As filed with the Securities and Exchange Commission on October 18, 1999
Registration No. 333-88319
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
QUERYOBJECT SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
94-3087939
(IRS Employer
Identification Number)
---------------------------
60 Charles Lindbergh Boulevard
Uniondale, New York 11553
(516) 228-8500 (Telephone)
(516) 228-8584 (Telecopier)
(Address, Including Zip Code, and Telephone Number of
Registrant's Principal Executive Offices)
---------------------------
Daniel M. Pess
QueryObject Systems Corporation
60 Charles Lindbergh Boulevard
Uniondale, New York 11553
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(Name, Address, Including Zip Code, and Telephone Number
of Agent for Service)
Copy to:
David J. Adler, Esq.
Kenneth A. Schlesinger, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
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Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. / /
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a) may determine.
The prospectus contained within this Registration Statement also
relates to Common Stock issuable (i) upon the conversion of outstanding shares
of Series A Convertible Preferred Stock and Series B Preferred Stock of the
Company issued in private placements in 1998, (ii) upon the exercise of warrants
and options issued in or in connection with such private placements, and (iii)
upon the exercise of certain other warrants and options. Such shares of Common
Stock were registered previously under cover of a Form S-3 Registration
Statement (Registration No. 333-69101). The filing fees for such securities were
previously paid.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, all of which will be paid by the Registrant, are as
follows:
SEC Registration Fee........................ $ 2,453.63
Accounting Fees and Expenses................ $10,000.00
Legal Fees and Expenses..................... $20,000.00
Blue Sky Fees and Expenses.................. $10,000.00
Miscellaneous Expenses...................... $2,546.37
Total....................................... $45,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the Delaware General Corporation Law ("DGCL"), the
Company's Certificate of Incorporation, as amended, limits the personal
liability of a director or officer to the Company for monetary damages for
breach of fiduciary duty of care as a director. Liability is not eliminated for
(i) any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payment of
dividends or stock purchase or redemptions pursuant to Section 174 of the DGCL,
or (iv) any transaction from which the director derived an improper personal
benefit.
The Company has also entered into indemnification agreements with each
of its directors and executive officers. The indemnification agreements provide
that the directors and executive officers will be indemnified to the fullest
extent permitted by applicable law against all expenses (including attorneys'
fees), judgments, fines and amounts reasonably paid or incurred by them for
settlement in any threatened, pending or completed action, suit or proceeding,
including any derivative action, on account of their services as a director or
officer of the Company or of any subsidiary of the Company or of any other
company or enterprise in which they are serving at the request of the Company.
No indemnification will be provided under the indemnification agreements,
however, to any director or executive officer in certain limited circumstances,
including on account of knowingly fraudulent, deliberately dishonest or willful
misconduct. To the extent the provisions of the indemnification agreements
exceed the indemnification permitted by applicable law, such provision may be
unenforceable or may be limited to the extent they are found by a court of
competent jurisdiction to be contrary to pubic policy.
DELAWARE LAW
The Company is subject to Section 203 of the DGCL, which prevents an
"interested stockholder" (defined in Section 203, generally, as a person owning
15% or more of a corporation's outstanding voting stock) from engaging in a
"business combination" with a publicly-held Delaware corporation for three years
following the date such person became an interested stockholder, unless: (i)
before such person became an interested stockholder, the board of directors of
the corporation approved the transaction in which the interested stockholder
became an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the interested stockholder's
becoming an
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interested stockholder, the interested stockholder owns at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (subject to certain exceptions), or (iii) following the transaction in
which such person became an interested stockholder, the business combination is
approved by the board of directors of the corporation and authorized at a
meeting of stockholders by the affirmative vote of the holders of 66% of the
outstanding voting stock of the corporation not owned by the interested
stockholder. A "business combination" includes mergers, stock or asset sales and
other transactions resulting in a financial benefit to the interested
stockholder.
The provisions of Section 203 of the DGCL could have the effect of
delaying, deferring or preventing a change in the control of the Company.
Item 16. Exhibits.
Exhibit Index
4.5* Form of Warrant issued in connection with the private
placements consummated in October and November 1998
(Incorporated by reference to Exhibit 99-D to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
4.6* Form of Warrant issued in connection with the private
placement consummated in July 1997 (Incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form
SB-2, No. 333-34667).
4.7* Form of Representative's Purchase Option granted to GKN
Securities Corp. (Incorporated by reference to Exhibit 4.2 to
the Company's Registration Statement on Form SB-2, No.
333-34667).
4.8* Form of Purchase Option granted to Southeast Research Partners
in connection with the private placements consummated in
October and November 1998 (Incorporated by reference to
Exhibit 4.8 to the Company's Form S-3, No. 333-69101).
4.9* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series A Convertible Preferred Stock
(Incorporated by reference to Exhibit 99-A to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
4.10* Certificate of Correction to the Certificate of Designations,
Preferences and Other Rights and Qualifications of Series A
Convertible Preferred Stock (Incorporated by reference to
Exhibit 99-B to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1998).
4.11* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series B Convertible Preferred Stock
(Incorporated by reference to Exhibit 99-C to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
II-2
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4.12* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series C Convertible Preferred Stock.
4.13* Form of Warrant issued in connection with the private
placement consummated in June and July of 1999.
4.14* Form of Purchase Option granted to Seaboard Securities, Inc.
in connection with the private placement consummated in June
and July of 1999.
4.15 Form of Purchase Option granted to GKN Securities Corp. in
connection with the private placement consummated in June and
July of 1999.
5 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP with
respect to the securities registered hereunder.
23(a)* Consent of PricewaterhouseCoopers LLP.
23(c) Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP
(included within Exhibit 5).
24(a)* Powers of Attorney (included on the Signature page to the
Registration Statement).
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* previously filed
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange act of
1934) that is incorporated
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<PAGE>
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against each such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and authorizes this Registration
Statement to be signed on its behalf by the undersigned, the City of New York,
State of New York, on the 18th day of October, 1999.
QUERYOBJECT SYSTEMS CORPORATION
(Registrant)
By: /s/ Robert Thompson
---------------------------------
Robert Thompson
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
* Chairman of the Board October 18, 1999
- -----------------------
Alan W. Kaufman
/s/ Robert Thompson President and Chief Executive October 18, 1999
- ----------------------- Officer (Principal Executive Officer)
Robert Thompson
/s/ Daniel M. Pess Executive Vice President, Chief October 18, 1999
- ----------------------- Operating Officer and Chief Financial
Daniel M. Pess Officer (Principal Financial Officer
and Principal Accounting Officer)
* Director October 18, 1999
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Andre Szykier
* Director October 18, 1999
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Rino Bergonzi
* Director October 18, 1999
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Irwin Jacobs
* Director October 18, 1999
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Amy L. Newmark
* /s/ Daniel M. Pess
- --------------------- October 18, 1999
By: Daniel M. Pess,
Attorney-in-Fact
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<PAGE>
Exhibits
Exhibit Index
4.5* Form of Warrant issued in connection with the private
placements consummated in October and November 1998
(Incorporated by reference to Exhibit 99-D to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
4.6* Form of Warrant issued in connection with the private
placement consummated in July 1997 (Incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form
SB-2, No. 333-34667).
4.7* Form of Representative's Purchase Option granted to GKN
Securities Corp. (Incorporated by reference to Exhibit 4.2 to
the Company's Registration Statement on Form SB-2, No.
333-34667).
4.8* Form of Purchase Option granted to Southeast Research Partners
in connection with the private placements consummated in
October and November 1998 (Incorporated by reference to
Exhibit 4.8 to the Company's Amendment No. 1 to Form S-3 filed
February 2, 1999).
4.9* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series A Convertible Preferred Stock
(Incorporated by reference to Exhibit 99-A to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
4.10* Certificate of Correction to the Certificate of Designations,
Preferences and Other Rights and Qualifications of Series A
Convertible Preferred Stock (Incorporated by reference to
Exhibit 99-B to the Company's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 1998).
4.11* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series B Convertible Preferred Stock
(Incorporated by reference to Exhibit 99-C to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998).
4.12* Certificate of Designations, Preferences and Other Rights and
Qualifications of Series C Convertible Preferred Stock.
4.13* Form of Warrant issued in connection with the private
placement consummated in June and July of 1999.
4.14* Form of Purchase Option granted to Seaboard Securities, Inc.
in connection with the private placement consummated in June
and July of 1999.
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<PAGE>
4.15 Form of Purchase Option granted to GKN Securities Corp. in
connection with the private placement consummated in June and
July of 1999.
5 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP with
respect to the securities registered hereunder.
23(a)* Consent of PricewaterhouseCoopers LLP.
23(c) Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP
(included within Exhibit 5).
24(a)* Powers of Attorney (included on the Signature page to the
Registration Statement).
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* Previously filed
II-7
PURCHASE OPTION
For the Purchase of [ ] Shares of Common Stock
of
QueryObject Systems Corporation
(A Delaware Corporation)
1. PURCHASE OPTION.
THIS CERTIFIES THAT, for consideration duly paid by or on behalf of GKN
SECURITIES CORP. ("Holder"), as registered owner of this Purchase Option, to
QueryObject Systems Corporation ("Company"), Holder is entitled, at any time or
from time to time at or after January 1, 2000 and before the close of business
on August 13, 2002 ("Expiration Date"), to subscribe for, purchase and receive,
in whole or in part, up to [ ] Shares of Common Stock of the Company
("Share"). This Purchase Option is issued in connection with the Company's
private offering ("Offering") described in the Confidential Term Sheet dated May
26, 1999, as amended by Supplement dated July 28, 1999 ("Term Sheet"). If the
Expiration Date is a day on which banking institutions are authorized by law to
close, then this Purchase Option may be exercised on the next succeeding day
which is not such a day in accordance with the terms herein. During the period
ending on the Expiration Date, the Company agrees not to take any action that
would terminate the Purchase Option. This Purchase Option is initially
exercisable at $0.8625 per Shares. The term "Exercise Price" shall mean the
initial exercise price or, if adjustments thereto have been made, the adjusted
exercise price.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Shares being purchased in cash or by certified check or official
bank check for the securities being purchased. If the rights represented hereby
shall not be exercised at or before 5:00 p.m., New York City time, on the
Expiration Date, this Purchase Option shall become and be void without further
force or effect, and all rights represented hereby shall cease and expire.
2.2 LEGEND. Unless registered under the Securities Act of 1933, as
amended ("Securities Act"), each certificate for the securities purchased under
this Purchase Option shall bear a legend as follows unless such securities have
been registered under the Securities Act:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Securities Act") or applicable state law. The securities may
not be offered for sale, sold or otherwise transferred except
<PAGE>
pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from registration
under the Securities Act and applicable state law."
3. TRANSFER.
3.1 RESTRICTIONS IMPOSED BY THE ACT. This Purchase Option and the
securities underlying this Purchase Option shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
this Purchase Option or the underlying securities, as the case may be, may be
transferred pursuant to an exemption from registration under the Securities Act
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion of Graubard Mollen & Miller ("GM&M") shall be deemed satisfactory
evidence of the availability of an exemption), or (ii) a registration statement
relating to such securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission")
and compliance with applicable state securities laws.
3.2 ASSIGNMENT. In order to make any permitted assignment, the Holder
must deliver to the Company the assignment form attached hereto duly executed
and completed, together with this Purchase Option and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall immediately
transfer this Purchase Option on the books of the Company and shall execute and
deliver a new Purchase Option or Purchase Options of like tenor to the
appropriate assignee(s) expressly evidencing the right to purchase the aggregate
number of Shares purchasable hereunder or such portion of such number as shall
be contemplated by any such assignment.
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in
Section 3 hereof, this Purchase Option may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon
surrender of this Purchase Option for cancellation, together with the duly
executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of Shares purchasable hereunder as to which this Purchase
Option has not been exercised or assigned.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of the Company.
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<PAGE>
5. REGISTRATION RIGHTS.
5.1 GRANT OF RIGHT. The Company shall register the Shares of Common
Stock underlying this Purchase Option ("Registrable Securities") for re-offer
and resale by the Holders in the registration statement ("Registration
Statement") to be filed by the Company pursuant to the terms of the Subscription
Agreement attached to the Term Sheet. The Company shall keep the Registration
Statement effective and current until all the securities registered thereunder
are sold or may be sold without any limitation under an appropriate exemption
under the Securities Act and the blue sky laws of the States. 1.1
5.2 FEES AND EXPENSES. The Company shall bear all expenses and pay all
fees incurred in connection with the filing and modification or amendment of the
Registration Statement, exclusive of underwriting discounts and commissions
payable in respect of the sale of the Registrable Securities, but including,
without limitation, the fees and expenses of one special counsel, if any, of the
Holders, and of providing reasonable numbers of the prospectus contained therein
to the Holders.
5.3 INDEMNIFICATION BY COMPANY. The Company shall indemnify the
Holder(s) of the Registrable Securities to be sold pursuant to any Registration
Statement hereunder, the officers and directors of each Holder and each person,
if any, who controls such Holders within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act or any state securities law
or regulation, against all loss, claim, damage, expense or liability (including
all reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever incurred by
the indemnified party in any action or proceeding between the indemnitor and
indemnified party or between the indemnified party and any third party or
otherwise) to which any of them may become subject under the Securities Act, the
Exchange Act or any other statute or at common law or otherwise under the laws
of foreign countries, arising from such Registration Statement or based upon any
untrue statement or alleged untrue statement of a material fact contained in (i)
any preliminary prospectus, the Registration Statement or prospectus (as from
time to time each may be amended and supplemented); (ii) any post-effective
amendment or amendments or any new Registration Statement and prospectus in
which is included the Registrable Securities or (iii) any application or other
document or written communication (collectively called "application") executed
by the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Registrable Securities under the securities
laws thereof or filed with the Commission, any state securities commission or
agency, Nasdaq or any securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, unless such statement or omission is made in reliance
upon, and in conformity with, written information furnished to the Company by
and with respect to such registered holders expressly for use in any preliminary
prospectus, the Registration Statement or prospectus, or any amendment or
supplement thereof, or in any application, as the case may be. The Company
agrees promptly to notify such registered holders of the commencement of any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale or resale of the
Registrable Securities or in connection with the Registration Statement or
prospectus.
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<PAGE>
6. ADJUSTMENTS
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The
Exercise Price and the number of Shares of Common Stock underlying this Purchase
Option shall be subject to adjustment from time to time as hereinafter set
forth:
6.1.1 STOCK DIVIDENDS - RECAPITALIZATION, RECLASSIFICATION,
SPLIT-UPS. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding Shares of Common Stock is increased by a
stock dividend on the Common Stock payable in Shares of Common Stock or by a
split-up, recapitalization or reclassification of Shares of Common Stock or
other similar event, then, on the effective date thereof, the number of Shares
of Common Stock issuable on exercise of this Purchase Option shall be increased
in proportion to such increase in outstanding Shares.
6.1.2 Aggregation of Shares. If after the date hereof, and subject
to the provisions of Section 6.3, the number of outstanding Shares of Common
Stock is decreased by a consolidation, combination or reclassification of Shares
of Common Stock or other similar event, then, upon the effective date thereof,
the number of Shares of Common Stock issuable on exercise of this Purchase
Option shall be decreased in proportion to such decrease in outstanding Shares.
6.1.3 ADJUSTMENTS IN EXERCISE PRICE. Whenever the number of Shares
of Common Stock purchasable upon the exercise of this Purchase Option is
adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
Shares of Common Stock purchasable upon the exercise of this Purchase Option
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of Shares of Common Stock so purchasable immediately thereafter.
6.1.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case
of any reclassification or reorganization of the outstanding Shares of Common
Stock other than a change covered by Section 6.1.1 hereof or which solely
affects the par value of such Shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization
of the outstanding Shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of Shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or
4
<PAGE>
consolidation, or upon a dissolution following any such sale or other transfer,
by a Holder of the number of Shares of Common Stock of the Company obtainable
upon exercise of this Purchase Option immediately prior to such event; and if
any reclassification also results in a change in Shares of Common Stock covered
by Sections 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to
Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this
Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.5 CHANGES IN FORM OF PURCHASE OPTION. This form of Purchase
Option need not be changed because of any change pursuant to this Section, and
Purchase Options issued after such change may state the same Exercise Price and
the same number of Shares of Common Stock and Purchase Options as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to a prior adjustment
or the computation thereof.
6.2 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of Shares of Common Stock
upon the exercise of this Purchase Option, nor shall it be required to issue
scrip or pay cash in lieu of any fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Shares of Common Stock or other
securities, properties or rights.
7. RESERVATION. The Company shall at all times reserve and keep available
out of its authorized capital, such number of Shares of Common Stock or other
securities, properties or rights required for the issuance of the Shares and
securities underlying the Shares. The Company covenants and agrees that, upon
exercise of this Purchase Option and payment of any exercise price therefor, all
Series B Shares issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any
stockholder.
8. CERTAIN NOTICE REQUIREMENTS.
8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Option and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be.
5
<PAGE>
8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its Shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution, or (ii)
the Company shall offer to all the holders of its Common Stock any additional
Shares of capital stock of the Company or securities convertible into or
exchangeable for Shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a merger or reorganization in which the
Company is not the surviving party, or (iv) a dissolution, liquidation or
winding up of the Company (other than in connection with a consolidation or
merger) or a sale of all or substantially all of its property, assets and
business shall be proposed.
8.3 NOTICE OF CHANGE. If any event occurs which would require a notice
to be sent to holder of Series C Convertible Preferred Stock sold pursuant to
the Term Sheet during the time this Purchase Option is outstanding, the Company
shall also send such notice to the Holder(s) hereof.
8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier, with acknowledgment of receipt to the party to which
notice is given, by confirmed facsimile, or on the fifth day after mailing if
mailed to the party to whom notice is to be given, by registered or certified
mail, return receipt requested, postage prepaid and properly addressed as
follows: (i) if to the registered Holder of this Purchase Option, to the address
of such Holder as shown on the books of the Company, or (ii) if to the Company,
to its principal executive office.
9. MISCELLANEOUS.
9.1 AMENDMENTS. All modifications or amendments hereto shall require
the written consent of the party against whom enforcement of the modification or
amendment is sought.
9.2 Intentionally Omitted
9.3 HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.
9.4 ENTIRE AGREEMENT. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.5 BINDING EFFECT. This Purchase Option shall inure solely to the
benefit of
6
<PAGE>
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Purchase Option or any provisions herein
contained.
9.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The Company agrees
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys' fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.
9.7 WAIVER, ETC. The failure of the Company or the Holder at any time
to enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder thereafter to enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
9.8 EXECUTION IN COUNTERPARTS. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the 13th day of August, 1999.
QUERYOBJECT SYSTEMS CORPORATION
By:_____________________________________________
Name: Daniel M. Pess
Title: Executive Vice President and Chief
Financial Officer
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<PAGE>
Form to be used to exercise Purchase Option:
QueryObject Systems Corporation
60 Charles Lindbergh Boulevard
Uniondale, New York 11903
Attention:
Date:
The undersigned hereby elects irrevocably to exercise the within
Purchase Option and to purchase _______ Shares of Common Stock of QueryObject
Systems Corporation and hereby makes payment of $____________ (at the rate of
$_________ per Shares) in payment of the Exercise Price pursuant thereto. Please
issue the securities underlying this Purchase Option in accordance with the
instructions given below.
Signature
NOTICE: The signature to this form must correspond with the name as
written upon the face of the within Purchase Option in every particular without
alteration or enlargement or any change whatsoever.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
(Print in Block Letters)
Address
8
<PAGE>
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED,
does hereby sell, assign and transfer unto _____________________________________
the right to purchase _____________ Shares of Common Stock of QueryObject
Systems Corporation ("Company") evidenced by the within Purchase Option and does
hereby authorize the Company to transfer such right on the books of the Company.
Dated:
Signature
NOTICE: The signature to this form must correspond with the name as
written upon the face of the within Purchase Option in every particular without
alteration or enlargement or any change whatsoever.
9
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
October 18, 1999
212-451-2252
[email protected]
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: QueryObject Systems Corporation
Commission File No. 333-88319
Registration Statement on Form S-3
Gentlemen:
Reference is made to the Registration Statement on Form S-3 dated
October 1, 1999, as amended, (the "Registration Statement"), filed with the
Securities and Exchange Commission by QueryObject Systems Corporation, a
Delaware corporation (the "Company"). The Registration Statement relates to the
resale of an aggregate of 10,157,400 shares (the "Shares") of the Company's
Common Stock, $.001 par value (the "Common Stock") issuable upon exercise of
outstanding warrants or options or conversion of preferred stock.
We advise you that we have examined original or copies certified or
otherwise identified to our satisfaction of the Certificate of Incorporation and
By-laws of the Company, minutes of meetings of the Board of Directors and
stockholders of the Company, the Registration Statement, and such other
documents, instruments and certificates of officers and representatives of the
Company and public officials, and we have made such examination of the law as we
have deemed appropriate as the basis for the opinion hereinafter expressed. In
making such examination, we have assumed the genuineness of all signatures, the
authenticity of all
<PAGE>
October 18, 1999
Page 2
documents submitted to us as originals, and the conformity to original documents
of documents submitted to us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that:
The Shares have been duly authorized and reserved for and when issued
in accordance with the terms of the warrants, options or preferred stock will be
legally paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and we further consent to the reference to this firm
under the caption "Legal Matters" in the Registration Statement and the
Prospectus forming a part thereof. We advise you that a member of this firm
holds securities which are exercisable into Shares.
Very truly yours,
/s/ OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
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OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
