued, and if the number of shares of Company Common Stock to be issued does

not include all the shares of Company Common Stock purchasable hereunder, it

will also state the name of the Holder or the Affiliate to 

 

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whom a new Warrant for the

unexercised portion of the rights hereunder is to be delivered.  Such Notice of Exercise will be dated the

actual date of execution thereof.

 

2.             Adjustment of Exercise Price.

 

(a)           Adjustment.  If, at any time during the Exercise Period,

the number of outstanding shares of Company Common Stock is (i) increased by a

stock dividend payable in shares of Company Common Stock or by a subdivision or

split-up of shares of Company Common Stock, or (ii) decreased by a combination

of shares of Company Common Stock, then, following the record date fixed for

the determination of holders of Company Common Stock entitled to receive the

benefits of such stock dividend, subdivision, split-up, or combination, as the

case may be, the Exercise Price shall be adjusted to a new amount equal to the

product of (A) the Exercise Price in effect on such record date and (B) the

quotient obtained by dividing (x) the number of shares of Company Common Stock

outstanding on such record date (without giving effect to the event referred to

in the foregoing clause (i) or (ii)) by (y) the number of shares of Company

Common Stock which would be outstanding immediately after the event referred to

in the foregoing clause (i) or (ii), if such event had occurred immediately

following such record date.

 

(b)           Calculations.  All calculations under this Section 2 shall

be made to the nearest one/one hundredth (1/100) of a cent.

 

(c)           Statement.  Whenever the Exercise Price shall be

adjusted as provided above, the Company shall promptly deliver to the Holder a

statement showing in detail the facts requiring such adjustment and the

Exercise Price that shall be in effect after such adjustment.

 

3.             Adjustment of Warrant Shares.  Upon each adjustment of the Exercise Price

as provided in Section 2, the Holder shall thereafter be entitled to subscribe

for and purchase, at the Exercise Price resulting from such adjustment, the

number of Warrant Shares equal to the product of (i) the number of Warrant

Shares existing prior to such adjustment and (ii) the quotient obtained by

dividing (A) the Exercise Price existing prior to such adjustment by (B) the

new Exercise Price resulting from such adjustment.  No fractional shares of Company Common Stock shall be issued upon

exercise of this Warrant.  Instead of

any fractional shares of Company Common Stock which would otherwise be issuable

upon exercise of this Warrant, the Holder may deduct from the aggregate

Exercise Price an amount equal to the product of (i) the Exercise Price and

(ii) such fractional interest.

 

4.             Reorganization and

Recapitalization.  In case of any

capital reorganization or reclassification (including any change or exchange of

the outstanding Company Common Stock into a stock with par value to stock with

a different par value or no par value), or any consolidation or merger to which

the Company is a party other than a merger or consolidation in which the

Company is the continuing corporation, or in case of any sale or conveyance to

another entity of the property of the Company as an entirety or substantially

as an entirety, or in the case of any statutory exchange of securities with

another corporation (including any exchange effected in connection with a

merger of a third corporation into the Company) (each such event, a “Corporate

Event”), the Holder of this Warrant shall have the right thereafter to receive

on the exercise of this Warrant the kind and amount of securities, cash or

other property which the Holder would have owned or have been entitled to 

 

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receive immediately after such

Corporate Event had this Warrant been exercised immediately prior to the

effective date of such Corporate Event and in any such case, if necessary,

appropriate adjustment shall be made in the application of the provisions set

forth in Sections 2, 3 and 4 with respect to the rights and interests

thereafter of the Holder of this Warrant to the end that the provisions set

forth in Sections 2, 3 and 4 shall thereafter correspondingly be made

applicable, as nearly as may reasonably be, in relation to any shares of stock

or other securities or property thereafter deliverable on the exercise of this

Warrant.  The above provisions of this

Section 4 shall similarly apply to successive Corporate Events.  The Company shall require the issuer of any

shares of stock or other securities or property thereafter deliverable on the

exercise of this Warrant to be responsible for all of the agreements and

obligations of the Company hereunder.  A

sale of all or substantially all of the assets of the Company for a

consideration consisting primarily of securities shall be deemed a

consolidation or merger for the foregoing purposes.

 

5.             Restrictions on Sale.  Notwithstanding anything to the contrary

contained herein, the Holder and all Affiliates agree not to sell, transfer or

otherwise dispose of more than four thousand nine hundred ten (4,910) Warrant

Shares per week, on a cumulative basis, for a period of two (2) years after the

exercise of this Warrant; provided, however, that if the Company sells all or substantially

all of its assets or is a party to a merger, consolidation or exchange in which

it is not the surviving party, this Section 5 shall lapse and be of no further

legal consequence.

 

6.             No Voting Rights; Limitations of

Liability.  This Warrant will not

entitle the Holder hereof to any voting rights or other rights as a shareholder

of the Company.  No provision hereof, in

the absence of affirmative action by the Holder to purchase Company Common

Stock, and no enumeration herein of the rights or privileges of the Holder

shall give rise to any liability of such Holder for the Exercise Price of

Company Common Stock acquirable by exercise hereof or as a shareholder of the

Company.

 

7.             Transfer.  Notwithstanding anything to the contrary

contained herein, the Holder may not assign, transfer, re-certificate, sell or

otherwise dispose of this Warrant to any person or entity other than an

Affiliate (as hereinafter defined) of the Company.  For purposes of this Warrant, the term “Affiliate” means (a) a

person or entity that directly or indirectly owns fifty percent (50%) or more

of the capital stock of Reliant Energy Ventures, Inc. or (b) any direct or

indirect wholly-owned subsidiary of Reliant Energy Ventures, Inc.  This Warrant, the Warrant Shares and all other

securities issued or issuable upon exercise of this Warrant may not be offered,

sold, transferred, or otherwise disposed of, in whole or in part, in the

absence of an effective registration statement under the Act, and all

applicable state securities statutes or an opinion of counsel acceptable to the

Company to the effect that such registration is not required.

 

8.             Replacement.  Upon receipt of evidence reasonably

satisfactory to the Company of the ownership and the loss, theft, destruction

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

destruction, upon receipt of indemnity reasonably satisfactory to the Company,

or, in the case of any such mutilation upon surrender of such Warrant, the

Company will (at its expense, except that the cost of any lost security

indemnity bond required shall be paid for by the Holder) execute and deliver in

lieu of such Warrant a new Warrant of like kind representing the same rights 

 

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represented by such lost,

stolen, destroyed or mutilated Warrant and dated the date of such lost, stolen,

destroyed or mutilated Warrant.

 

9.             Warrant Shares to be Fully Paid.  The Company covenants that all of the

Warrant Shares that may be issued and delivered to a Holder of this Warrant

upon the exercise of this Warrant will, upon such delivery, be duly authorized,

validly issued, fully paid and nonassessable and not subject to preemptive

rights or rights of first refusal, and the Company shall take all such actions as

may be necessary to assure that the par value, if any, per share of the Company

Common Stock is at all times equal to or less than the Exercise Price.  The Company shall pay, when due and payable,

any and all federal and state stamp, original issue or similar taxes which may

be payable in respect of the issue of any Warrant Share or any certificate

thereof to the extent required because of the issuance by the Company of such

security.  The Company will not, however,

be required to pay any such taxes imposed in connection with any transfer of

this Warrant or any Warrant Shares or any federal or state income taxes payable

in respect of the purchase, ownership, sale, transfer, exercise or other

disposition of this Warrant or any Warrant Shares.

 

10.           Notices.  All notices referred to in this Warrant

shall be in writing and shall either be delivered personally to the recipient,

sent to the recipient by telecopy with confirmed receipt (with hard copy to

follow), sent to the recipient by reputable express courier service (charges

prepaid) or sent by registered or certified mail, return receipt requested,

postage prepaid, and shall be deemed to have been given when so personally

delivered or sent by telecopy with confirmed receipt, one business day after

being sent, or five business days after being deposited in the U.S. Mail (a) to

the Company at 3200 Wilcrest Drive, Suite 370, Houston, Texas 77042-6018,

telecopy (713) 784-2486, and (b) to the Holder of this Warrant, at such

Holder’s address as it appears in the corporate records of the Company (except

as otherwise indicated in writing by any such Holder).

 

11.           Amendment and Waiver.  Except as otherwise provided herein, the

provisions of this Warrant may be amended only in a writing executed by the

Holder and the Company.

 

12.           Reservation of Shares.  The Company shall at all times reserve and

keep available out of its authorized but unissued shares of Company Common

Stock, solely for the purpose of issuance upon the exercise of the Warrant,

such number of shares of Company Common Stock as is then issuable upon the

exercise of all outstanding Warrants.

 

13.           Piggyback Registration Rights.

 

(a)           Right to Piggyback.  For purposes of this Warrant, the term

“Registrable Securities” shall mean the Warrant Shares.  At any time after this Warrant has been

exercised for Warrant Shares in accordance herewith and whenever the Company

proposes to register any of its securities under the Act (other than pursuant

to a registration on Form S-4 or Form S-8 or any successor or similar forms)

and the registration form to be used may be used for the registration of

Registrable Securities (a “Piggyback Registration”), whether or not for

sale for its own account, the Company will give prompt written notice to all

holders of Registrable Securities of its intention to effect such a

registration and will, subject to the provisions of this Section 13 and the

priority of any registration rights granted to any person or entity by the

Company prior to the date of this Warrant, 

 

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include in such registration

all Registrable Securities with respect to which the Company has received

written requests for inclusion therein within fifteen (15) days after the

receipt of the Company’s notice.

 

(b)           Priority on Secondary

Registrations.  If a Piggyback

Registration involves an underwritten registration on behalf of holders of the

Company’s securities other than the holders of Registrable Securities, and the

managing underwriters advise the Company in writing that in their opinion the

number of securities requested to be included in such registration exceeds the

number which can be sold in such offering without adversely affecting the

marketability of the offering, the Company will include in such registration (i)

first, the securities requested to be included therein by the holders of such

securities requesting such registration, pro rata among those holders on the

basis of the number of shares that such holder has requested to be included in

such registration and (ii) second, the Registrable Securities requested to be

included in such registration and the other securities requested to be included

in such registration, pro rate among the holders of such securities.

 

14.           Holdback Agreement.

 

(a)           Each holder of Registrable Securities

agrees not to effect any public sale or distribution (including sales pursuant

to Rule 144) of equity securities of the Company, or any securities, options or

rights convertible into or exchangeable or exercisable for such securities, during

the seven (7) days prior to and the ninety (90) day period beginning on the

effective date of any underwritten Piggyback Registration (except as part of

such underwritten registration), unless the underwriters managing the

registered public offering otherwise agree.

 

(b)           The Company agrees not to effect any

public sale or distribution of its equity securities, or any securities

convertible into or exchangeable or exercisable for such securities, during the

seven (7) days prior to and the ninety (90) day period beginning on the

effective date of any underwritten Piggyback Registration (except as part of

such underwritten registration or pursuant to registrations on Form S-4 or Form

S-8 or any successor form), unless the underwriters managing the registered

public offering otherwise agree.

 

15.           Registration Procedures.  Whenever the holders of Registrable

Securities have requested that any Registrable Securities be registered

pursuant to this Agreement, the Company will use its best efforts to effect the

registration and the sale of such Registrable Securities in accordance with the

intended method of disposition thereof and pursuant thereto the Company will:

 

(a)           prepare and file with the Securities

and Exchange Commission a registration statement with respect to such

Registrable Securities and thereafter use its best efforts to cause such

registration statement to become effective;

 

(b)           prepare and file with the Securities

and Exchange Commission such amendments and supplements to such registration

statement and the prospectus used in connection therewith as may be necessary

to keep such registration statement effective for a period of either (i) not

less than six months or, if such registration statement relates to an

underwritten offering, such longer period as in the opinion of counsel for the

underwriters a prospectus is required by law to be 

 

6

 

delivered in connection with

sales of Registrable Securities by an underwriter or dealer or (ii) such

shorter period as will terminate when all of the securities covered by such

registration statement have been disposed of in accordance with the intended

methods of disposition by the seller or sellers thereof set forth in such

registration statement (but in any event not before the expiration of any

longer period required under the Act), and to comply with the provisions of the

Act with respect to the disposition of all securities covered by such

registration statement until such time as all of such securities have been

disposed of in accordance with the intended methods of disposition by the

seller or sellers thereof set forth in the registration statement;

 

(c)           furnish to each seller of Registrable

Securities such number of copies of such registration statement, each amendment

and supplement thereto, the prospectus included in such registration statement

(including each preliminary prospectus) and such other documents as such seller

may reasonably request in order to facilitate the disposition of the

Registrable Securities owned by such seller;

 

(d)           use best efforts to register or

qualify such Registrable Securities under such other securities or blue sky

laws of such jurisdictions as any seller reasonably requests and do any and all

other acts and things which may be reasonably necessary or advisable to enable

such seller to consummate the disposition in such jurisdictions of the

Registrable Securities owned by such seller (provided, that the Company

will not be required to (i) qualify generally to do business in any

jurisdiction where it would not otherwise be required to qualify but for this

subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii)

consent to general service of process in any such jurisdiction);

 

(e)           notify each seller of such Registrable

Securities, at any time when a prospectus relating thereto is required to be

delivered under the Act, upon discovery that, or upon the discovery of the

happening of any event as a result of which, the prospectus included in such

registration statement contains an untrue statement of a material fact or omits

any fact necessary to make the statements therein not misleading in the light

of the circumstances under which they were made, and, at the request of any

such seller, the Company will prepare and furnish to such seller a reasonable

number of copies of a supplement or amendment to such prospectus so that, as

thereafter delivered to the purchasers of such Registrable Securities, such

prospectus will not contain an untrue statement of a material fact or omit to

state any fact necessary to make the statements therein not misleading in the

light of the circumstances under which they were made;

 

(f)            provide a transfer agent and

registrar for all such Registrable Securities not later than the effective date

of such registration statement;

 

(g)           notify the Holders of any stop order

issued or threatened by the Securities and Exchange Commission and take all

reasonable actions required to prevent the entry of such stop order or to

remove it if entered;

 

(h)           cause the prospectus to be

supplemented by any required prospectus supplement and as so supplemented to be

filed pursuant to Rule 424 under the Act;

 

7

 

(i)            make “generally available to its

security holders” within the meaning of Rule 158 an earnings statement

satisfying the provisions of Section 11(a) of the Act and Rule 158 thereunder

no later than 90 days after the end of the 12-month period beginning with the

first day of the Company’s first fiscal quarter commencing after the effective

date of the registration statement;

 

(j)            make every reasonable effort to

obtain the withdrawal of any order suspending the effectiveness of the

registration statement at the earliest possible moment;

 

(k)           if requested by the managing

underwriter or underwriters, if any, or the Holder, promptly incorporate in a

prospectus supplement or post-effective amendment such information as the

managing underwriter or underwriters or the Holders, as the case may be,

reasonably requests to be included therein including, without limitation,

information with respect to the number of shares of Company Common Stock being

sold by the Holder to any underwriter, or underwriters, the purchase price

being paid therefor by such underwriter or underwriters and with respect to any

other terms of an underwritten offering of the shares of Company Common Stock

to be sold in such offering, and promptly make all required filings of such

prospectus by supplement or post-effective amendment;

 

(l)            make available for inspection by the

Holder, any underwriter participating in any disposition pursuant to such

registration statement and the counsel retained by the Holder, counsel for the

underwriters and any accountant or other agent retained by the Holder or any

such underwriter (collectively the “Inspectors”) all financial and other

records, pertinent corporate documents and properties of the Company (the

“Records”) as shall be reasonably necessary to enable them to exercise their

due diligence responsibility, and cause the Company’s officers, directors and

employees to supply all information reasonably requested by any such Inspectors

in connection with such registration statement; provided, that Records which

the Company determines, in good faith, to be confidential and which the Company

notifies the Inspectors are confidential shall not be disclosed by the

Inspectors unless (i) the disclosure of such Records is necessary to avoid or

correct a misstatement or omission in the registration statement or (ii) the release

of such Records is ordered pursuant to a subpoena or other order from a court

of competent jurisdiction after delivery of sufficient notices to the Company

to enable the Company to contest such subpoena or order;

 

(m)          enter into such customary agreements

(including underwriting agreements in customary form) and take all such other

actions in order to expedite or facilitate the disposition of such Registrable

Securities;

 

(n)           take all other steps reasonably

necessary to effect the registration of the shares of Company Common Stock

contemplated hereby; and

 

(o)           cause all such shares of Company

Common Stock to be listed or included not later than the date of the first sale

of shares of Company Common Stock under such registration statement on any

securities exchanges or trading systems on which similar securities issued by

the Company are then listed or included.

 

8

 

16.           Indemnification.

 

(a)           In connection with any registration

under this Agreement, the Company shall indemnify, to the extent permitted by

law, the Holder against all losses, claims, damages, liabilities and expenses

arising out of or resulting from any untrue or alleged untrue statement of

material facts contained or incorporated by reference in any registration

statement, prospectus or preliminary prospectus or associated term sheet or any

omission or alleged omission to state or incorporate by reference therein a

material fact required to be stated or incorporated by reference therein or necessary

to make the statements therein not misleading except insofar as the same are

caused by or contained in or omitted from any information furnished in writing

to the Company by the Holder expressly for use therein or by the Holder’s

failure to deliver a copy of the registration statement or prospectus or any

amendment or supplement thereto after the Company has furnished the Holder with

a sufficient number of copies of the same.

 

(b)           In connection with any registration

under this Agreement, the Holder shall furnish to the Company in writing such

information concerning the Holder and its proposed offering of shares as is

reasonably requested by the Company for use in any such registration statement

or prospectus and will indemnify, to the extent permitted by law, the Company,

its directors and officers and each person who controls the Company (within the

meaning of the Act) against any losses, claims, damages, liabilities and

expenses resulting from any untrue or alleged untrue statement of a material

fact or any omission or alleged omission to state therein a material fact

required to be stated in the registration statement or prospectus or any

amendment thereof or supplement thereto or necessary to make the statements

therein not misleading, but only to the extent that such untrue or alleged

untrue statement or omission or alleged omission is contained in or omitted

from information so furnished in writing to the Company by the Holder expressly

for use in the registration statement. 

Notwithstanding the foregoing, the liability of the Holder under this

Section shall be limited to an amount equal to the net proceeds actually

received by the Holder from the sale of the relevant shares covered by the

registration statement.

 

(c)           Any person entitled to indemnification

hereunder will (i) give prompt notice to the indemnifying party of any claim

with respect to which it seeks indemnification and (ii) unless in such

indemnified parties’ reasonable judgment, a conflict of interest between such

indemnified and indemnifying parties may exist with respect to such claim,

permit such indemnifying party to assume the defense of such claim with counsel

reasonably satisfactory to the indemnified party.  Any failure to give prompt notice shall deprive a party of its

right to indemnification hereunder only to the extent that such failure shall

have adversely affected the indemnifying party.  If the defense of any claim is assumed, the indemnifying party

will not be subject to any liability for any settlement made without its consent

(but such consent shall not be unreasonably withheld).  An indemnifying party that is not entitled

or elects not to assume the defense of a claim will not be obligated to pay the

fees and expenses of more than one counsel for all parties indemnified by such

indemnifying party with respect to such claim, unless in the reasonable

judgment of any indemnified party a conflict of interest may exist between such

indemnified party and any other of such indemnified parties with respect to

such claim.

 

9

 

17.           Underwriting Agreement.  In connection with each registration

hereunder covering an underwritten registered offering, (i) the Holder shall

execute and deliver to the Company a written power of attorney instrument that

(A) appoints an officer of the Company as such Holder’s attorney-in-fact for

purposes of executing and delivering an underwriting agreement among the

Company, the underwriters named therein and the Holder specifying the terms and

conditions applicable to the sale of the Company Common Stock of the Holder in

such offering and (B) otherwise is in such form and containing such provisions

as are customary in the securities business for such an arrangement in

connection with an underwritten registered offering in which the Holder is a

participant, including a provision that authorizes the attorney-in-fact

appointed by the Holder to execute and deliver such an underwriting agreement

in the event that the net price per share to be received by the Holder from the

sale of the shares of Company Common Stock to be sold in such offering is not

less than a price specified in such instrument and (ii) the Company and the

Holder agree to enter into a written agreement with the managing underwriters

in such form and containing such provisions as are customary in the securities

business for such an arrangement between such managing underwriters and

companies of the Company’s size and investment stature, including

indemnification; provided, however, that (A) the Holder shall be exempt and

excluded from any indemnification of the managing underwriters other than with

respect to information provided by the Holder with respect to the Holder to the

Company or the managing underwriters specifically for inclusion in any such registration

statement and (B) the Holder shall not be obligated to enter into such an

underwriting agreement in the event that the net price per share to be received

by the Holder from the sale of shares of Company Common Stock to be sold in

such offering is less than the floor price specified in the power of attorney

instruments executed and delivered to the Company pursuant to clause (i) above.

 

18.           Transfer of Rights.  The right to cause the Company to register

shares of Company Common Stock under this Agreement may be assigned to a

transferee or assignee of any Holder to the extent that such transfer or

assignee is an Affiliate.

 

19.           Rule 144 Reporting.  With a view to making available the benefits

of certain rules and regulations of the Securities and Exchange Commission that

may permit the sale of Company Common Stock to the public without registration,

the Company agrees to use its reasonable efforts, to:

 

(a)           Make and keep public information

regarding the Company available as those terms are understood and defined in

Rule 144 under the Act;

 

(b)           file with the Securities and Exchange

Commission in a timely manner all reports and other documents required of the

Company under the Act and the Securities Exchange Act of 1934 (the “1934 Act”);

and

 

(c)           as long as the Holder owns any

restricted Company Common Stock, furnish to the Holder forthwith upon written

request a written statement by the Company as to its compliance with the

current public information requirements of Rule 144, and of the Act and the 1934

Act, a copy of the most recent annual or quarterly report of the Company, and

such other reports and documents so filed as the Holder may reasonably request

in availing itself of any rule or regulation of the Securities and Exchange

Commission allowing the Holder to sell any such shares without registration.

 

10

 

20.           Miscellaneous Provisions.

 

(i)            Subject to the

terms and conditions contained herein, this Warrant shall be binding on the

Company and its successors and assigns and shall inure to the benefit of the

original Holder, its successors and assigns and all permitted holders of

Warrant Shares.

 

(ii)           Section headings

and the several parts used in this Warrant are for convenience only and shall

not be taken or construed to define or limit any of the terms or provisions of

this Warrant.  Unless otherwise provided

herein, or unless the context otherwise requires, the use of the singular shall

include the plural and the use of any gender shall include all genders.

 

21.           Governing Law.    The construction, validity and

interpretation of this Warrant will be governed by the laws of the State of

Texas.

 

[SIGNATURE PAGE FOLLOWS]

 

11

 

IN WITNESS

WHEREOF, the Company has caused this Warrant to be executed by its duly

authorized officer and to be dated April 11, 2000.

 

	

   

  	

  EPICEDGE,

  INC.

  
	

   

  	

  (f/k/a

  Design Automation Systems, Inc.),

  a Texas corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  [ILLEGIBLE]

  	 

	

   

  	

  Its:

  	

   Chief Executive Officer

  

 

12

 

EXHIBIT 1

 

NOTICE OF EXERCISE

 

(To be executed by a Holder

desiring to exercise the right to purchase common stock of Design Automation

Systems, Inc. (d/b/a EpicEdge), a Texas corporation (the “Company”), pursuant

to a Warrant.)

 

The undersigned Holder of a

Warrant hereby:

 

	

  (i)

  	

  irrevocably

  elects to exercise the Warrant to the extent of purchasing                                   shares of

  common stock of the Company;

  
	

   

  	

   

  
	

  (ii)

  	

  makes

  payment in full of the aggregate Exercise Price for those shares in the

  amount of $                               

  by the delivery of a check or issuance of a wire transfer in the said

  amount;

  
	

   

  	

   

  
	

  (iii)

  	

  requests

  that a certificate for such shares be issued in the name of the undersigned

  or, if the name and address of some other person is specified below, in the

  name of such other person [such person must be a person authorized to be a

  transferee by the terms of the Warrant]:

  

 

	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  (Name and

  address of person other than the

  undersigned in whose name shares are to be

  registered)

  	

   

  

 

	

  (iv)

  	

  requests, if

  the number of shares transferred are not all the shares purchasable pursuant

  to the unexercised portion of the Warrant, that a new Warrant of like tenor

  for the remaining shares purchasable pursuant to the Warrant be issued and

  delivered to the undersigned at the address state below [or in the name of

  the authorized person specified below].

  

 

	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  (Name and

  address of person other than the

  undersigned in whose name new Warrant is to

  be issued)

  	

   

  

 

13

 

	

  Dated:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Signature

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (This

  signature must conform in all respects to the

  name of the Holder as specified on the fact of the

  Warrant)

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Printed Name

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address:

  	

   

  
	

   

  	

   

  	

   

  

 

14

 

IN WITNESS

WHEREOF, the Company has caused this Warrant to be executed by its duly

authorized officer and to be dated April 3, 2000.

 

	

   

  	

  EPICEDGE,

  INC.

  
	

   

  	

  (f/k/a

  Design Automation Systems, Inc.),

  a Texas corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  [ILLEGIBLE]

  	 

	

   

  	

  Its:

  	

   

  

 

15

 

IN WITNESS

WHEREOF, the Company has caused this Warrant to be executed by its duly

authorized officer and to be dated April 3, 2000.

 

	

   

  	

  EPICEDGE,

  INC.

  	 

	

   

  	

  (f/k/a

  Design Automation Systems, Inc.),

  a Texas corporation

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/

  [ILLEGIBLE]

  	 

	

   

  	

  Its:

  	

   

  
				

 

16

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