EX-10.4 5 a4845871ex104.txt EXHIBIT 10.4 Exhibit 10.4 Date: November 15, 2004 To: Aegis Assessments, Inc. From: Cogent Capital Corp. SUBJECT: EQUITY OPTION TRANSACTION ---------------------------------- The purpose of this communication is to set forth the terms and conditions of the Call Option transaction entered into on the Trade Date referred to below (the "Option Transaction"), between Cogent Capital Corp., a Utah corporation ("Cogent" or "we") and Aegis Assessments, Inc., a Utah corporation ("Aegis Assessments" or "you"). This communication constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. This Confirmation incorporates the definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions as published by the International Swap and Derivatives Association, Inc. (the "Equity Definitions"). In the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern. 1. This Confirmation will supplement, form a part of, and be subject to the ISDA Master Agreement dated as of November 15, 2004 between Aegis Assessments and Cogent (the "Master Agreement"). All provisions contained in, or incorporated by reference to, the Master Agreement shall govern this Confirmation except as expressly modified below. In the event of any inconsistency between the provisions of that Master Agreement and this Confirmation, this Confirmation shall prevail for the purpose of this Equity Option Transaction. In addition, this Confirmation shall itself evidence a complete and binding agreement between you and us as to the terms and conditions of the Equity Option Transaction to which this Confirmation relates. Cogent and Aegis Assessments each represents that entering into the Equity Transaction is authorized and does not violate any laws of its jurisdiction of organization or residence or the terms of any agreement to which it is a party. Cogent and Aegis Assessments each represents that (i) it is not relying on the other party in connection with its decision to enter into this Option Transaction, and neither party is acting as an advisor or fiduciary of the other party in connection with this Option Transaction regardless of whether the other party provides it with market information or its views; (ii) it understands the risks of the Option Transaction and any legal, regulatory, tax, accounting and economic consequences resulting therefrom; and (iii) it has determined based upon its own judgment and upon any advice received from its own professional advisors as it has deemed necessary to consult that entering into the Option Transaction is appropriate for such party in light of its financial capabilities and objectives. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: General Terms: Trade Date: November 15, 2004 1 Option Style: European Option Type: Call Seller: Cogent Buyer: Aegis Assessments Shares: Aegis Assessments, Inc. common shares ("AEGIS ASSESSMENTS") CUSIP number ____________ Number of Options: 3,200,000 Option Entitlement: 1 Share per Option Strike Price: The "Strike Price" shall equal the average of the Relevant Prices for the Averaging Dates relating to that Expiration Date. Averaging Dates: The ten trading days up to and including that Expiration Date Averaging Date Disruption: Modified Postponement Relevant Price: For each Averaging Date, the average of the bid and ask price per Share as determined by the Calculation Agent at the Valuation Time on that Averaging Date. Valuation Time: The closing time on the Exchange Premium: $1 Premium Payment Date: Trade Date Exchange: All Exchanges Related Exchange(s): All Exchanges Clearance System(s): DTC or Physical Certificate(s) Knock-in Event: Applicable. The "Knock-in Event" shall occur at the time that the disbursements contemplated by Section 2 of the Escrow Agreement (as defined in the Schedule to the Master Agreement) have been completed, but only if such disbursements are completed on or before the Knock-in Determination Day. Knock-in Determination Day(s): November 30, 2004 Procedures for Exercise: Latest Exercise Time: Notice given 12:00 noon, New York time, September 29, 2006 2 Expiration Time: The official closing time on the Exchange Expiration Date: November 15, 2006 Multiple Exercise: Not Applicable Automatic Exercise: Not Applicable Minimum Number of Options: The Number of Options. As a result, this Option may only be exercised in whole, and not in part. Seller's Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of giving Notice: Telephone: 801-523-6063 Facsimile: 801-576-0583 Settlement Terms: Physical Settlement: Applicable. Certificates with standard Rule 144 transfer restrictions may be used for good delivery. Settlement Currency: USD Settlement Method Election: Not Applicable Default Settlement Method: Physical Settlement Adjustments: Method of Adjustment: Calculation Agent Adjustment Options Exchange: Related Exchange Extraordinary Events: Consequences of Merger Events: Share-for-Share: Calculation Agent Adjustment Share-for-Other: Calculation Agent Adjustment Share-for-Combined: Calculation Agent Adjustment Tender Offer: Applicable Consequences of Tender Offers: Share-for-Share: Calculation Agent Adjustment Share-for-Other: Calculation Agent Adjustment 3 Share-for-Combined: Calculation Agent Adjustment Composition of Combined Consideration: Applicable Nationalization, Insolvency or Delisting: Negotiated Close-Out Additional Disruption Events: Change in Law: Applicable Failure to Deliver: Applicable Insolvency Filing: Applicable Determining Party: Cogent Non-Reliance: Applicable 4. Calculation Agent: Cogent 5. Account Details: Account for payments to Cogent: To be provided. Account for payments to Aegis Assessments To be provided. Account for delivery of Shares to Aegis Assessments: To be provided. 6. Relationship between the parties: (a) Except as expressly provided herein, each party acknowledges that in connection with entering into this Transaction, it has not entered into any agreements, arrangements or understandings with the other party or any related entity of such party in relation to timing or manner of any acquisition or disposal of any Shares, the voting rights attaching to any Shares or the management of the Issuer. 4 7. Governing Law: the laws of the State of New York (without reference to choice of law doctrine). Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us or by sending to us a letter or telex substantially similar to this letter, which letter or telex sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms. Yours sincerely, Cogent Capital Corp. By: /s/Gregory L. Kofford ---------------------------- Gregory L. Kofford President Confirmed as of the date first above written: Aegis Assessments, Inc. By: /s/Eric D. Johnson ------------------ Eric D. Johnson CEO 5