Exhibit B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY
NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR
UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
Dated: ___________, 1999
to Purchase _________ Shares of Common Stock of
BASE TEN SYSTEMS, INC.
BASE TEN SYSTEMS, INC., a New Jersey corporation (the "Company"),
hereby certifies that _______________, its permissible transferees, designees,
successors and assigns (collectively, the "Holder"), for value received, is
entitled to purchase from the Company at any time commencing on __________, 1999
and terminating on __________, [2003 as to Additional Warrants; December 15,
2001 as to Amended Warrants] up to _________________________(_________) shares
(each a "Share" and collectively the "Shares") of the Company's common stock
(the "Common Stock"), at an exercise price of $3.00 per Share (the "Exercise
Price"). The number of Shares purchasable hereunder and the Exercise Price are
subject to adjustment as provided in Section 4 hereof.
1. Exercise of Warrants.
(a) Upon presentation and surrender of this Common Stock
Purchase Warrant Certificate ("Warrant Certificate" or "Certificate"), or Lost
Certificate Affidavit, accompanied by a completed Election to Purchase in the
form attached hereto as Exhibit A (the "Election to Purchase") duly executed, at
the principal office of the Company at One Electronics Drive, Trenton, NJ 08619,
Attn: Mr. Thomas E. Gardner, together with a check payable to the Company in the
amount of the Exercise Price multiplied by the number of Shares being purchased,
the Company or the Company's Transfer Agent as the case may be, shall, within
two (2) trading days of receipt of the foregoing, deliver to the Holder hereof,
certificates of fully paid and non-assessable Common Stock which in the
aggregate represent the number of Shares being purchased; provided, however,
that the Holder may elect, with the written consent of the Company which may be
granted or withheld in the Company's sole discretion (except that such consent
will not be required if (i) the prospectus included in an effective registration
statement covering resale of the Shares includes an untrue statement of material
fact or omits to state a material fact required to be stated therein or
necessary to make the statement therein, in light of the circumstances under
which they were made, not misleading, or (ii) resales of the Shares cannot be
made pursuant to an effective registration statement in compliance with the
securities laws for any other reason), to utilize the cashless exercise
provisions set forth below in lieu of tendering the Exercise Price in cash. The
certificates so delivered shall be in such denominations as may be reasonably
requested by the Holder and shall be registered in the name of the Holder or
such other name as shall be designated by the Holder. All or less than all of
the Warrants represented by this Certificate may be exercised and, in case of
the exercise of less than all, the Company, upon surrender hereof, will at the
Company's expense deliver to the Holder a new Warrant Certificate or
Certificates (in such denominations as may be requested by the Holder) of like
tenor and dated the date hereof entitling said holder to purchase the number of
Shares represented by this Certificate which have not been exercised and to
receive Registration Rights with respect to such Shares, and all other rights
with respect to the shares which the Holder has on the date hereof.
(b) Cashless Exercise. Notwithstanding the foregoing provision
regarding payment of the Exercise Price in cash, the Holder may elect, subject
to the provisions of Section 1(a), to receive a reduced number of Shares in lieu
of tendering the Exercise Price in cash. In such case, the number of Shares to
be issued to the Holder shall be computed using the following formula:
X = Y(A-B)
------
A
where: X = the number of Shares to be issued to the Holder;
Y = the number of Shares to be exercised under this Warrant Certificate;
A = the Market Value (defined below) of one share of Common Stock; and
B = the Exercise Price.
(c) Mandatory Exercise. The Company shall be entitled on any
day occurring on and after [the first anniversary of the closing date] on which
the closing bid price of the Common Stock on each trading day during the twenty
(20) consecutive trading day period ending on the trading day immediately
preceding such date (such twenty (20) consecutive trading day period being
referred to herein as the "Calculation Period") is equal to or greater than
$4.00 per share (the "Trigger Price"), to deliver a written notice to the Holder
requiring such Holder to exercise all of the Warrants represented by this
Certificate on the date which is ten (10) trading days following the date of
such notice (the "Exercise Date"); provided, however, that the Company shall
have such right if, and only if, (x) for a period of thirty (30) consecutive
trading days prior to the beginning of such Calculation Period and (y) at all
times during such Calculation Period and continuing through the Exercise Date,
the Shares are (1) authorized and reserved for issuance, (2) listed for trading
on each principal exchange or market on which the shares of Common Stock were
then traded, and (3) registered for resale pursuant to an effective registration
statement under the Securities Act; provided, further, however, that the Holder
shall not be required to exercise the Warrants represented by this Certificate
with respect to any such notice unless the closing bid price of the Common Stock
on the trading day immediately preceding the Exercise Date is at least equal to
$3.90 (the "Threshold Price") and the aggregate of cash (and cash equivalents)
as shown on the most recent balance sheet of the Company filed by the Company
with the Securities and Exchange Commission pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") is less than
$5,000,000.
As used in this Section 1, "Market Value" refers to the Current Market Value of
the Common Stock on the day before the Election to Purchase and this Warrant
Certificate are duly surrendered to the Company for a full or partial exercise
hereof.
2. Exchange, Transfer and Replacement. (a) At any time prior to the
exercise hereof, this Certificate may be exchanged upon presentation and
surrender to the Company, alone or with other Certificates of like tenor of
different denominations registered in the name of the same Holder, for another
Certificate or Certificates of like tenor in the name of such Holder exercisable
for the aggregate number of Shares as the Certificate or Certificates
surrendered.
(b) Replacement of Warrant Certificate. Upon receipt of
evidence reasonably 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 reasonably
satisfactory in form and amount to the Company (collectively, a "Lost
Certificate Affidavit"), 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.
(c) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant Certificate in connection with any transfer, exchange or
replacement as provided in this Section 2, this Warrant Certificate shall be
promptly canceled by the Company. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal expenses, if
any, incurred by the Holder or transferees) and charges payable in connection
with the preparation, execution and delivery of Warrant Certificates pursuant to
this Section 2.
(d) Warrant Register. The Company shall maintain, at its
principal executive offices (or at the offices of the transfer agent for the
Warrant Certificate or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant
Certificate (the "Warrant Register"), in which the Company shall record the name
and address of the person in whose name this Warrant Certificate has been
issued, as well as the name and address of each permitted transferee and each
prior owner of this Warrant Certificate.
3. Rights and Obligations of Holders of this Certificate. The Holder of
this 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 any certificate representing shares of Common Stock or other
securities is issued to the holder hereof upon exercise of some or all of the
Warrants, such holder shall, for all purposes, be deemed to have become the
holder of record of such Common Stock on the date on which this Certificate,
together with a duly executed Purchase Form, was surrendered and payment of the
aggregate Exercise Price was made, irrespective of the date of delivery of such
share certificate.
4. Adjustments.
(a) Stock Dividends, Reclassifications, Recapitalizations,
Etc. In the event the Company: (i) pays a dividend in Common Stock or makes a
distribution in Common Stock, (ii) subdivides its outstanding Common Stock into
a greater number of shares, (iii) combines its outstanding Common Stock into a
smaller number of shares or (iv) increases or decreases the number of shares of
Common Stock outstanding by reclassification of its Common Stock (including a
recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (1) the Exercise Price, the Trigger
Price and the Threshold Price on the record date of such division or
distribution or the effective date of such action shall be adjusted by
multiplying such Exercise Price, Trigger Price and Threshold Price, as
applicable, by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately before such event and the denominator of
which is the number of shares of Common Stock outstanding immediately after such
event, and (2) the number of shares of Common Stock for which this Warrant
Certificate may be exercised immediately before such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the Exercise
Price, the Trigger Price or the Threshold Price, as applicable, immediately
before such event and the denominator of which is the Exercise Price, the
Trigger Price or the Threshold Price, as applicable, immediately after such
event.
(b) Cash Dividends and Other Distributions. In the event that
at any time or from time to time the Company shall distribute to all holders of
Common Stock (i) any dividend or other distribution of cash, evidences of its
indebtedness, shares of its capital stock or any other properties or securities
or (ii) any options, warrants or other rights to subscribe for or purchase any
of the foregoing (other than in each case, (w) the issuance of any rights under
a shareholder rights plan, (x) any dividend or distribution described in Section
4(a), (y) any rights, options, warrants or securities described in Section 4(c)
and (z) any cash dividends or other cash distributions from current earnings),
then the number of shares of Common Stock issuable upon the exercise of each
Warrant Certificate shall be increased to a number determined by multiplying the
number of shares of Common Stock issuable upon the exercise of such Warrant
Certificate immediately prior to the record date for any such dividend or
distribution by a fraction, the numerator of which shall be such Current Market
Value (as hereinafter defined) per share of Common Stock on the record date for
such dividend or distribution, and the denominator of which shall be such
Current Market Value per share of Common Stock on the record date for such
dividend or distribution less the sum of (x) the amount of cash, if any,
distributed per share of Common Stock and (y) the fair value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be evidenced by a board resolution, a copy of which will be sent to the Holders
upon request) of the portion, if any, of the distribution applicable to one
share of Common Stock consisting of evidences of indebtedness, shares of stock,
securities, other property, warrants, options or subscription or purchase
rights; and the Exercise Price shall be adjusted to a number determined by
dividing the Exercise Price immediately prior to such record date by the above
fraction. Such adjustments shall be made whenever any distribution is made and
shall become effective as of the date of distribution, retroactive to the record
date for any such distribution. No adjustment shall be made pursuant to this
Section 4(b) which shall have the effect of decreasing the number of shares of
Common Stock issuable upon exercise of each Warrant Certificate or increasing
the Exercise Price.
(c) Rights Issue. In the event that at any time or from time
to time the Company shall issue rights, options or warrants entitling the
holders thereof to subscribe for shares of Common Stock, or securities
convertible into or exchangeable or exercisable for Common Stock to all holders
of Common Stock (other than in connection with the adoption of a shareholder
rights plan by the Company) without any charge, entitling such holders to
subscribe for or purchase shares of Common Stock at a price per share that as of
the record date for such issuance is less than the then Current Market Value per
share of Common Stock, the number of shares of Common Stock issuable upon the
exercise of each Warrant Certificate shall be increased to a number determined
by multiplying the number of shares of Common Stock theretofore issuable upon
exercise of each Warrant Certificate by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights, options, warrant or securities plus the number of additional shares
of Common Stock offered for subscription or purchase or into or for which such
securities that are issued are convertible, exchangeable or exercisable, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights, option, warrants or securities plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the Company (assuming the exercise or conversion of
all such rights, options, warrants or securities) would purchase at the then
Current Market Value per share of Common Stock. In the event of any such
adjustment, the Exercise Price shall be adjusted to a number determined by
dividing the Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustment shall be made immediately after such
rights, options or warrants are issued and shall become effective, retroactive
to the record date for the determination of stockholders entitled to receive
such rights, options, warrants or securities. No adjustment shall be made
pursuant to this Section 4(c) which shall have the effect of decreasing the
number of shares of Common Stock purchasable upon exercise or each Warrant
Certificate or of increasing the Exercise Price.
(d) Combination: Liquidation. (i) Except as provided in
Section 4(d)(ii) below, in the event of a Combination (as defined below), each
Holder shall have the right to receive upon exercise of the Warrant Certificates
the kind and amount of shares of capital stock or other securities or property
which such Holder would have been entitled to receive upon or as a result of
such Combination had such Warrant Certificate been exercised immediately prior
to such event (subject to further adjustment in accordance with the terms
hereof). Unless paragraph (ii) is applicable to a Combination, the Company shall
provide that the surviving or acquiring Person (the "Successor Company") in such
Combination will assume by written instrument the obligations under this Section
4 and the obligations to deliver to the Holder such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Holder may be
entitled to acquire. The provisions of this Section 4(d)(i) shall similarly
apply to successive Combinations involving any Successor Company. "Combination"
means an event in which the Company consolidates with, mergers with or into, or
sells all or substantially all of its assets to another Person, where "Person"
means any individual, corporation, partnership, joint venture, limited liability
company, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity,
but shall not include the sale of substantially all of the assets of the
Government Technology Division of the Company.
(ii) In the event of (x) a Combination where consideration to
the holders of Common Stock in exchange for their shares is payable solely in
cash or (y) the dissolution, liquidation or winding-up of the Company, the
Holders shall be entitled to receive, upon surrender of their Warrant
Certificates, distributions on an equal basis with the holders of Common Stock
or other securities issuable upon exercise of the Warrant Certificates, as if
the Warrant Certificates had been exercised immediately prior to such event,
less the Exercise Price. In case of any Combination described in this Section
4(d)(ii), the surviving or acquiring Person and, in the event of any
dissolution, liquidation or winding-up of the Company, the Company, shall
deposit promptly following the consummation of such combination or at the time
of such dissolution, liquidation or winding-up with an agent or trustee for the
benefit of the Holders of the funds, if any, necessary to pay to the Holders the
amounts to which they are entitled as described above. After such funds and the
surrendered Warrant Certificates are received, the Company is required to
deliver a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate) to
such Person or Persons as it may be directed in writing by the Holders
surrendering such Warrant Certificates.
(e) Notice of Adjustment. Whenever the Exercise Price, the
Trigger Price or the Threshold Price, or the number of shares of Common Stock
and other property, if any, issuable upon exercise of the Warrant Certificates
is adjusted, as herein provided, the Company shall deliver to the holders of the
Warrant Certificates in accordance with Section 10 a certificate of the
Company's Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated
(including a description of the basis on which (i) the Board of Directors
determined the fair value of any evidences of indebtedness, other securities or
property or warrants, options or other subscription or purchase rights and (ii)
the Current Market Value of the Common Stock was determined, if either of such
determinations were required), and specifying the Exercise Price, the Trigger
Price and the Threshold Price, as applicable, and number of shares of Common
Stock issuable upon exercise of Warrant Certificates after giving effect to such
adjustment.
(f) Purchase Price Adjustment. In the event that the Company
issues or sells any Common Stock or securities which are convertible into or
exchangeable for its Common Stock or any convertible securities, or any warrants
or other rights to subscribe for or to purchase or any options for the purchase
of its Common Stock or any such convertible securities (other than shares or
options issued or which may be issued pursuant to the Company's employee or
director option plans or shares issued upon exercise of options, warrants or
rights outstanding on the date of the Agreement and listed in the Company's most
recent periodic report filed under the Exchange Act or disclosed in Schedule 3.3
to the Purchase Agreement) and other than the Second Closing (as defined in the
Purchase Agreement) at an effective purchase price per share which is less than
the Current Market Value of the Common Stock on the trading day next preceding
such issue or sale, then in each such case, the Exercise Price in effect
immediately prior to such issue or sale shall be reduced effective concurrently
with such issue or sale to an amount determined by multiplying the Exercise
Price then in effect by a fraction, (x) the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding immediately prior to
such issue or sale, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such additional shares would
purchase at such Current Market Value then in effect; and (y) the denominator of
which shall be the number of shares of Common Stock of the Company outstanding
immediately after such issue or sale.
For the purposes of the foregoing adjustment, in the case of the issuance of any
convertible securities, warrants, options or other rights to subscribe for or to
purchase or exchange for, shares of Common Stock ("Convertible Securities"), the
maximum number of shares of Common Stock issuable upon exercise, exchange or
conversion of such Convertible Securities shall be deemed to be outstanding,
provided that no further adjustment shall be made upon the actual issuance of
Common Stock upon exercise, exchange or conversion of such Convertible
Securities.
The number of shares which may be purchased hereunder shall be increased
proportionately to any reduction in Exercise Price pursuant to this paragraph
4(d), so that after such adjustments the aggregate Exercise Price payable
hereunder for the increased number of shares shall be the same as the aggregate
Exercise Price in effect just prior to such adjustment.
In the event of any such issuance for a consideration which is less than such
fair market value and also less than the Exercise Price then in effect, than
there shall be only one such adjustment by reason of such issuance, such
adjustment to be that which results in the greatest reduction of the Purchase
Price computed as aforesaid.
(g) Notice of Certain Transactions. In the event that the
Company shall propose (a) to pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) to offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) to effect any capital reorganization,
reclassification, consolidation or merger affecting the class of Common Stock,
as a whole, or (d) to effect the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, the Company shall, within the time
limits specified below, send to each Holder a notice of such proposed action or
offer. Such notice shall be mailed to the Holders at their addresses as they
appear in the Warrant Register (as defined in Section 2(d)), which shall specify
the record date for the purposes of such dividend, distribution or rights, or
the date such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
shall briefly indicate the effect of such action on the number of shares of
Common Stock and on the number and kind of any other shares of stock and on
other property, if any, and the number of shares of Common Stock and other
property, if any, issuable upon exercise of each Warrant Certificate and the
Exercise Price after giving effect to any adjustment pursuant to Section 4 which
will be required as a result of such action. Such notice shall be given as
promptly as possible and (x) in the case of any action covered by clause (a) or
(b) above, at least 10 days prior to the record date for determining holders of
the Common Stock for purposes of such action or (y) in the case of any other
such action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common Stock,
whichever shall be the earlier.
(h) Current Market Value. "Current Market Value" per share of
Common Stock or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the value of the security, determined in
good faith by the Board of Directors of the Company and certified in a board
resolution, based on the most recently completed arm's-length transaction
between the Company and a Person other than an affiliate of the Company or
between any two such Persons and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such date, or (b) if
no such transaction shall have occurred within the six-month period, the value
of the security as determined by an independent financial expert or (ii) if the
security is registered under the Exchange Act, the average of the daily closing
bid prices (or the equivalent in an over-the-counter market) for each day on
which the Common Stock is traded for any period on the principal securities
exchange or other securities market on which the Common Stock is being traded
(each, a "Trading Day") during the period commencing ten (10) Trading Days
before such date and ending on the date one day prior to such date, or if the
security has been registered under the Exchange Act for less than ten (10)
consecutive Trading Days before such date, the average of the daily closing bid
prices (or such equivalent) for all of the Trading Days before such date for
which daily closing bid prices are available; provided, however that if the
closing bid price is not determinable for at least five (5) Trading Days in such
period, the "Current Market Value" of the security shall be determined as if the
security were not registered under the Exchange Act.
(i) Other Adjustments. If the event of any other transaction
of the type contemplated by this Section 4, but not expressly provided for by
the provisions hereof, the Board of Directors of the Company will make
appropriate adjustment in the Exercise Price, the Trigger Price and the
Threshold Price so as to equitably protect the rights of the Holder.
(j) No Impairment of Holder's Rights. The Company will not, by
amendment of its certificate of incorporation or bylaws or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, except as contemplated hereby,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant Certificate, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all action as may be necessary or
appropriate in order to protect the rights of the Holder against dilution or
other impairment. Without limiting the generality of the foregoing, the Company
will not increase the par value of any shares of Common Stock receivable upon
exercise of this Warrant above the Exercise Price then in effect.
5. Company's Representations. The representations, warranties and
agreements of the Company contained in Sections 3 and 4 of the Securities
Purchase Agreement dated December 4, 1997 ("Purchase Agreement") among the
Company, the initial Holder and the other parties thereto are incorporated by
reference herein. The representations, warranties and agreements of the Company
contained in Sections 3 and 4 of the Exchange Agreement dated ___________
("Exchange Agreement") among the Company, the initial Holder and the other
parties thereto are incorporated by reference herein.
6. Registration Rights. The initial Holder is entitled to the benefit
of such registration rights in respect of the Shares as are set forth in the
Registration Rights Agreement dated as of December 4, 1997 by and between the
Company, the Holder and the other parties thereto, including the right to assign
such rights to certain assignees as set forth therein. The initial Holder is
entitled to the benefit of such registration rights in respect of the Shares as
are set forth in Section 5 of the Exchange Agreement.
7. Issuance of Certificates. Within two (2) trading days of receipt of
a duly completed Election to Purchase form, together with this Certificate and
payment of the Exercise Price, the Company, at its expense, will cause to be
issued in the name of and delivered to the Holder of this Warrant, a certificate
or certificates for the number of fully paid and non-assessable shares of Common
Stock to which that holder shall be entitled on such exercise. In the event the
shares of Common Stock are not timely delivered to the Holder, the Company
agrees to (a) indemnify Holder for all damages, including consequential and
special damages, lost profits and expenses, including legal fees, and (b)
beginning on the fifth (5th) day following the Company's receipt of a duly
completed Election to Purchase form, pay a default premium of 2% per day of the
value of underlying shares (based on the highest closing price during the two
(2) day period preceding the date of surrender of the Warrant Certificate). In
lieu of issuance of a fractional share upon any exercise hereunder, the Company
will pay the cash value of that fractional share, calculated on the basis of the
Exercise Price. Prior to registration of the resale of the shares of Common
Stock underlying this Warrant Certificate, all such certificates shall bear a
restrictive legend to the effect that the Shares represented by such certificate
have not been registered under the Securities Act, and that the Shares may not
be sold or transferred in the absence of such registration or an exemption
therefrom, such legend to be substantially in the form of the bold-face language
appearing at the top of Page 1 of this Warrant Certificate.
8. Disposition of Warrants or Shares. The Holder of this Warrant
Certificate, each transferee hereof and any holder and transferee of any Shares,
by his or its acceptance thereof, agrees that no public distribution of Warrants
or Shares will be made in violation of the provisions of the Securities Act.
Furthermore, it shall be a condition to the transfer of the Warrants that any
transferee thereof deliver to the Company his or its written agreement to accept
and be bound by all of the relevant terms and conditions contained in this
Warrant Certificate.
9. Merger or Consolidation. The Company will not merge or consolidate
with or into any other corporation, or sell or otherwise transfer its property,
assets and business substantially as an entirety to another corporation, unless
the corporation resulting from such merger or consolidation (if not the
Company), or such transferee corporation, as the case may be, shall expressly
assume, by supplemental agreement reasonably satisfactory in form and substance
to the Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant Certificate to be performed and observed
by the Company.
10. Notices. Except as otherwise specified herein to the contrary, all
notices, requests, demands and other communications required or desired to be
given hereunder shall only be effective if given in writing by certified or
registered U.S. mail with return receipt requested and postage prepaid; by
private overnight delivery service (e.g. Federal Express); by facsimile
transmission (if no original documents or instruments must accompany the
notice); or by personal delivery. Any such notice shall be deemed to have been
given (a) on the business day immediately following the mailing thereof, if
mailed by certified or registered U.S. mail as specified above; (b) on the
business day immediately following deposit with a private overnight delivery
service if sent by said service; (c) upon receipt of confirmation of
transmission if sent by facsimile transmission; or (d) upon personal delivery of
the notice. All such notices shall be sent to the following addresses (or to
such other address or addresses as a party may have advised the other in the
manner provided in this Section 10):
If to the Company:
Base Ten Systems, Inc.
One Electronics Drive
Trenton, NJ 08619
Telephone: (609) 586-7010
Telecopy: (609) 586-1593
Attention: Mr. Thomas E. Gardner
with a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
P.O. Box 1945
Morristown, New Jersey 07962-1945
Telephone: (973) 966-6300
Telecopy: (973) 966-1550
Attention: Joseph Lunin
If to _______________:
___________________
___________________
Telephone: (___) __________
Telecopy: (___) ___________
Attention: ________________
in each case with a copy to:
Shoreline Pacific Institutional Finance
3 Harbor Drive, Suite 211
Sausalito, CA 94965
Telephone: (415) 332-7800
Telecopy: (415) 332-7808
Attention: General Counsel
and:
Cowen & Co.
1 Financial Square
New York, NY 10005
Telephone: (212) 495-3950
Telecopy: (212) 495-8305
Attention: Mr. Bill Smith
Notwithstanding the time of effectiveness of notices set forth in this Section,
an Election to Purchase shall not be deemed effectively given until it has been
duly completed and submitted to the Company together with the original Warrant
Certificate to be exercised and payment of the Exercise Price in a manner set
forth in this Section.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the Company's jurisdiction of incorporation (in
respect of matters of corporation law) and the laws of the State of New York (in
respect of all other matters) applicable to contracts made and to be performed
in the State of New York. The parties hereto irrevocably consent to the
jurisdiction of the United States federal courts and state courts located in the
Borough of Manhattan in the State of New York in any suit or proceeding based on
or arising under this Agreement or the transactions contemplated hereby and
irrevocably agree that all claims in respect of such suit or proceeding may be
determined in such courts. The Company and the Holder irrevocably waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding
in such forum. The Company and the Holder further agree that service of process
upon the Company or the Holder, as applicable, mailed by the first class mail in
accordance with Section 10 shall be deemed in every respect effective service of
process upon the Company or the Holder in any suit or proceeding arising
hereunder. Nothing herein shall affect the Holder's right to serve process in
any other manner permitted by law. The parties hereto agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner. The parties hereto irrevocably waive any right to trial by jury
under applicable law.
12. Limitations on Holdings. The Warrant shall not be exercisable by a
Holder to the extent (but only to the extent) that, if exercised by such Holder,
the Holder would beneficially own in excess of 4.9% (the "Applicable
Percentage") of the shares of Common Stock. To the extent the foregoing
limitation applies, the determination of whether this Warrant Certificate shall
be exercisable (vis-a-vis other securities owned by such Holder) shall be in the
sole discretion of the Holder and submission of an Election to Purchase shall be
deemed to be the Holder's determination of whether the Warrant Certificate is
exercisable in whole or in part, subject to such aggregate percentage
limitation. No prior inability to exercise the Warrant Certificate pursuant to
this Section shall have any effect on the applicability of the provisions of
this Section with respect to any subsequent determination of ability to
exercise. For the purposes of this Section, beneficial ownership and all
calculations, including without limitation, with respect to calculations of
percentage ownership shall be determined in accordance with Section 13(d) of the
Exchange Act, and Regulation 13D-G thereunder. The provisions of this Section
may be amended and/or implemented in a manner otherwise than in strict
conformity with the terms of this Section with the approval of the Board of
Directors of the Company and the affected Holder: (i) to cure any ambiguity
herein, to correct this subsection (or any portion thereof) which may be
defective or inconsistent with the intended Applicable Percentage beneficial
ownership limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such Applicable Percentage
limitation; and (ii) with respect to any other matter, with the further consent
of the holders of majority of the then outstanding shares of Common Stock; the
provisions of this Section may be waived with the approval of the affected
Holder upon ninety (90) days prior written notice from such Holder to the
Company. The limitations contained in this Section shall apply to a successor
Holder of this Warrant if, and to the extent, elected by such successor Holder
concurrently with its acquisition of this Warrant, such election to be promptly
confirmed in writing to the Company (provided no transfer or series of transfers
to a successor Holder or Holders shall be used by a Holder to evade the
limitations contained herein).
13. Successors and Assigns. This Warrant Certificate shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
14. Headings. The headings of various sections of this Warrant
Certificate have been inserted for reference only and shall not affect the
meaning or construction of any of the provisions hereof.
15. Severability. If any provision of this Warrant Certificate is held
to be unenforceable under applicable law, such provision shall be excluded from
this Warrant Certificate, and the balance hereof shall be interpreted as if such
provision were so excluded.
16. Modification and Waiver. This Warrant Certificate and any provision
hereof may be amended, waived, discharged or terminated only by an instrument in
writing signed by the Company and the Holder.
17. Specific Enforcement. The Company and the Holder acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Warrant Certificate were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Warrant Certificate and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which either of them may be entitled by law or equity.
18. Assignment. This Warrant Certificate may be transferred or
assigned, in whole or in part, at any time and from time to time by the then
Holder by submitting this Warrant to the Company together with a duly executed
Assignment in substantially the form and substance of the Form of Assignment
which accompanies this Warrant Certificate and, upon the Company's receipt
hereof, and in any event, within three (3) business days thereafter, the Company
shall issue a Warrant Certificate to the Holder to evidence that portion of this
Warrant Certificate, if any as shall not have been so transferred or assigned.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or by facsimile, by one of its officers thereunto
duly authorized.
BASE TEN SYSTEMS, INC.
Date: By:------------------------------
Name:
Title:
ELECTION TO PURCHASE
To Be Executed by the Holder
in Order to Exercise the Common Stock
Purchase Warrant Certificate
The undersigned Holder hereby elects to exercise _______ of the
Warrants represented by the attached Common Stock Purchase Warrant Certificate,
and to purchase the shares of Common Stock issuable upon the exercise of such
Warrants, and requests that certificates for securities be issued in the name
of:
---------------------------------------------
(Please type or print name and address)
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
(Social Security or Tax Identification Number)
and delivered to:---------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please type or print name and address if different from above)
If such number of Warrants being exercised hereby shall not be all the Warrants
evidenced by the attached Common Stock Purchase Warrant Certificate, a new
Common Stock Purchase Warrant Certificate for the balance of such Warrants shall
be registered in the name of, and delivered to, the Holder at the address set
forth below.
[In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$______________ by check, money order or wire transfer payable in United States
currency to the order of BASE TEN SYSTEMS, INC.] or [The undersigned elects
cashless exercise in accordance with Sections 1(a) and 1(b) of the Common Stock
Purchase Warrant Certificate.]
HOLDER:
Dated: By:-------------------------------------
Name:
Title:
Address:
AGREED TO BY BASE TEN SYSTEMS, INC.
- ---------------------------------------
By: Name:
Title:
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
_______________ the right represented by the within Warrant to purchase
____________ shares of Common Stock of BASE TEN SYSTEMS, INC., a New Jersey
corporation, to which the within Warrant relates, and appoints _____________
Attorney to transfer such right on the books of BASE TEN SYSTEMS, INC., a New
Jersey corporation, with full power of substitution of premises.
Dated: By:------------------------------------------
Name:
Title:
(signature must conform to
name of holder as specified on
the fact of the Warrant)
Address:
Signed in the presence of: