SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): AUGUST 19, 1997
STARBASE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-25612 33-0567363
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Indentification No.)
18872 MACARTHUR BOULEVARD, SUITE 300
IRVINE, CALIFORNIA 92612
(Address of Principal Executive Offices) (Zip Code)
(714) 442-4400
(Registrant's telephone number, including area code)
This Current Report on Form 8-K is filed by StarBase Corporation, a
Delaware corporation (the "Company"), in connection with the matters described
herein.
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ITEM 5. OTHER EVENTS
On August 19, 1997, the Company announced the closing of the first of
two tranches of a private placement offering of its 6% Convertible Debentures
with an institutional investor. The two tranches will total $3,000,000, with the
first trache totaling $1,500,000. In addition to the Debentures, the purchaser
will receive non-transferable warrants to purchase 40,000 shares of the
Company's Common Stock per tranche, with the warrants from the first
tranche being exercisable at $1.58 per share through August 18, 2000.
In addition, the Company announced the completion of a previously
announced warrant exchange offer whereby each holder received one share of
common stock for every three warrants tendered. In the aggregate, 4,743,534 were
tendered and 1,581,150 common shares were issued.
On September 9, 1997, the Company announced the closing of a private
placement offering of its 6% Convertible Debentures totaling $1.6 million with
several investors. Along with the $3.1 million in 6% Convertible Debentures, the
Company issued to the purchasers of the Debentures non-transferable warrants to
purchase a total of 42,667 shares of the Company's common stock, which are
exercisable at $1.80 per share through September 5, 2000. The proceeds of the
offering will be used for general corporate purposes.
The Debentures were offered to U. S. subscribers in compliance with
Section 4(2) of the Securities Act of 1933, as amended (the "Act"), who are
"accredited investors" (as such term is defined in Regulation D of the Act).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
4.1 Form of Warrant dated August 18, 1997
4.2 Form of Debenture dated August 18, 1997
4.3 Form of Registration Rights Agreement dated August 18, 1997
4.4 Form of Warrant dated September 5, 1997
4.5 Form of Debenture dated September 5, 1997
4.6 Form of Registration Rights Agreement dated September 5, 1997
99.1 Press Release dated August 19, 1997
99.2 Press Release dated September 9, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 16, 1997
STARBASE CORPORATION
By: /S/ DONALD R. FARROW
----------------------
Donald R. Farrow,
President and Chief Operating Officer
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EXHIBIT INDEX
EXHIBIT
NO. PAGE
- ------ ------
4.1 Form of Warrant dated August 18, 1997 5
4.2 Form of Debenture dated August 18, 1997 9
4.3 Form of Registration Rights Agreement dated August 18, 1997 16
4.4 Form of Warrant dated September 5, 1997 24
4.5 Form of Debenture dated September 5, 1997 28
4.6 Form of Registration Rights Agreement dated September 5, 1997 35
99.1 Press Release dated August 19, 1997 43
99.2 Press Release dated September 9, 1997 44
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EXHIBIT 4.1
THIS WARRANT AND THE COMMON STOCK TO BE ISSUED UPON EXERCISE OF THIS WARRANT
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE TRANSFERRED UNLESS REGISTERED UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
NO. 1997-CMN-XXX
STARBASE CORPORATION
NONTRANSFERABLE COMMON STOCK PURCHASE WARRANT
1. ISSUANCE. In consideration of good and valuable consideration, the receipt of
which is hereby acknowledged by StarBase Corporation, a Delaware corporation
(the "Company") _________________ or registered assigns (the "Holder") is hereby
granted the right to purchase at any time until 5:00 P.M., New York City time,
on August 18, 2000 (the "Expiration Date"), (___________) fully paid and
nonassessable shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock") at an initial exercise price of $1.58 per share (the
"Exercise Price"), subject to further adjustment as set forth in Section 6
hereof.
2. EXERCISE OF WARRANTS. This Warrant is exercisable in whole or in part at the
Exercise Price per share of Common Stock payable hereunder, payable in cash or
by certified or official bank check. Upon surrender of this Warrant Certificate
with the annexed Notice of Exercise Form duly executed, together with payment of
the Exercise Price for the shares of Common Stock purchased, the Holder shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased.
3. RESERVATION OF SHARES. The Company hereby agrees that at all times during the
term of this Warrant there shall be reserved for issuance upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant (the "Warrant Shares").
4. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
5. RIGHTS OF THE HOLDER. The Holder shall not by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
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6. PROTECTION AGAINST DILUTION.
(1) ADJUSTMENT MECHANISM. If an adjustment of the Exercise Price is required
pursuant to this Section 6, the Holder shall be entitled to purchase such number
of additional shares of Common stock as will cause (I) the total number of
shares of Common Stock Holder is entitled to purchase pursuant to this Warrant,
multiplied by (ii) the adjusted purchase price per share, to equal (iii) the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment multiplied by the total purchase price before
adjustment.
(2) CAPITAL ADJUSTMENTS. In case of any stock split or reverse stock split,
stock dividend, reclassification of the Common Stock, recapitalization, merger
or consolidation, or like capital adjustment affecting the Common Stock of the
Company, the provisions of this Section 6 shall be applied as if such capital
adjustment event had occurred immediately prior to the date of this Warrant and
the original purchase price had been fairly allocated to the stock resulting
from such capital adjustment; and in other respects the provisions of this
Section shall be applied in a fair, equitable and reasonable manner so as to
give effect, as nearly as may be, to the purposes hereof. A rights offering to
stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights.
7. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION RIGHTS.
(1) This Warrant may not be assigned or transferred in whole or in part. This
Warrant has not been registered under the Securities Act of 1933, as amended
(the "Act"), and has been issued to the Holder for investment and not with a
view to the distribution of either the Warrant or the Warrant Shares. Neither
the Warrant Shares nor any other security issued or issuable upon exercise of
this Warrant may be sold, transferred, pledged or hypothecated in the absence of
an effective registration statement under the Act relating to such security or
an opinion of counsel satisfactory to the Company and the registration is not
required under the Act. Each certificate for the Warrant, the Warrant Shares and
any other security issued or issuable upon exercise of this Warrant shall
contain the following legend on the face thereof, as determined by counsel for
the Company:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
(2) The Company agrees to file a registration statement, which shall include the
Warrant Shares, on Form S-3 (or any successor form to Form S-3) (the
"Registration Statement"), pursuant to the terms of a Registration Rights
Agreement between the Company and the Holder dated August 18, 1997.
8. NOTICES. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, telegraphed, telexed,
sent by facsimile transmission or sent by certified, registered or express mail,
postage pre-paid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission, or, if
mailed, two days after the date of deposit in the United States mails, as
follows:
(1) if to the Company, to:
StarBase Corporation
18872 McArthur Road, Suite 300
Irvine, California 92612
Attn: Chief Financial Officer
(2) if to the Holder, to:
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Any party may be notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
9. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant may be amended or
supplemented only by an instrument in writing signed by the parties hereto. This
Warrant of even date herewith contain the full understanding of the parties
hereto with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. GOVERNING LAW. This Warrant shall be governed by and construed in accordance
with the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based ON FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions.
11. COUNTERPARTS. This Warrant may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
12. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
18th day of August 1997.
STARBASE CORPORATION
By: /s/ William R. Stow III
-----------------------------------------
William R. Stow III
-----------------------------------------
(Print Name)
Chief Executive Officer
-----------------------------------------
(Title)
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ANNEX I
NOTICE OF EXERCISE OF WARRANT
(1) The undersigned hereby irrevocably elects to exercise the
right, represented by the Warrant Certificate dated as of
___________, to purchase ___ shares of the Common Stock, par
value $.01 per share, of StarBase Corporation and tenders
herewith payment in accordance with Section 1 of said Common
Stock Purchase Warrant.
(2) In exercising this Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common stock are being
acquired solely for the account of the undersigned and not as
a nominee for any other party, and for investment, and that
the undersigned will not offer sell or otherwise dispose of
any such shares of Common Stock, except under circumstances
that will not result in a violation of the United States
Securities Act of 1933, as amended, or any foreign otr state
securities laws.
(3) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or is
such other name as is specified below.
(4) Please issue a new Warrant for the unexercised portion of
the attached Warrant in the name of the undersigned.
Dated:
---------------------
By:
------------------------------
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EXHIBIT 4.2
FORM OF DEBENTURE
NEITHER THIS DEBENTURE NOR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS DEBENTURE (COLLECTIVELY, THE "SECURITIES") HAS BEEN REGISTERED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ?ACT?) OR THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THE SECURITIES
ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR ARE PERMITTED UNDER THE ACT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
No. 97-D-1 US $_______________________
Issue Date: August 18, 1997
STARBASE CORPORATION
6% CONVERTIBLE DEBENTURE DUE AUGUST 18, 1999
THIS DEBENTURE is one of a duly authorized issue of $3,000,000 in
Debentures of STARBASE CORPORATION, a corporation duly organized and existing
under the laws of the Delaware (the "Company") designated as its 6% Convertible
Debenture Due August 18,1999.
FOR VALUE RECEIVED, the Company promises to pay to _____________________
__________________, the registered holder hereof (the "Holder"), the principal
sum of One Million Five Hundred Thousand and 00/100 (US $1,500,000) Dollars on
August 18, 1999 (the "Maturity Date") and to pay interest on the principal sum
outstanding from time to time in arrears upon conversion as provided herein
on August 18, 1999 at the rate of 6% per annum accruing from the date of initial
issuance. Accrual of interest shall commence on the first such business day
to occur after the date hereof until payment in full of the principal sum has
been made or duly provided for. Subject to the provisions of paragraph 4 below,
the principal of, and interest on, this Debenture are payable at the option of
the Company, in shares of Common Stock $.01 par value per share of the Company
("Common Stock"), or in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts,
at the address last appearing on the Debenture Register of the Company as
designated in writing by the Holder from time to time. The Company will pay the
principal of and interest upon this Debenture on the Maturity Date, less any
amounts required by law to be deducted, to the registered holder of this
Debenture as of the tenth day prior to the Maturity Date and addressed to such
holder as the last address appearing on the Debenture Register. The forwarding
of such check shall constitute a payment of principal and interest hereunder and
shall satisfy and discharge the liability for principal and interest on this
Debenture to the extent of the sum represented by such check plus any amounts
so deducted.
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This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of One Hundred
Thousand Dollars (US$100,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same. No
service charge will be made for such registration or transfer or exchange.
2. The Company shall be entitled to withhold from all payments
of principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws
or other applicable laws at the time of such payments, and Holder shall execut
and deliver all required documentation in connection therewith.
3. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and other applicable state and foreign securities laws. In the event of
any proposed transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person, that it receive
reasonable transfer documentation including opinions that the issuance of the
Debenture in such other name does not and will not cause a violation of the Act
or any applicable state or foreign securities laws. Prior to due presentment
for transfer of this Debenture, the Company and any agent of the Company may
treat the person in whose name this Debenture is duly registered on the
Company's Debenture Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
4. A. Subject to Sections 4B and 4C, the Holder of this
Debenture is entitled, at its option, to convert at any time commencing the
earlier of (a) ninety (90) days after the Issuance Date, or (b) at the option of
the Company, at any time after the effective date of the Registration Statement
filed pursuant to the Registration Rights Agreement between the Company and
the Holder, or the Holder's predecessor in interest, the principal amount
of this Debenture, provided that the principal amount is at least US $10,000
(unless if at the time of such election to convert the aggregate principal
amount of all Debentures registered to the Holder is less that Ten Thousand
Dollars (US $10,000), then the whole amount thereof) into shares of Common
Stock of the Company at a conversion price for each share of Common Stock equal
to the lesser of (a) 100% of the Market Price on the Issuance Date, and (b) (i)
84% of the Market Price on the Conversion Date if such date is between ninety
(90) and one hundred twenty (120) days from the date hereof; (ii) 80% of the
Market Price if the date is between one hundred twenty-one (121) and one hundred
fifty (150) days from the date hereof, or (iii) 78% of the Market Price
thereafter. For purposes of this Section 4, the Market Price shall be the
average closing bid price of the Common Stock on the five (5) trading days
immediately preceding the Issuance Date or Conversion Date, as may be
applicable, as reported by the National Association of Securities Dealers, or
the closing bid price on the over-the-counter market on such date or, in the
event the Common Stock is listed on a stock exchange, the Market Price shal
be the closing price on the exchange on such date, as reported in the Wall
Street Journal. Conversion shall be effectuated by surrendering the
Debentures to be converted to the Company with the form of conversion notice
attached hereto as Exhibit A, executed by the Holder of the Debenture evidencing
such Holder's intention to convert this Debenture or aspecified portion (as
above provided) hereof, and accompanied, if required by the Company, by proper
assignment hereof in blank. Interest accrued or accruing from the date of
issuance to the date of conversion shall, at the option of the Company, be paid
in cash or Common Stock upon conversion at the Conversion Rate. No fraction of
Shares or scrip representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded to the nearest whole share.
The date on which notice of conversion is given (the "Conversion
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Date") shall be deemed to be the date on which the Holder has delivered this
Debenture, with the conversion notice duly executed, to the Company or, the date
set forth in such facsimile delivery of the notice of conversion if the
Debenture is received by the Company within three (3) business days therefrom.
Facsimile delivery of the conversion notice shall be accepted by the Company at
telephone number (714-442-4404); ATTN: Doug Norman). Certificates representing
Common Stock upon conversion will be delivered within three (3) business days
from the date the notice of conversion with the original Debenture is delivered
to the Company.
B. The Company shall have the right to require, by
written notice to the Holder of this Debenture at
least ten (10) days prior to the Maturity Date, that
the Holder of this Debenture exercise its right of
conversion with respect to all or that portion of the
principal amount and interest outstanding on the
Maturity Date.
C. In lieu of converting into Common Stock, the Company
will have the option of partially or fully paying
cash to the Holder so that the Holder will realize
the full economic benefit the Holder would derive
from converting the Debentures and selling the Common
Stock at the closing ask price on the Conversion Date
with no transaction fees. The Company agrees to
notify the Holder, in writing, at least ten trading
days in advance of any time period in which it
intends to exercise this option.
5. The Company may at its option redeem all or a portion of
the outstanding Debentures upon ten (10) days written or telecopy notice to the
Holder. If the Company fails to redeem the Debentures at the end of such ten-da
period, the Company shall promptly pay the Holder by wire transfer a penalty
equal to $100,000 and shall be precluded from redeeming any outstanding
Debentures at any time thereafter. Time is of the essence as to the Company's
payment of the penalty for failure to redeem.
6. No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture and all other
Debentures now or hereafter issued of similar terms are direct obligations of
the Company.
7. No recourse shall be had for the payment of the principal
of, or the interest on, this Debenture, or for any claim based hereon, or
otherwise in respect hereof, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
8. If the Company merges or consolidates with another
corporation or sells or transfers all or substantially all of its assets to
another person and the holders of the Common Stock are entitled to receive
stock, securities or property in respect of or in exchange for Common Stock,
then as a condition of such merger, consolidation, sale or transfer, the Company
and any such successor, purchaser or transferee agree that the Debenture may
thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of Common Stock into which this Debenture might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable. In the event of any
proposed merger, consolidation or sale or transfer of all or substantially all
of the assets of the Company (a "Sale"), the Holder hereof shall have the right
to convert by delivering a Notice of Conversion to the Company within fifteen
(15) days of receipt of notice of such Sale from the Company. In the event the
Holder hereof shall elect not to convert, the Company may prepay all outstanding
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principal and accrued interest on this Debenture, less all amounts required by
law to be deducted, upon which tender of payment following such notice, the
right of conversion shall terminate.
9. The Holder of the Debenture, by acceptance hereof, agrees
that this Debenture is being acquired for investment and that such Holder will
not offer, sell or otherwise dispose of this Debenture or the shares of Common
Stock issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.
10. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based ON FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions.
11. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of
principal or interest on this Debenture and
such default shall remain unremedied for five
(5) business days after the Company has been
notified of the default in writing by a
Holder; or
b. Any of the representations or warranties made
by the Company herein, in the Securities
Purchase Agreement, or in any certificate or
financial or other written statements
furnished by the Company in connection with
the execution and delivery of this Debenture
or the Securities Purchase Agreement shall be
false or misleading in any material respect
at the time made; or
c. The Company fails to issue shares of Common
Stock to the Holder or to cause its Transfer
Agent to issue shares of Common Stock upon
exercise by the Holder of the conversion
rights of the Holder in accordance with the
terms of this Debenture, fails to transfer or
to cause its Transfer Agent to transfer any
certificate for shares of Common Stock issued
to the Holder upon conversion of this
Debenture and when required by this Debenture
or the Registration Rights Agreement, or
fails to remove any restrictive legend or to
cause its Transfer Agent to transfer on any
certificate or any shares of Common Stock
issued to the Holder upon conversion of this
Debenture as and when required by this
Debenture, the Securities Purchase Agreement
or the Registration Rights Agreement and any
such failure shall continue uncured for five
(5) business days after the Company has been
notified of such failure in writing by
Holder.
d. The Company shall fail to perform or observe,
in any material respect, any other covenant,
term, provision, condition, agreement or
obligation of the Company under this
Debenture and such failure shall continue
uncured for a period of thirty (30) days
after written notice from the Holder of such
failure; or
e. The Company shall (1) admit in writing its
inability to pay its debts generally as they
mature; (2) make an assignment for the
benefit of creditors or commence proceedings
for its dissolution; or (3) apply for or
consent to the appointment of a trustee,
liquidator or receiver for its or for a
substantial part of its property or business;
or
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f. A trustee, liquidator or receiver shall be
appointed for the Company or for a
substantial part of its property or business
without its consent and shall not be
discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of
competent jurisdiction at the instance of any
governmental agency shall assume custody or
control of the whole or any substantial
portion of the properties or assets of the
Company and shall not be dismissed within
sixty (60) days thereafter; or
h. Any money judgment, writ or warrant of
attachment, or similar process in excess of
Five Hundred Thousand ($500,000) Dollars in
the aggregate shall be entered or filed
against the Company or any of its properties
or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period
of sixty(60) days or in any event later than
five (5) days prior to the date of any
proposed sale thereunder; or
i. Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings
for relief under any bankruptcy law or any
law for the relief of debtors shall be
instituted by or against the Company and, if
instituted against the Company, shall not be
dismissed within sixty (60) days after such
institution or the Company shall by any
action or answer approve of, consent to, or
acquiesce in any such proceedings or admit
the material allegations of, or default in
answering a petition filed in any such
proceeding; or
j. The Company shall have its Common Stock
suspended or delisted from an exchange or
over-the-counter market from trading for in
excess of five trading days.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately enforce any and all of the Holder's rights and
remedies provided herein or any other rights or remedies afforded by law.
12. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: August 18, 1997
STARBASE CORPORATION
By: /s/ William R. Stow III
-----------------------------------------
William R. Stow III
-----------------------------------------
(Print Name)
Chief Executive Officer
-----------------------------------------
(Title)
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________
of the principal amount of the above Debenture No. ___ into shares of Common
Stock of STARBASE CORPORATION (the "Company") according to the conditions
hereof, as of the date written below. In converting the Debenture No.
______________, the undersigned hereby confirms and acknowledges that the shares
of Common Stock are being acquired solely for the account of the undersigned and
not a nominee for any other party, and that the undersigned will not offer, sell
or otherwise dispose of any such shares of Common Stock, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended.
Date of Conversion* ___________________________________________________________
Applicable Conversion Price __________________________________________________
Signature _____________________________________________________________________
[Name]
Address: ______________________________________________________________________
This original Debenture and Notice of Conversion must be received by the
Company by the third business date following the Date of Conversion.
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EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of August 18,
1997 (this "Agreement"), is made by and between STARBASE CORPORATION, a Delaware
corporation (the "Company"), and the entity named on the signature page hereto
(the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of August 18, 1997, between the Initial
Investor and the Company (the "Securities Purchase Agreement"), the Company has
agreed to issue and sell to the Initial Investor one or more 6% Convertible
Debentures of the Company, in an aggregate principal amount not exceeding
$3,000,000 (collectively, the "Debentures"), and warrants to purchase up to
80,000 shares of Common Stock, which Debentures will be convertible into shares
of the common stock, $.01 par value (the "Common Stock"), of the Company (the
"Conversion Shares") upon the terms and subject to the conditions of such
Debentures, and the Warrants will be exercisable for shares of Common Stock (the
"Warrant Shares"); and
WHEREAS, to induce the Initial Investor to execute and deliver
the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and Warrant Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agrees as follows:
7. Definitions.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer to
a registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means the Conversion Shares
and the Warrant Shares.
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.
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I. REGISTRATION.
(a) Mandatory Registration. The Company shall prepare and file with the SEC, no
later than thirty (30) days following the initial Closing Date under the
Securities Purchase Agreement, either a Registration Statement on Form S-3
registering for resale by the Investor a sufficient number of shares of
Common Stock for the Initial Investors (or such lesser number as may be
required by the SEC, but in no event less than the number of shares into
which the Debentures would be convertible and the Warrants exercisable at
the time of filing of the Form S-3, or an amendment to any pending Company
Registration Statement on Form S-3, and such Registration Statement or
amended Registration Statement shall state that, in accordance with Rule
416 and 457 under the Securities Act, it also covers such indeterminate
number of additional shares of Common Stock as may become issuable upon
conversion of the Debentures and the exercise of the Warrants resulting
from adjustment in the Conversion Price, or to prevent dilution resulting
from stock splits, or stock dividends), which Registration Statement shall
be declared effective no later than 90 days after the Closing Date. If at
any time the number of shares of Common Stock into which the Debentures may
be converted exceeds the aggregate number of shares of Common Stock then
registered, the Company shall, within ten (10) business days after receipt
of a written notice from any Investor, either (i) amend the Registration
Statement filed by the Company pursuant to the preceding sentence, if such
Registration Statement has not been declared effective by the SEC at that
time, to register all shares of Common Stock into which the Debentures may
be converted, or (ii) if such Registration Statement has been declared
effective by the SEC at that time, file with the SEC an additional
Registration Statement on Form S-3 to register the shares of Common Stock
into which the Debentures may be converted that exceed the aggregate number
of shares of Common Stock already registered.
(b) Payments by the Company.
If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not effective by ninety (90) days following the initial Closing Date (the
"Required Effective Date") (except as provided by the last sentence of section
2a), then the Company will make payments to the Initial Investor in such amounts
and at such times as shall be determined pursuant to this Section 2(b). The
amount to be paid by the Company to the Initial Investor shall be determined as
of each Computation Date, and such amount shall be equal to one (1%) percent of
the purchase price paid by the Initial Investor for all Debentures then
purchased and outstanding pursuant to the Securities Purchase Agreement for any
period from the Required Effective Date to the first Computation Date, two (2%)
percent to the next Computation Date and three (3%) percent to each Computation
Date thereafter, until the Registration Statement is declared effective by the
SEC (the "Periodic Amount"). The full Periodic Amount shall be paid by the
Company in immediately available funds within three business days after each
Computation Date. Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent any delay
in the effectiveness of the Registration Statement occurs because of an act of,
or a failure to act or to act timely by the Initial Investor or its counsel or
the SEC, or in the event all of the Registrable Securities may be sold pursuant
to Rule 144 or another available exemption under the Act.
As used in this Section 2(b), the following terms shall have
the following meanings:
"Computation Date" means the date which is thirty (30) days
after the Required Effective Date (except as provided by the last sentence of
section 2(a)), and, if the Registration Statement required to be filed by the
Company pursuant to Section 2(a) has not theretofore been declared effective by
the SEC, each date which is thirty (30) days after the previous Computation Date
(pro rated for partial periods) until such Registration Statement is so declared
effective.
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall do each of the
following.
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(a) Prepare promptly and file with the SEC, a Registration
Statement with respect to not less than the number of Registrable Securities
provided in Section 2(a), above, and thereafter use its reasonable best efforts
to cause each Registration Statement relating to Registrable Securities to
become effective ninety (90) days after the Closing Date, and keep the
Registration Statement effective at all times until the earliest (the
"Registration Period") of (i) the date that is two years after the Closing Date
(ii) the date when the Investors may sell all Registrable Securities under Rule
144 or (iii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Initial Investors to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to their
filing with the SEC.
(d) Furnish to each Investor whose Registrable Securities are
included in the Registration Statement and its legal counsel identified to the
Company, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(e) As promptly as practicable after becoming aware of such
event, notify each Investor of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state 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, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(f) As promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Use its reasonable efforts to secure designation of all
the Registrable Securities covered by the Registration Statement as a National
Association of Securities Dealers Automated Quotations System ("NASDAQ") "Small
Capitalization" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on the NASDAQ SmallCap Market; or if,
despite the Company's reasonable efforts to satisfy the preceding clause, the
Company is unsuccessful in doing so, to secure NASDAQ/OTC Bulletin Board
authorization and quotation for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities;
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(h) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(i) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investors may reasonably request, and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel; and
(j) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investor of the Registrable Securities
pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least five (5) days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement. If at least two (2) business
days prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(e)
or 3(f), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or 3(f) and, if
so directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other
than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 3, but including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company,
shall be borne by the Company.
II. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this Agreement:
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(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, (II)
be available to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered the prospectus made available by the Company;
or (III) apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Each Investor will indemnify the Company and its
officers, directors and agents against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor, expressly
for use in connection with the preparation of the Registration Statement,
subject to such limitations and conditions as are applicable to the
Indemnification provided by the Company to this Section 6. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action of its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
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except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; PROVIDED, HOWEVER, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available
to the Investors the benefits of Rule 144 promulgated under the Securities Act
or any other similar rule or regulation of the SEC that may at any time permit
the Investors to sell securities of the Company to the public without
registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have
the Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any Debenture of the Company which is
convertible into such securities) only if: (a) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein. In the event of any delay in filing or effectiveness of the
Registration Statement as a result of such assignment, the Company shall not be
liable for any damages arising from such delay, or the payments set forth in
Section 2(c) hereof.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold an eighty (80%) percent interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
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11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission,
receipt confirmed, or other means) or sent by certified mail, return receipt
requested, properly addressed and with proper postage pre-paid (i) if to the
Company, STARBASE CORPORATION, 18872 MacArthur Boulevard, Suite 300, Irvine,
California 92612, ATTN: President, with a copy to Parker Chapin Flattau &
Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, ATTN: Martin
Eric Weisberg, Esq.; (ii) if to the Initial Investor, at the address set forth
under its name in the Securities Purchase Agreement, and (iii) if to any other
Investor, at such address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by notice given
in accordance with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by certified mail, four (4) calendar
days after deposit with the United states Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
(e) This Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein.
This Agreement supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) Neither party shall be liable for consequential damages.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
STARBASE CORPORATION
By: /S/WILLIAM R. STOW III
----------------------------
Name: William R. Stow III
Title: Chief Executive Officer
[ ]
By:
Name:
Title:
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EXHIBIT 4.4
THIS WARRANT AND THE COMMON STOCK TO BE ISSUED UPON EXERCISE OF THIS WARRANT
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE TRANSFERRED UNLESS REGISTERED UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
NO. 1997-CMN-XXX
STARBASE CORPORATION
NONTRANSFERABLE COMMON STOCK PURCHASE WARRANT
8. ISSUANCE. In consideration of good and valuable consideration, the receipt of
which is hereby acknowledged by StarBase Corporation, a Delaware corporation
(the "Company") _________________ or registered assigns (the "Holder") is hereby
granted the right to purchase at any time until 5:00 P.M., New York City time,
on September 5, 2000 (the "Expiration Date"), (___________) fully paid and
nonassessable shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock") at an initial exercise price of $1.80 per share (the
"Exercise Price"), subject to further adjustment as set forth in Section 6
hereof.
9. EXERCISE OF WARRANTS. This Warrant is exercisable in whole or in part at the
Exercise Price per share of Common Stock payable hereunder, payable in cash or
by certified or official bank check. Upon surrender of this Warrant Certificate
with the annexed Notice of Exercise Form duly executed, together with payment of
the Exercise Price for the shares of Common Stock purchased, the Holder shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased.
10. RESERVATION OF SHARES. The Company hereby agrees that at all times during
the term of this Warrant there shall be reserved for issuance upon exercise of
this Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant (the "Warrant Shares").
11. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
12. RIGHTS OF THE HOLDER. The Holder shall not by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
13. PROTECTION AGAINST DILUTION.
(1) ADJUSTMENT MECHANISM. If an adjustment of the Exercise Price is required
pursuant to this Section 6, the Holder shall be entitled to purchase such number
of additional shares of Common stock as will cause (I) the total number of
shares of Common Stock Holder is entitled to purchase pursuant to this Warrant,
multiplied by (ii) the adjusted purchase price per share, to equal (iii) the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment multiplied by the total purchase price before
adjustment.
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(2) CAPITAL ADJUSTMENTS. In case of any stock split or reverse stock split,
stock dividend, reclassification of the Common Stock, recapitalization, merger
or consolidation, or like capital adjustment affecting the Common Stock of the
Company, the provisions of this Section 6 shall be applied as if such capital
adjustment event had occurred immediately prior to the date of this Warrant and
the original purchase price had been fairly allocated to the stock resulting
from such capital adjustment; and in other respects the provisions of this
Section shall be applied in a fair, equitable and reasonable manner so as to
give effect, as nearly as may be, to the purposes hereof. A rights offering to
stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights.
14. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION
RIGHTS.
(1) This Warrant may not be assigned or transferred in whole or in part. This
Warrant has not been registered under the Securities Act of 1933, as amended
(the "Act"), and has been issued to the Holder for investment and not with a
view to the distribution of either the Warrant or the Warrant Shares. Neither
the Warrant Shares nor any other security issued or issuable upon exercise of
this Warrant may be sold, transferred, pledged or hypothecated in the absence of
an effective registration statement under the Act relating to such security or
an opinion of counsel satisfactory to the Company and the registration is not
required under the Act. Each certificate for the Warrant, the Warrant Shares and
any other security issued or issuable upon exercise of this Warrant shall
contain the following legend on the face thereof, as determined by counsel for
the Company:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
(2) The Company agrees to file a registration statement, which shall include the
Warrant Shares, on Form S-3 (or any successor form to Form S-3) (the
"Registration Statement"), pursuant to the terms of a Registration Rights
Agreement between the Company and the Holder dated September 5, 1997.
15. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage pre-paid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission, or, if mailed, two days after the date of deposit in the United
States mails, as follows:
(1) if to the Company, to:
StarBase Corporation
18872 McArthur Road, Suite 300
Irvine, California 92612
Attn: Chief Financial Officer
(2) if to the Holder, to:
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Any party may be notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
16. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This
Warrant may be amended or supplemented only by an instrument in writing signed
by the parties hereto. This Warrant of even date herewith contain the full
understanding of the parties hereto with respect to the subject matter hereof
and thereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein and therein.
17. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York. Each of the
parties consents to the jurisdiction of the federal courts whose districts
encompass any part of the City of New York or the state courts of the State of
New York sitting in the City of New York in connection with any dispute arising
under this Agreement and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based ON FORUM NON COVENIENS, to the
bringing of any such proceeding in such jurisdictions.
18. COUNTERPARTS. This Warrant may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
19. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Warrant are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Warrant as of the 5th day of September 1997.
STARBASE CORPORATION
By:
-------------------------------
Its:
------------------------------
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ANNEX I
NOTICE OF EXERCISE OF WARRANT
(1) The undersigned hereby irrevocably elects to exercise the
right, represented by the Warrant Certificate dated as of
___________, to purchase ___ shares of the Common Stock, par
value $.01 per share, of StarBase Corporation and tenders
herewith payment in accordance with Section 1 of said Common
Stock Purchase Warrant.
(2) In exercising this Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common stock are being
acquired solely for the account of the undersigned and not as
a nominee for any other party, and for investment, and that
the undersigned will not offer sell or otherwise dispose of
any such shares of Common Stock, except under circumstances
that will not result in a violation of the United States
Securities Act of 1933, as amended, or any foreign otr state
securities laws.
(3) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or is
such other name as is specified below.
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned.
Dated:_______________________
By:___________________________
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EXHIBIT 4.5
ANNEX I
FORM OF DEBENTURE
NEITHER THIS DEBENTURE NOR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS DEBENTURE (COLLECTIVELY, THE "SECURITIES") HAS BEEN REGISTERED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE AACT@) OR THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THE SECURITIES
ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR ARE PERMITTED UNDER THE ACT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
No. 97-D-XX US $______________
Issue Date: September 5, 1997
STARBASE CORPORATION
6% CONVERTIBLE DEBENTURE DUE SEPTEMBER 5, 1999
THIS DEBENTURE is one of a duly authorized issue of $1,600,000 in
Debentures of STARBASE CORPORATION, a corporation duly organized and existing
under the laws of the Delaware (the "Company") designated as its 6% Convertible
Debenture Due September 5,1999.
FOR VALUE RECEIVED, the Company promises to pay to _______________,
the registered holder hereof (the "Holder"), the principal sum of One Million
Five Hundred Thousand and 00/100 (US $___________) Dollars on September 5, 1999
(the "Maturity Date") and to pay interest on the principal sum outstanding from
time to time in arrears upon conversion as provided herein on September 5, 1999
at the rate of 6% per annum accruing from the date of initial issuance. Accrual
of interest shall commence on the first such business day to occur after the
date hereof until payment in full of the principal sum has been made or duly
provided for. Subject to the provisions of &4 below, the principal of, and
interest on, this Debenture are payable at the option of the Company, in shares
of Common Stock $.01 par value per share of the Company ("Common Stock"), or in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, at the address last
appearing on the Debenture Register of the Company as designated in writing by
the Holder from time to time. The Company will pay the principal of and interest
upon this Debenture on the Maturity Date, less any amounts required by law to be
deducted, to the registered holder of this Debenture as of the tenth day prior
to the Maturity Date and addressed to such holder as the last address appearing
on the Debenture Register. The forwarding of such check shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Debenture to the extent of the sum
represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
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1. The Debentures are issuable in denominations of Twenty Five Thousand
Dollars (US$25,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same. No
service charge will be made for such registration or transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws. In the event of any proposed
transfer of this Debenture, the Company may require, prior to issuance of a new
Debenture in the name of such other person, that it receive reasonable transfer
documentation including opinions that the issuance of the Debenture in such
other name does not and will not cause a violation of the Act or any applicable
state or foreign securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.
4. A. Subject to Sections 4B and 4C, the Holder of this Debenture is
entitled, at its option, to convert at any time commencing the earlier of (a)
ninety (90) days after the Issuance Date, or (b) at the option of the Company,
at any time after the effective date of the Registration Statement filed
pursuant to the Registration Rights Agreement between the Company and the
Holder, or the Holder's predecessor in interest, the principal amount of this
Debenture, provided that the principal amount is at least US $5,000 (unless if
at the time of such election to convert the aggregate principal amount of all
Debentures registered to the Holder is less that Five Thousand Dollars (US
$5,000), then the whole amount thereof) into shares of Common Stock of the
Company at a conversion price for each share of Common Stock equal to the lesser
of (a) 100% of the Market Price on the Issuance Date, and (b) (i) 84% of the
Market Price on the Conversion Date if such date is between ninety (90) and one
hundred twenty (120) days from the date hereof; (ii) 80% of the Market Price if
the date is between one hundred twenty-one (121) and one hundred fifty (150)
days from the date hereof, or (iii) 78% of the Market Price thereafter. For
purposes of this Section 4, the Market Price shall be the average closing bid
price of the Common Stock on the five (5) trading days immediately preceding the
Issuance Date or Conversion Date, as may be applicable, as reported by the
National Association of Securities Dealers, or the closing bid price on the
over-the-counter market on such date or, in the event the Common Stock is listed
on a stock exchange, the Market Price shall be the closing price on the exchange
on such date, as reported in the Wall Street Journal. Conversion shall be
effectuated by surrendering the Debentures to be converted to the Company with
the form of conversion notice attached hereto as Exhibit A, executed by the
Holder of the Debenture evidencing such Holder's intention to convert this
Debenture or a specified portion (as above provided) hereof, and accompanied, if
required by the Company, by proper assignment hereof in blank. Interest accrued
or accruing from the date of issuance to the date of conversion shall, at the
option of the Company, be paid in cash or Common Stock upon conversion at the
Conversion Rate. No fraction of Shares or scrip representing fractions of shares
will be issued on conversion, but the number of shares issuable shall be rounded
to the nearest whole share. The date on which notice of conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder has
delivered this Debenture, with the conversion notice duly executed, to the
Company or, the date set forth in such facsimile delivery of the notice of
conversion if the Debenture is received by the Company within three (3) business
days therefrom. Facsimile delivery of the conversion notice shall be accepted by
the Company at telephone number (714-442-4404); ATTN: Doug Norman). Certificates
representing Common Stock upon conversion will be delivered within three (3)
business days from the date the notice of conversion with the original Debenture
is delivered to the Company.
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<PAGE>
B. The Company shall have the right to require, by written
notice to the Holder of this Debenture at least ten (10) days prior to the
Maturity Date, that the Holder of this Debenture exercise its right of
conversion with respect to all or that portion of the principal amount and
interest outstanding on the Maturity Date.
C. In lieu of converting into Common Stock, the Company will
have the option of partially or fully paying cash to the Holder so that the
Holder will realize the full economic benefit the Holder would derive from
converting the Debentures and selling the Common Stock at the closing ask price
on the Conversion Date with no transaction fees. The Company agrees to notify
the Holder, in writing, at least ten trading days in advance of any time period
in which it intends to exercise this option.
5.The Company may at its option redeem all or a portion of the
outstanding Debentures upon ten (10) days written or telecopy notice to the
Holder.
6. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture and all other Debentures now or
hereafter issued of similar terms are direct obligations of the Company.
7. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
8. If the Company merges or consolidates with another corporation or
sells or transfers all or substantially all of its assets to another person and
the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee agree that the Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially all of the
assets of the Company (a "Sale"), the Holder hereof shall have the right to
convert by delivering a Notice of Conversion to the Company within fifteen (15)
days of receipt of notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the Company may prepay all outstanding
principal and accrued interest on this Debenture, less all amounts required by
law to be deducted, upon which tender of payment following such notice, the
right of conversion shall terminate.
9. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the shares of Common Stock
issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.
10. This Debenture shall be governed by and construed in accordance
with the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based ON FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions.
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11. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of
principal or interest on this Debenture and
such default shall remain unremedied for five
(5) business days after the Company has been
notified of the default in writing by a
Holder; or
b. Any of the representations or warranties made
by the Company herein, in the Securities
Purchase Agreement, or in any certificate or
financial or other written statements
furnished by the Company in connection with
the execution and delivery of this Debenture
or the Securities Purchase Agreement shall be
false or misleading in any material respect
at the time made; or
c. The Company fails to issue shares of Common
Stock to the Holder or to cause its Transfer
Agent to issue shares of Common Stock upon
exercise by the Holder of the conversion
rights of the Holder in accordance with
the terms of this Debenture,fails to transfer
or to cause its Transfer Agent to transfer
any certificate for shares of Common Stock
issued to the Holder upon conversion of this
Debenture and when required by this Debenture
or the Registration Rights Agreement, or
fails to remove any restrictive legend or
to cause its Transfer Agent to transfer on
any certificate or any shares of Common
Stock issued to the Holder upon conversion
of this Debenture as and when required by
this Debenture, the Securities Purchase
Agreement or the Registration Rights
Agreement and any such failure shall continue
uncured for five (5) business days after the
Company has been notified of such failure in
writing by Holder.
d. The Company shall fail to perform or observe,
in any material respect, any other covenant,
term, provision, condition, agreement or
obligation of the Company under this
Debenture and such failure shall continue
uncured for a period of thirty (30) days
after written notice from the Holder of such
failure; or
e. The Company shall (1) admit in writing its
inability to pay its debts generally as they
mature; (2) make an assignment for the
benefit of creditors or commence proceedings
for its dissolution; or (3) apply for or
consent to the appointment of a trustee,
liquidator or receiver for its or for a
substantial part of its property or business;
or
f. A trustee, liquidator or receiver shall be
appointed for the Company or for a
substantial part of its property or business
without its consent and shall not be
discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of
competent jurisdiction at the instance
of any governmental agency shall assume
custody or control of the whole or any
substantial portion of the properties or
assets of the Company and shall not be
dismissed within sixty (60) days thereafter;
or
h. Any money judgment, writ or warrant of
attachment, or similar process in excess of
Five Hundred Thousand ($500,000) Dollars in
the aggregate shall be entered or filed
against the Company or any of its properties
or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period
of sixty(60) days or in any event later than
five (5) days prior to the date of any
proposed sale thereunder; or
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i. Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings
for relief under any bankruptcy law or any
law for the relief of debtors shall be
instituted by or against the Company and, if
instituted against the Company, shall not be
dismissed within sixty (60) days after such
institution or the Company shall by any
action or answer approve of, consent to, or
acquiesce in any such proceedings or admit
the material allegations of, or default in
answering a petition filed in any such
proceeding; or
j. The Company shall have its Common Stock
suspended or delisted from an exchange or
over-the-counter market from trading for in
excess of five trading days.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately enforce any and all of the Holder's rights and
remedies provided herein or any other rights or remedies afforded by law.
12. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: September 5, 1997
STARBASE CORPORATION
By: /S/ WILLIAM R. STOW III
----------------------------
WILLIAM R. STOW III
----------------------------
(Print Name)
CHIEF EXECUTIVE OFFICER
----------------------------
(Title)
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________
of the principal amount of the above Debenture No. ___ into shares of Common
Stock of STARBASE CORPORATION (the "Company") according to the conditions
hereof, as of the date written below. In converting the Debenture No.
______________, the undersigned hereby confirms and acknowledges that the shares
of Common Stock are being acquired solely for the account of the undersigned and
not a nominee for any other party, and that the undersigned will not offer, sell
or otherwise dispose of any such shares of Common Stock, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended.
Date of Conversion* ____________________________________________________________
Applicable Conversion Price ___________________________________________________
Signature _____________________________________________________________________
[Name]
Address: ______________________________________________________________________
*This original Debenture and Notice of Conversion must be received by the
Company by the third business date following the Date of Conversion.
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EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 5,
1997 (this "Agreement"), is made by and between STARBASE CORPORATION, a Delaware
corporation (the "Company"), and the entity named on the signature page hereto
(the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of September 5, 1997, between the
Initial Investor and the Company (the "Securities Purchase Agreement"), the
Company has agreed to issue and sell to the Initial Investor one or more 6%
Convertible Debentures of the Company, in an aggregate principal amount not
exceeding $_________ (collectively, the "Debentures"), and warrants to purchase
up to_________ shares of Common Stock, which Debentures will be convertible into
shares of the common stock, $.01 par value (the "Common Stock"), of the Company
(the "Conversion Shares") upon the terms and subject to the conditions of such
Debentures, and the Warrants will be exercisable for shares of Common Stock (the
AWarrant Shares@); and
WHEREAS, to induce the Initial Investor to execute and deliver
the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and Warrant Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agrees as follows:
1. DEFINITIONS.
(b) As used in this Agreement, the following terms shall have
the following meanings:
(j) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means the Conversion Shares and
the Warrant Shares.
(iv) "Registration Statement" means a registration statement
of the Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
(a) Mandatory Registration. The Company shall prepare and file
with the SEC a Registration Statement on Form S-3 registering for resale by the
Investor a sufficient number of shares of Common Stock for the Initial Investors
(or such lesser number as may be required by the SEC, but in no event less than
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<PAGE>
the number of shares into which the Debentures would be convertible and the
Warrants exercisable at the time of filing of the Form S-3, or an amendment to
any pending Company Registration Statement on Form S-3, and such Registration
Statement or amended Registration Statement shall state that, in accordance with
Rule 416 and 457 under the Securities Act, it also covers such indeterminate
number of additional shares of Common Stock as may become issuable upon
conversion of the Debentures and the exercise of the Warrants resulting from
adjustment in the Conversion Price, or to prevent dilution resulting from stock
splits, or stock dividends), which Registration Statement shall be declared
effective no later than 90 days after the Closing Date. If at any time the
number of shares of Common Stock into which the Debentures may be converted
exceeds the aggregate number of shares of Common Stock then registered, the
Company shall, within ten (10) business days after receipt of a written notice
from any Investor, either (i) amend the Registration Statement filed by the
Company pursuant to the preceding sentence, if such Registration Statement has
not been declared effective by the SEC at that time, to register all shares of
Common Stock into which the Debentures may be converted, or (ii) if such
Registration Statement has been declared effective by the SEC at that time, file
with the SEC an additional Registration Statement on Form S-3 to register the
shares of Common Stock into which the Debentures may be converted that exceed
the aggregate number of shares of Common Stock already registered.
(B) PAYMENTS BY THE COMPANY.
If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not effective by ninety (90) days following the initial Closing Date (the
"Required Effective Date") (except as provided by the last sentence of section
2a), then the Company will make payments to the Initial Investor in such amounts
and at such times as shall be determined pursuant to this Section 2(b). The
amount to be paid by the Company to the Initial Investor shall be determined as
of each Computation Date, and such amount shall be equal to one (1%) percent of
the purchase price paid by the Initial Investor for all Debentures then
purchased and outstanding pursuant to the Securities Purchase Agreement for any
period from the Required Effective Date to the first Computation Date, two (2%)
percent to the next Computation Date and three (3%) percent to each Computation
Date thereafter, until the Registration Statement is declared effective by the
SEC (the "Periodic Amount"). The full Periodic Amount shall be paid by the
Company in immediately available funds within three business days after each
Computation Date. Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent any delay
in the effectiveness of the Registration Statement occurs because of an act of,
or a failure to act or to act timely by the Initial Investor or its counsel or
the SEC, or in the event all of the Registrable Securities may be sold pursuant
to Rule 144 or another available exemption under the Act.
As used in this Section 2(b), the following terms shall have
the following meanings:
"Computation Date" means the date which is thirty (30) days
after the Required Effective Date (except as provided by the last sentence of
section 2(a)), and, if the Registration Statement required to be filed by the
Company pursuant to Section 2(a) has not theretofore been declared effective by
the SEC, each date which is thirty (30) days after the previous Computation Date
(pro rated for partial periods) until such Registration Statement is so declared
effective.
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall do each of the
following.
(a) Prepare promptly and file with the SEC, a Registration
Statement with respect to not less than the number of Registrable Securities
provided in Section 2(a), above, and thereafter use its reasonable best efforts
to cause each Registration Statement relating to Registrable Securities to
become effective ninety (90) days after the Closing Date, and keep the
Registration Statement effective at all times until the earliest (the
"Registration Period") of (i) the date that is two years after the Closing Date
(ii) the date when the Investors may sell all Registrable Securities under Rule
144 or (iii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
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(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Initial Investors to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to their
filing with the SEC.
(d) Furnish to each Investor whose Registrable Securities are
included in the Registration Statement and its legal counsel identified to the
Company, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(e) As promptly as practicable after becoming aware of such
event, notify each Investor of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state 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, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(f) As promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Use its reasonable efforts to secure designation of all
the Registrable Securities covered by the Registration Statement as a National
Association of Securities Dealers Automated Quotations System ("NASDAQ") "Small
Capitalization" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on the NASDAQ SmallCap Market; or if,
despite the Company's reasonable efforts to satisfy the preceding clause, the
Company is unsuccessful in doing so, to secure NASDAQ/OTC Bulletin Board
authorization and quotation for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities;
(h) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(i) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investors may reasonably request, and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel; and
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(j) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investor of the Registrable Securities
pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least five (5) days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement. If at least two (2) business
days prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(e)
or 3(f), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or 3(f) and, if
so directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other
than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 3, but including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company,
shall be borne by the Company.
III. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable Securities,
the directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
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<PAGE>
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, (II)
be available to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered the prospectus made available by the Company;
or (III) apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Each Investor will indemnify the Company and its
officers, directors and agents against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor, expressly
for use in connection with the preparation of the Registration Statement,
subject to such limitations and conditions as are applicable to the
Indemnification provided by the Company to this Section 6. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action of its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; PROVIDED, HOWEVER, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
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<PAGE>
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available
to the Investors the benefits of Rule 144 promulgated under the Securities Act
or any other similar rule or regulation of the SEC that may at any time permit
the Investors to sell securities of the Company to the public without
registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
otherdocuments required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have
the Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any Debenture of the Company which is
convertible into such securities) only if: (a) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein. In the event of any delay in filing or effectiveness of the
Registration Statement as a result of such assignment, the Company shall not be
liable for any damages arising from such delay, or the payments set forth in
Section 2(c) hereof.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold an eighty (80%) percent interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission,
receipt confirmed, or other means) or sent by certified mail, return receipt
40
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requested, properly addressed and with proper postage pre-paid (i) if to the
Company, STARBASE CORPORATION, 18872 MacArthur Boulevard, Suite 300, Irvine,
California 92612, ATTN: President, with a copy to Parker Chapin Flattau &
Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, ATTN: Martin
Eric Weisberg, Esq.; (ii) if to the Initial Investor, at the address set forth
under its name in the Securities Purchase Agreement, and (iii) if to any other
Investor, at such address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by notice given
in accordance with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by certified mail, four (4) calendar
days after deposit with the United states Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on FORUM NON COVENIENS, to the bringing
of any such proceeding in such jurisdictions. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto. This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) Neither party shall be liable for consequential damages.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
STARBASE CORPORATION
By: /S/WILLIAM R. STOW III
--------------------------
Name: William R. Stow III
Title: Chief Executive Officer
[ ]
By:
Name:
Title:
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<PAGE>
EXHIBIT 99.1
[STARBASE LOGO]
STARBASE
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
William R. Stow III Donald R. Farrow Rebecca Bergman
Chairman & CEO President & COO General Information
(714) 442-4410 (714) 442-4425 11611 San Vicente Blvd., #700
Los Angeles, CA 90049
(310) 442-0599
_______________________________________________________________________________
FOR IMMEDIATE RELEASE
AUGUST 19, 1997
STARBASE CORPORATION COMPLETES $3.0 MILLION IN PRIVATE PLACEMENT DEBENTURES
IRVINE, CALIFORNIA - AUGUST 19, 1997 - StarBase Corporation (NASDAQ: SBAS) today
announced that it has completed a $3,000,000 private placement of its 6%
Convertible Debentures with an institutional investor. The placement consists of
two (2) tranches of $1,500,000 principal amount of Debentures. The first
$1,500,000 tranche of Debentures was issued yesterday. The second tranche will
close, subject to certain conditions, within 60 days after registration of the
common stock issuable upon conversion of the Debentures. In addition to the
Debentures, the purchaser will receive 40,000 warrants per tranche to acquire
the Company's common stock. The placement was made pursuant to Regulation D of
the Securities Act of 1933, as amended.
In a related matter, the Company has also completed a previously announced
warrant exchange offer whereby each holder received one share of common stock
for every three warrants tendered. Of the 4,833,534 outstanding warrants at the
time of the offering, 4,743,534 were converted and 1,581,150 common shares were
issued.
StarBase, with headquarters in Irvine, CA., offers a complete family of SCM
products designed to fill the needs of application and website development
teams. StarTeam has won several awards including PC Week Analyst's Choice
(10/96), PC Week 1996 IT Excellence Award (4/96) and PC Week LABS Top Product of
1995 (12/95). More information is available by calling 888-STAR700 or by website
at www.starbase.com.
When used in the preceding discussion, the words "believes, expects, or intend
to" and similar conditional expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties and
actual results could differ materially from those expressed in any of the
forward-looking statements. Such risks and uncertainties include, but are not
limited to, conditions in the general economy or the software industry, the
timely development and market acceptance of products and technologies,
competitive factors, demand for ITE software products, sell-through of products
in the sales channels and other risks described in StarBase Corporation's SEC
reports and filings.
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<PAGE>
Exhibit 99.2
[STARBASE LOGO]
STARBASE
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
William R. Stow III Donald R. Farrow Rebecca Bergman
Chairman & CEO President & COO General Information
(714) 442-4410 (714) 442-4425 11611 San Vicente Blvd., #700
Los Angeles, CA 90049
(310) 442-0599
_______________________________________________________________________________
FOR IMMEDIATE RELEASE
SEPTEMBER 9, 1997
STARBASE CORPORATION COMPLETES $1.6 MILLION IN PRIVATE PLACEMENT DEBENTURES
IRVINE, CALIFORNIA - SEPTEMBER 9, 1997 - StarBase Corporation (NASDAQ: SBAS)
today announced that it has completed a $1,600,000 private placement of its 6%
Convertible Debentures with several investors, including investors in previous
private placements. In addition, the Company issued 42,667 warrants to the
purchasers of the Debentures to acquire the Company's common stock. The
placement was made pursuant to Regulation D of the Securities Act of 1933, as
amended.
The Company recently announced a separate placement of two tranches of the
Debentures totaling $3,000,000. The first of the tranches, totaling $1,500,000,
was issued on August 18.
StarBase, with headquarters in Irvine, CA., offers a complete family of SCM
products designed to fill the needs of application and website development
teams. StarTeam has won several awards including PC Week Analyst's Choice
(10/96), PC Week 1996 IT Excellence Award (4/96) and PC Week LABS Top Product of
1995 (12/95). More information is available by calling 888-STAR700 or by website
at www.starbase.com.
# # #
