THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS. NEITHER
THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE
SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER PROVISIONS OF THE SECURITIES
ACT AND ALL APPLICABLE STATE SECURITIES LAWS, AND IN THE CASE OF ANY EXEMPTION,
ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE
WARRANT OR SUCH OTHER SECURITIES.
WARRANT
Warrant to Purchase _____ Shares of
Warrant No. ___ Common Stock
AUGMENT SYSTEMS, INC.
THIS CERTIFIES that for good and valuable consideration received,
__________ (the "Holder"), is entitled to subscribe for and purchase from
AUGMENT SYSTEMS, INC., a Delaware corporation (the "Company"), subject to the
terms and conditions set forth below, at any time or from time to time on or
after the date hereof and prior to 5:00 P.M., Boston, Massachusetts time on the
fifth anniversary of the date of this Warrant (the "Expiration Date"), such
five-year period being the "Exercise Period," _________ shares of Common Stock,
$.01 par value per share, of the Company (the "Common Stock"), subject to
adjustment as provided for herein (the "Warrant Shares"), at a price of $0.40
per share, subject to adjustment as provided for herein (as so adjusted, the
"Exercise Price"). This Warrant shall not be redeemable by the Company. The term
"Shares" as used herein shall mean the Company's shares of Common Stock.
Section 1. EXERCISE OF WARRANT
1.1 METHOD OF EXERCISE. This Warrant may be exercised by Holder, in
whole or in part, at any time, and from time to time, prior to the Expiration
Date by surrender of this Warrant, together with (i) the form of subscription at
the end hereof duly executed by Holder, to the Company at its principal office,
and (ii) (a) payment, by certified or official bank check payable to the order
of the Company or by wire transfer to its account, in the amount obtained by
multiplying the number of Warrant Shares for which the Warrant is then being
exercised by the Exercise Price then in effect, or (b) Non-Cash Exercise Payment
as provided for in Section 1.2 below. Whenever the Exercise Price is adjusted
pursuant to Section 2, the number of Warrant Shares shall be adjusted by
multiplying such number of Warrant Shares immediately prior to such adjustment
by a fraction, the numerator of which is the Exercise Price prior to such
adjustment and the denominator of which is the Exercise Price after such
adjustment. In the event the Warrant is not exercised in full, the Company, at
its expense, shall forthwith issue and deliver to or upon the order of Holder a
new Warrant of like tenor in the name of Holder or as Holder (upon payment by
Holder of any applicable transfer taxes) may request, calling in the aggregate
on the face thereof for the number of shares of Common Stock equal (without
giving effect to any adjustment therein) to (i) the number of such shares called
for on the face of this
1
Warrant minus (ii) the number of such shares for which this Warrant shall have
been exercised, whether in cash or pursuant to a Non-Cash Exercise Payment.
1.2 NON-CASH EXERCISE PAYMENT. In lieu of the cash payment of the
Exercise Price, the Holder shall have the right (but not the obligation), during
the Exercise Period, to require the Company to convert this Warrant, in whole or
in part, into the Warrant Shares as provided for in this Section (the
"Conversion Right"). Upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of the Exercise Price) that
number of shares of Common Stock equal to (i) the number of Warrant Shares
issuable upon exercise of the portion of the Warrant being converted, multiplied
by (ii) the quotient obtained by dividing (x) the value of the Warrant (on a per
Warrant Share basis) at the time the Conversion Right is exercised (determined
by subtracting the Exercise Price from the Current Market Price (as determined
pursuant to Section 2.4 below), for the shares of Common Stock issuable upon
exercise of the Warrant immediately prior to the exercise of the Conversion
Right) by (y) the Current Market Price of one share of Common Stock immediately
prior to the exercise of the Conversion Right. The Conversion Rights provided
under this Section may be exercised in whole or in part and at any time, and
from time to time, while any Warrants remain outstanding. In order to exercise
the Conversion Right, the Holder shall surrender to the Company, at its offices,
this Warrant accompanied by a duly completed Conversion Notice in the form
attached hereto. The presentation and surrender shall be deemed a waiver of the
Holder's obligations to pay all or any portion of the aggregate purchase price
payable for the Warrant Shares being issued upon such exercise of this Warrant.
This Warrant (or so much thereof as shall have been surrendered for conversion)
shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of this Warrant for conversion in accordance
with the foregoing provisions. As promptly as practicable on or after the
conversion date, the Company shall issue and shall deliver to the Holder (i) a
certificate or certificates representing the largest number of whole Warrant
Shares which the Holder shall be entitled as a result of the conversion, and
(ii) if such Warrant is being converted in part only, a new Warrant exercisable
for the number of Warrant Shares equal to the unconverted portion of the
Warrant. Upon any exercise (which term, as used herein, shall include any
exercise of the Conversion Right) of this Warrant, in lieu of any fractional
Warrant Shares to which the Holder shall be entitled, the Company shall pay to
the Holder cash in accordance with the provisions of Section 1.4 hereof.
1.3 DELIVERY OF STOCK CERTIFICATES. Subject to the terms and conditions
of this Warrant, the Holder shall, as of the close of business on the day of the
exercise of the Holder's rights to purchase Warrant Shares, be deemed to be the
holder of record of the Warrant Shares issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
certificates representing such Warrant Shares shall not then have been actually
delivered to the Holder. As soon as practicable after each such exercise of this
Warrant, the Company shall issue and deliver to the Holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or its designee. If this Warrant should be exercised in
part only, upon surrender of this Warrant for cancellation, the Company shall
execute and deliver a new Warrant evidencing the right of the Holder to purchase
the balance of the Warrant Shares (or portions thereof) subject to purchase
hereunder.
1.4 FRACTIONAL SHARES. This Warrant may not be exercised as to
fractional shares of Common Stock. In the event that the exercise of this
Warrant, in full or in part, would result in the issuance of any fractional
shares of Common Stock, then in such event the Holder shall be
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entitled to cash equal to the Current Market Price (as defined in Section 2.4)
of such fractional shares.
1.5 RECORDING OF TRANSFER. Any warrants issued upon the transfer or
exercise in part of this Warrant shall be numbered and shall be registered in a
Warrant Register as they are issued. The Company shall be entitled to treat the
registered holder of any Warrant on the Warrant Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person, and
shall not be liable for any registration or transfer of warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his or its duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. In all cases of transfer by an attorney,
executor, administrator, guardian or other legal representative, duly
authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new warrant or warrants to
the person entitled thereto. This Warrant may be exchanged, at the option of the
Holder hereof, for another warrant, or other warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares (or portions thereof), upon surrender
to the Company or its duly authorized agent. Notwithstanding the foregoing, the
Company shall have no obligation to cause this Warrant to be transferred on its
books to any person if counsel to the Company reasonably requests a legal
opinion that such transfer does not violate the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder, unless such
opinion is delivered.
Section 2. ADJUSTMENT OF EXERCISE PRICE.
2.1 ADJUSTMENT FOR STOCK DIVIDENDS. In case the Company shall at any
time after the date hereof (i) declare a dividend or make any other distribution
on the outstanding Shares in shares of its capital stock or securities
convertible into or exchangeable for capital stock, (ii) subdivide the
outstanding Shares, (iii) combine the outstanding Shares into a smaller number
of shares, or (iv) issue any shares by reclassification of the Shares (other
than a change in par value, or from par value to no par value, or from no par
value to par value), then, in each case, the Exercise Price in effect, and the
number of Shares issuable upon exercise of the Warrants outstanding, at the time
of the record date for such dividend or at the effective date of such
subdivision, combination or reclassification, shall be proportionately adjusted
so that the Holders of the Warrants after such time shall be entitled to receive
upon exercise of the Warrant the aggregate number and kind of shares which, if
such Warrants had been exercised immediately prior to such time, such Holders
would have owned upon such exercise and immediately thereafter been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
2.2 OTHER ADJUSTMENTS. In case the Company shall distribute to all
holders of Shares (including any such distribution made to the stockholders of
the Company in connection with a consolidation or merger in which the Company is
the surviving or continuing corporation)
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evidences of its indebtedness, cash, or assets (other than distributions and
dividends payable as contemplated by Section 2.1 above), or rights, options, or
warrants to subscribe for or purchase Shares or securities convertible into or
exchangeable for Shares, then, in each case, the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for the determination of stockholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current Market
Price (as determined pursuant to Section 2.5 hereof) per Share on such record
date, less the fair-market value (as determined in good faith by the board of
directors of the Company, whose determination shall be conclusive absent
manifest error) of the portion of the evidences of indebtedness or assets so to
be distributed, or of such rights, option, or warrants or convertible or
exchangeable securities, or the amount of such cash, applicable to one share,
and the denominator of which shall be such Current Market Price per Share. Such
adjustment shall become effective at the close of business on such record date.
2.3 Issuances of Additional Common Stock and Other Securities.
----------------------------------------------------------
(a) In the event that the Company shall issue or sell additional
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
additional shares of Common Stock at a price per share lower than the Exercise
Price in effect on the date of such issuance or sale, or if the Company shall
amend the provisions of any rights, options, warrants or convertible or
exchangeable securities such as to reduce the price per share applicable
thereto, then the Exercise Price in effect immediately after such event shall be
adjusted by multiplying the Exercise Price in effect immediately prior to such
event by a fraction (a) the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding immediately prior to such event
plus (ii) the number of shares of Common Stock that the aggregate consideration
received in respect of such additional shares of Common Stock or other
securities so offered would purchase divided by such Exercise Price, and (b) the
denominator of which shall be the sum of (i) the number of shares of Common
Stock outstanding immediately prior to such event plus (ii) the number of
additional shares of Common Stock so issued or sold (or initially issuable
pursuant to such rights, options or warrants or into which such convertible or
exchangeable securities are initially convertible or exchangeable).
(b) In the event that the Company shall issue and sell additional
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
additional shares of Common Stock, for consideration consisting, in whole or in
part, of property other than cash or its equivalent, then in determining the
aggregate consideration received, the Board of Directors shall determine, in
good faith and on a reasonable basis, the fair value of such property, and such
determination, if so made, shall be binding upon the Holder. In the event that
the Company shall issue and sell additional shares of Common Stock, or rights,
options, warrants or convertible or exchangeable securities containing the right
to subscribe for or purchase additional shares of Common Stock, together with
other debt or equity securities for a fixed amount of cash or other
consideration for all such securities being then issued and sold, the
consideration received by the Company in respect of such additional shares of
Common Stock, or rights, options, warrants or convertible or exchangeable
securities, for purposes of computing the aggregate consideration received,
shall equal that portion of the total consideration allocable to the purchase of
such additional shares of Common Stock, or rights, options, warrants or
convertible or exchangeable securities; PROVIDED, HOWEVER, that if the aggregate
consideration received in respect of such additional shares of
4
Common Stock, or rights, options, warrants or convertible or exchangeable
securities and all such other securities then being issued and sold shall equal
or exceed the aggregate Fair Market Value of all such additional shares of
Common Stock, or rights, options, warrants or convertible or exchangeable
securities and all such other securities then being issued and sold, then no
adjustment shall be made to the Exercise Price pursuant to this Section 2.3.
2.4 COMPUTATION OF ADJUSTED EXERCISE PRICE. Whenever the Exercise
Price is adjusted as provided in this Section 2:
(a) the Company shall compute the adjusted Exercise Price to the
nearest one-hundredth of a cent in accordance with this Section 2 and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted Purchase Price and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate shall
forthwith be filed at the office maintained pursuant to Section 4.3;
(b) a notice stating that the Exercise Price has been adjusted and
setting forth the adjusted Exercise Price shall, as soon as practicable after it
is required, be mailed to Holder; and at its option, Holder may confirm the
adjustment noted on the certificate by causing such adjustment to be computed by
an independent certified public accountant at the expense of the Company.
2.5 CURRENT MARKET PRICE. The Current Market Price per Share on any
date shall be deemed to be the average of the daily closing prices for the five
(5) consecutive trading days immediately preceding the date in question. The
closing price for each day shall be the last reported sales price preceding the
date in question. The closing price for each day shall be the last reported
sales price regular way or, in case no such reported sale takes place on such
day, the closing bid regular price regular way, in either case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price for the Common
Stock as furnished by the National Association of Securities Dealers, Inc.
through NASDAQ or a similar organization if NASDAQ is no longer reporting such
information. If on any such date the Common Stock is not listed or admitted to
trading on any national securities exchange and is not quoted by NASDAQ on any
similar organization, the fair value of a share of Common Stock on such date, as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error, shall be used.
2.6 MINIMUM ADJUSTMENT; LIMITATION. No adjustment in the Exercise Price
shall be required under this Section 2 unless such adjustment would require an
increase or decrease of at least $.01 in such price; provided, however, that any
adjustments that by reason of this Section 2.6 are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 2 shall be made to the nearest one-hundredth of
a cent or to the nearest one-hundredth of a share as the case may be.
Notwithstanding the foregoing provision of this Section 2, in no event shall the
Purchase Price be reduced below the minimum amount for which the Common Stock
may lawfully be issued pursuant to applicable laws and regulations; provided,
however, that upon the occurrence of any event that would, but for the foregoing
limitation, give rise to an adjustment of the Purchase Price pursuant to this
Section 2, solely for purposes of determining the Warrant Number pursuant to
Section 1 above,
5
the Purchase Price shall be given effect as if adjusted to the full extent
provided for in this Section 2, without regard to the limitation set forth in
this sentence.
2.7 ISSUANCE OF EQUITY SECURITIES NOT REQUIRING ADJUSTMENT.
Notwithstanding anything to the contrary contained herein, no adjustments shall
be made under this Section 2 as a result of any issuance of any equity security
by the Company (i) in connection with any obligations of the Company to issue
such equity securities that are in effect as of the date of this Warrant, or
(ii) upon the conversion, exchange, exercise of any stock option, warrant,
preferred stock or any other security or right outstanding as of the date of
this Warrant that is convertible, into exchangeable for, or exercisable to
purchase, directly or indirectly, shares of Common Stock.
Section 3. CONSOLIDATIONS AND MERGERS.
3.1 In case of any consolidation with or merger of the Company with or
into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation and which does not result in
any reclassification of the outstanding Shares or the conversion of such
outstanding Shares into shares of other stock or other securities or property),
or in case of any sale, lease or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety (such additions being hereinafter collectively referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of this
Warrant (in lieu of the number of Shares theretofore deliverable) the kind and
amount of shares of stock or other securities, cash or other property which
would otherwise have been deliverable to a holder of the number of Shares
issuable upon the exercise of this Warrant upon such Reorganization if this
Warrant had been exercised in full immediately prior to such Reorganization. In
case of any Reorganization, appropriate adjustment, as determined in good faith
by the Board of Directors of the Company, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any shares or other property thereafter
deliverable upon exercise of this Warrant. Any such adjustment shall be made by
and set forth in a supplemental agreement between the Company, or any successor
thereto, and the Holder and shall for all purposes hereof conclusively be deemed
to be an appropriate adjustment. The Company shall not effect any such
Reorganization unless upon or prior to the consummation thereof the successor
corporation, or if the Company shall be the surviving corporation in any such
Reorganization and is not the issuer of the shares of stock or other securities
or property to be delivered to holders of Shares outstanding at the effective
time thereof, then such issuer shall assume by written instrument the obligation
to deliver to the Holder such shares of stock, securities, cash or other
property as the Holder shall be entitled to purchase in accordance with the
foregoing provisions.
3.2 In case of any reclassification or change of the Shares issuable
upon exercise of this Warrant (other than a change in par value or from no par
value to a specified par value, or as a result of a subdivision or combination,
but including any change in the Shares into two or more classes or series of
shares), or in case of any consolidation or merger of another corporation into
the Company in which the Company is the continuing corporation and in which
there is a reclassification or change (including a change to the right to
receive cash or other property) of the Shares (other than a change in par value,
or from no par value to a specified par value, or as a result of a subdivision
or combination, but including any change in the Shares into two or more
6
classes or series of shares), the Holder shall have the right thereafter to
receive upon exercise of this Warrant solely the kind and amount of shares of
stock and other securities, property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by a holder of the
number of Shares for which this Warrant might have been exercised immediately
prior to such reclassification, change, consolidation or merger. Thereafter,
appropriate provision shall be made for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 2.
3.3 The above provisions to this Section 3 shall similarly apply to
successive reclassifications and changes of Shares and to successive
consolidations, mergers, sales, leases or conveyances.
Section 4. CERTAIN OBLIGATIONS OF THE COMPANY. Until the earlier to occur
of (i) the Expiration Date or (ii) the exercise in full of the Warrant:
4.1 RESERVATION OF STOCK. The Company covenants that it will at all
times reserve and keep available out of its authorized and unissued Common Stock
or out of shares of its treasury stock, solely for the purpose of issue upon
exercise of the purchase rights evidenced by this Warrant, a number of shares of
Common Stock equal to the number of shares of Common Stock issuable hereunder.
The Company will from time to time, in accordance with the laws of the State of
Delaware, take action to increase the authorized amount of its Common Stock if
at any time the number of shares of Common Stock authorized but remaining
unissued and unreserved for other purposes shall be insufficient to permit the
exercise of this Warrant.
4.2 NO VALUATION OR IMPAIRMENT. The Company will not, by amendment of
its Certificate of Incorporation, including, without limitation, amendment of
the par value of its Common Stock, or through reorganization, consolidation,
merger, dissolution, issuance of capital stock or sale of treasury stock
(otherwise than upon exercise of this Warrant) or sale of assets, by effecting
any subdivision of or stock split or stock dividend with respect to its Common
Stock, or by any other voluntary act or deed, avoid or seek to avoid the
material performance or observance of any of the covenants, stipulations or
conditions in this Warrant to be observed or performed by the Company. The
Company will at all times in good faith assist, insofar as it is able, in the
carrying out of all of the provisions of this Warrant in a reasonable manner and
in the taking of all other action that may be necessary in order to protect the
rights of the holder of this Warrant against dilution in the manner required by
the provisions of this Warrant.
4.3 MAINTENANCE OF OFFICE. The Company will maintain an office where
presentations and demands to or upon the Company in respect of this Warrant may
be made. The Company will give notice in writing to Holder, at the address of
Holder appearing on the books of the Company, of each change in the location of
such office.
Section 5. CERTAIN EVENTS. In case at any time any of the following occur:
(a) the Company shall take a record of the holders of its Shares for
the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of current and retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or
7
(b) the Company shall offer to all the holders of its Shares any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(c) the Company shall take any action to effect any reclassification or
change of outstanding shares or any consolidation, merger, sale, lease or
conveyance of property, described in Section 3; or
(d) the Company shall take any action to effect any liquidation,
dissolution or winding-up of the Company or a sale of all or substantially all
of its property, assets and business; THEN, and in any one or more of such
cases, the Company shall give written notice thereof, by registered mail,
postage prepaid, to the Holder at the Holder's address as it shall appear in the
Warrant Register, mailed at least fifteen (15) days prior to (i) the date as of
which the holders of record of Shares to be entitled to receive any such
dividend, distribution, rights, warrants or other securities are to be
determined, (ii) the date on which any such offer to holders of Shares is made,
or (iii) the date on which any such reclassification, change of outstanding
Shares, consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up is expected to become effective and the date as of
which it is expected that holders of record of Shares shall be entitled to
exchange their shares for securities or other property, if any, deliverable upon
such reclassification, change of outstanding shares, consolidation, merger,
sale, lease, conveyance of property, liquidation, dissolution or winding-up.
Nothing herein shall allow a Holder to delay or prevent any of the foregoing
actions.
Section 6. COMPLIANCE WITH THE SECURITIES ACT; REGISTRATION RIGHTS; REDEMPTION;
TRANSFERABILITY.
6.1 COMPLIANCE WITH THE SECURITIES ACT. The Holder acknowledges that
neither this Warrant nor the shares of Common Stock issuable upon exercise of
this Warrant have been registered under the Securities Act and applicable state
securities laws and agrees that this Warrant and all shares purchased upon
exercise hereof shall be disposed of only in accordance with the Securities Act
and applicable states securities laws and the rules and regulations of the SEC
promulgated thereunder and applicable state securities laws.
6.2 REGISTRATION RIGHTS. The Holder shall be entitled, with respect to
the Warrant Shares, to the same registration rights and the rights included
therein, subject to the same obligations, as a purchaser of units of the Company
is entitled and subject to pursuant to Section 6 of that certain Subscription
Agreement by and between the Company and the Holder, dated even date herewith
(the "Subscription Agreement"). The Company acknowledges that the Holder is a
"Purchaser" and that the Warrant Shares are "Registrable Securities," as such
terms are defined in Section 6.1 of the Subscription Agreement.
Section 7. TAXES. The issuance of any Shares or other securities upon the
exercise of this Warrant and the delivery of certificates or other instruments
representing such Shares or other securities shall be made without charge to the
Holder for any tax or other charge in respect of such issuance. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of any certificate in a name
8
other than that of the Holder (except for any tax that is payable in respect of
any such transfer and any related exercise of this Warrant and that would be
payable pursuant to the first sentence of this Section 7 were such certificate
to be issued in the name of the Holder) and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
Section 8. LEGEND. Unless registered pursuant to the provisions of Section
6 hereof, the certificate or certificates evidencing the Warrant Shares shall
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR STATE SECURITIES LAWS, BUT HAVE BEEN
ISSUED OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQURIEMENTS OF THE ACT. NO DISTRIBUTION, SALE,
OFFER FOR SALE, TRANSFER, DELIVERY, PLEDGE, OR OTHER
DISPOSITION OF THESE SECURITIES MAY BE EFFECTED EXCEPT IN
COMPLIANCE WITH THE ACT, ANY APPLICABLE STATE LAWS, AND THE
RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION AND STATE AGENCIES PROMULGATED THEREUNDER."
If after the Warrant Shares are registered pursuant to Section 6 hereof, the
Holder wishes to have the original legend removed, then, unless the Warrant
Shares are registered pursuant to the provisions of Section 6.2 hereof (in which
case no legend shall be required), the certificate or certificates evidencing
the Warrant Shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. HOWEVER, SUCH SHARES MAY NOT BE
OFFERED OR SOLD EXCEPT PURUANT TO (i) A POST-EFFECTIVE
AMENDMENT TO SUCH REGISTRATION STATEMENT, UNLESS COUNSEL OF
COMPANY ADVISES IN WRITING THAT SUCH POST-EFFECTIVE AMENDMENT
IS NOT REQUIRED, IN WHICH EVENT SUCH SHARES MAY BE OFFERED
PURSUANT TO THE ORIGINAL REGISTRATION STATEMENT PURSUANT TO
WHICH THESE SHARES HAVE BEEN REGISTERED, (ii) A SEPARATE
REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT.
9
Section 9. REPLACEMENT OF WARRANTS. Upon (a) surrender of this Warrant in
mutilated form or receipt of evidence satisfactory to the Company of the loss,
theft or destruction of this Warrant and (b) in the case of any loss, theft or
destruction of any Warrant, receipt of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company, then in the absence
of actual notice to the Company that this Warrant has been acquired by a bona
fide purchaser, the Company, at its expense, shall execute and deliver, in lieu
of this Warrant, a new Warrant identical in form to this Warrant.
Section 10. NO RIGHTS AS STOCKHOLDER. The Holder of any Warrant shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of stockholders or of
any other proceedings of the Company, except as provided in this Warrant.
Section 11. REMEDIES. The Company stipulates that the remedies at law of the
Holder in the event of any breach or threatened breach by the Company of the
terms of this Warrant are not and will not be adequate, and that such terms may
be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a breach of any of the
terms hereof or otherwise.
Section 12. TRANSFER. This Warrant and the shares of Common Stock issuable
hereunder shall not be sold, transferred, pledged or hypothecated unless the
proposed disposition is the subject of a currently effective registration
statement under the Securities Act or unless the Company has received an opinion
of counsel, in form and substance reasonably satisfactory to the Company, to the
effect that such registration is not required in connection with such
disposition. In the case of such a sale, transfer, pledge or hypothecation, or
in the event of the exercise hereof if the Warrant Stock so acquired is not
registered under the Securities Act, the Company may require a written statement
that the Warrant or Warrant Stock, as the case may be, are being acquired for
investment and not with a view to the distribution thereof, and any certificate
representing Warrant Stock issued pursuant to such exercise shall bear a legend
in substantially the form set forth on the face hereof. Subject to the first two
sentences of this Section, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
registered holder thereof in person or by a duly authorized attorney, upon
surrender of this Warrant together with an assignment hereof properly endorsed.
Until transfer hereof on the registration books of the Company, the Company may
treat the existing registered holder hereof as the owner hereof for all
purposes. Any transferee of this Warrant and any rights hereunder, by acceptance
thereof, agrees to assume all of the obligations of Holder and to be bound by
all of the terms and provisions of this Warrant.
Section 13. NOTICES. Where this Warrant provides for notice of any event, such
notice shall be given (unless otherwise herein expressly provided) in writing
and either (i) delivered personally, (ii) sent by certified, registered or
express mail, postage prepaid, (iii) telegraphed or (iv) telexed or sent by
facsimile transmission, and shall be deemed given when so delivered personally,
telegraphed, telexed, sent by facsimile transmission (confirmed in writing) or
mailed. Notices shall be addressed, if to the Holder, to the address of Holder
at such Holder's address as it appears in the records of the Company, or if to
the Company, to its office maintained pursuant to Section 4.3.
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Section 14. SURVIVAL. The provisions of Section 4 and Section 6.2 shall survive
the termination of this Warrant upon exercise in full, but shall terminate in
any event on the Expiration Date.
Section 15. MISCELLANEOUS. This Warrant shall be binding upon the Company and
Holder and their legal representatives, successors and assigns. In case any
provision of this Warrant shall be invalid, illegal or unenforceable, or
partially invalid, illegal or unenforceable, the provision shall be enforced to
the extent, if any, that it may be legally enforced and the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by a statement in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
principles of conflicts of laws. The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof. This Warrant shall take effect as an instrument under seal.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer and its corporate seal to be impressed hereon and
attested by its Secretary or Assistant Secretary.
Dated as of _____________, 1998 AUGMENT SYSTEMS, INC.
(Corporate Seal) Name:______________________
Title:_____________________
Attest:
________________________________
Secretary
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FORM OF CASH EXERCISE
TO: Augment Systems, Inc.
The undersigned hereby exercise its rights to purchase __________
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $__________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:__________________ Name:______________________________
(Print)
____________________________________________
(Signature)
(Signature must conform to the name of the
Warrant Holder specified on the face of the
Warrant)
Address:________________
CASHLESS EXERCISE FORM
(To be executed upon conversion of the attached Warrant)
TO: Augment Systems, Inc.
The undersigned hereby irrevocably elects to surrender its Warrant for
the number of Warrant Shares a shall be issuable pursuant to the cashless
exercise provisions of Section 1.2 of the within Warrant, in respect of
__________ Warrant Shares underlying the within Warrant, and requests that
certificates for such Warrant Shares be issued in the name of and delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the shares exchangeable
or purchasable under the within Warrant, that a new Warrant for the balance of
the Warrant Shares covered by the within Warrant be registered in the name of,
and delivered to, the undersigned at the address stated below:
Dated:__________________ Name:______________________________
(Print)
____________________________________________
(Signature)
(Signature must conform to the name of the
Warrant Holder specified on the face of the
Warrant)
Address:________________
FORM OF ASSIGNMENT
(To be executed solely by the registered holder
if such holder desires to transfer the attached Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto _________________________ having an address at
__________________________, the attached Warrant to the extent the right to
purchase __________ shares of Common Stock, $.01 par value per share, of AUGMENT
SYSTEMS, INC. (the "Company"), together with all right, title and interest
therein, and does irrevocably constitute and appoint _________________________
as attorney to transfer such Warrant on the books of the Company, with full
power of substitution.
Dated:_________________ __________________________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Signed in the presence of:
_____________________________________
