WARRANT AGREEMENT
Agreement made as of ___________ __, 1997, between Augment Systems,
Inc., a Delaware corporation with offices at 0 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxxxx 00000 ("Company"), and Continental Stock Transfer & Trust Company,
a New York corporation with offices at 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, a
New York corporation, (herein called "Warrant Agent").
WHEREAS, the Company is engaged in a public offering of Common Stock
and Warrants ("Public Offering") and in connection therewith, has determined to
issue and deliver up to (i) 2,070,000 (including up to 270,000 that may be
issued pursuant to the Underwriters' over-allotment option) Redeemable Common
Stock Purchase Warrants ("Public Warrants") to the public investors and (ii) an
aggregate of 180,000 Warrants to GKN Securities Corp. ("GKN") and/or Xxxxxxx
Equities, Inc. ("Xxxxxxx," and together with GKN, the "Underwriters") or their
respective designees ("Underwriters' Warrants" and together with the Public
Warrants, the "Warrant(s)"), each of such Warrants evidencing the right of the
holder thereof to purchase one share of the Company's common stock, $.01 par
value per share ("Common Stock"), for $6.60; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission a Registration Statement, No. 333-21401 on Form SB-2 ("Registration
Statement"), for the registration under the Securities Act of 1933, as amended,
of, among others, the Warrants and the Common Stock issuable upon exercise of
the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of
the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act as agent for the Company for the Warrants, and the Warrant Agent hereby
accepts such appointment and agrees to perform the same in accordance with the
terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form of Warrant. Each Warrant certificate shall be issued in
registered form only, shall be in substantially the form of Exhibit A hereto,
the provisions of which are incorporated herein and shall be signed by, or bear
the facsimile signature of, the Chairman of the Board or President and Secretary
or Assistant Secretary of the Company and shall bear a facsimile of the
Company's
seal. In the event the person whose facsimile signature has been placed upon any
Warrant certificate shall have ceased to be Chairman of the Board or President
and Secretary or Assistant Secretary of the Company before such Warrant
certificate is issued, it may be issued with the same effect as if he had not
ceased to be such at the date of issuance. The Warrants represented by a Warrant
certificate may not be exercised until such certificate has been countersigned
by the Warrant Agent as provided in Section 2.3 hereof.
2.2 Effect of Countersignature. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid
and of no effect.
2.3 Events for Countersignature. The Warrant Agent shall countersign a
Warrant certificate only upon the occurrence of either of the following events:
(a) if the Warrant certificate is to be issued in exchange or
substitution for one or more previously countersigned Warrant certificates, as
hereinafter provided, or
(b) if the Company instructs the Warrant Agent to do so.
2.4 Registration.
2.4.1 Warrant Register. The Warrant Agent shall maintain books
("Warrant Register"), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2 Registered Holder. Prior to due presentment for
registration of transfer of any Warrant certificate, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant certificate shall
be registered upon the Warrant Register ("registered holder"), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant certificate made by
anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
3. Terms and Exercise of Warrants
3.1 Warrant Price. Each Warrant certificate shall, when countersigned
by the Warrant Agent, entitle the registered holder thereof, subject to the
provisions of such Warrant certificate and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock stated therein,
at the price of $6.00 per whole share, subject to the adjustments provided in
Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement
refers to the price per share at which Common Stock may be purchased at the time
a Warrant is exercised.
3.2 Duration of Warrants. Subject to Section 3.3.6 hereof, a Warrant
may be exercised only during the period ("Exercise Period") commencing on
________ ___, 1998, and terminating on the earlier of December ___, 2002, or the
date fixed for redemption of the Warrant as provided in Section 6 of this
Agreement ("Expiration Date"). Each Warrant not exercised on or before its
expiration date shall become void, and all rights thereunder and all rights in
respect thereof under
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this Agreement shall cease at the close of business on its Expiration Date. The
Company in its sole discretion may extend the duration of the Warrants by
delaying the Expiration Date.
3.3 Exercise of Warrants.
3.3.1 Payment. A Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering the
certificate representing such Warrant, at the office of the Warrant Agent, or at
the office of its successor as Warrant Agent, in the Borough of Manhattan, City
and State of New York, with the subscription form, as set forth on the Warrant
certificate and in substantially the form of Exhibit A hereto, duly executed,
and by paying in full, in lawful money of the United States, in cash, good
certified check or bank draft payable to the order of the Company, the Warrant
Price for each full share of Common Stock as to which the Warrant is exercised
and any and all applicable taxes due in connection with the exercise of the
Warrant, the exchange of the Warrant for the Common Stock, and the issuance of
the Common Stock.
3.3.2 Issuance of Certificates. As soon as practicable after
the exercise of any Warrant and the clearance of the funds in payment of the
Warrant Price, the Company shall issue to the registered holder of such Warrant
a certificate or certificates for the number of full shares of Common Stock to
which he is entitled, registered in such name or names as may be directed by
him, and if such Warrant shall not have been exercised in full, a new
countersigned Warrant certificate for the number of shares as to which such
Warrant shall not have been exercised. Notwithstanding the foregoing, the
Company shall not be obligated to deliver any securities pursuant to the
exercise of a Warrant unless a registration statement under the Securities Act
of 1933 with respect to the securities is effective. Warrants may not be
exercised by, or securities issued to, any registered holder in any state in
which such exercise would be unlawful.
3.3.3 Valid Issuance. All shares of Common Stock issued upon
the proper exercise of a Warrant in conformity with this Agreement shall be
validly issued.
3.3.4 Date of Issuance. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant certificate was surrendered and payment of the Warrant Price was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
3.3.5 Warrant Solicitation and Warrant Solicitation Fee.
(a) The Company has engaged the Underwriters, on a
non-exclusive basis, as its agents for the solicitation of the exercise of the
Warrants. The Company, at its cost, will (i) assist the Underwriters with
respect to such solicitation, if requested by the Underwriters and (ii) provide
to the Underwriters, and direct the Company's transfer and warrant agent to
deliver to the Underwriters, lists of the record, and to the extent known,
beneficial owners of the Company's Warrants. Accordingly, the Company hereby
instructs the Warrant Agent to cooperate with the Underwriters in every respect
in connection with the Underwriters' solicitation activities, including, but not
limited to, providing to the Underwriters, at the Company's cost, a list of
record and beneficial holders of the Warrants and circulating a prospectus or
offering circular disclosing the
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compensation arrangements referenced in Section 3.3.5(b) hereinbelow to holders
of the Warrants at the time of exercise of the Warrants. In addition to the
conditions set forth in Section 3.3.5(b) hereinbelow, the Underwriters shall
accept payment of the warrant solicitation fee provided in Section 3.3.5(b) only
if they have provided bona fide services in connection with the exercise of the
Warrants. In addition to soliciting, either orally or in writing, the exercise
of Warrants by a Warrant holder, such services may also include disseminating
information, either orally or in writing, to Warrant holders about the Company
or the market for the Company's securities, or assisting in the processing of
the exercise of Warrants.
(b) In each instance in which a Warrant is exercised, the
Warrant Agent shall promptly give written notice of such exercise to the Company
and the Underwriters ("Warrant Agent's Exercise Notice"). If, upon the exercise
of any Warrant more than one year from the Effective Date, (i) the market price
of the Company's Common Stock is greater than the Warrant Price, (ii) disclosure
of compensation arrangements was made both at the time of the original offering
and at the time of exercise (by delivery of the Prospectus or as otherwise
required by applicable law, rule or regulation), (iii) the exercise of the
Warrant was solicited by one of the Underwriters, (iv) the Warrant was not held
in a discretionary account, and (v) the solicitation of the exercise of the
Warrant was not in violation of Regulation M (as such rule or any successor rule
may be in effect as of such time of exercise) promulgated under the Securities
Exchange Act of 1934, then the Warrant Agent, simultaneously with the
distribution of proceeds to the Company received upon exercise of the Warrant(s)
so exercised, shall, on behalf of the Company, pay from the proceeds received
upon exercise of the Warrant(s), a fee of 5% of the Warrant Price to the
respective Underwriters in accordance with their actual solicitation of a
Warrant holder, provided that either of the Underwriters deliver to the Warrant
Agent within ten (10) business days from the date on which the Underwriters
received the Warrant Agent's Exercise Notice, a certificate that the conditions
set forth in the preceding clauses (iii), (iv) and (v) have been satisfied. The
Underwriters and the Company may, at any time during business hours, examine the
records of the Warrant Agent, including its ledger of original Warrant
certificates returned to the Warrant Agent upon exercise of Warrants.
(c) The provisions of this Section 3.3.5. may not be modified,
amended or deleted without the prior written consent of the Underwriters.
4. Adjustments.
4.1 Stock Dividends - Split-Ups. If after the date hereof, and subject
to the provisions of Section 4.5 below, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common Stock
or by a split-up of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares issuable on exercise of each
Warrant shall be increased in proportion to such increase in outstanding shares
and the then applicable Warrant Price shall be correspondingly decreased.
4.2 Aggregation of Shares. If after the date hereof, and subject to the
provisions of Section 4.5, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
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4.3 Replacement of Securities Upon Reorganization, etc. If after the
date hereof any capital reorganization or reclassification of the Common Stock
of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation or other similar event shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger, or sale, lawful
and fair provision shall be made whereby the Warrant holders shall thereafter
have the right to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities, or
assets as may be issued or payable with respect to or in exchange for the number
of outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be in relation to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger, or sale unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing such
assets, shall assume by written instrument executed and delivered to the Warrant
Agent the obligation to deliver to the Warrant holders such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.
4.4 Notices of Changes in Warrant. Upon every adjustment of the Warrant
Price or the number of shares issuable on exercise of a Warrant, the Company
shall give written notice thereof to the Warrant Agent, which notice shall state
the Warrant Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Upon the occurrence of any event
specified in Sections 4.1., 4.2., or 4.3., then, in any such event, the Company
shall give written notice in the manner set forth above of the record date for
such dividend, distribution, or subscription rights, or the effective date of
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be entitled to exchange
their Common Stock for stock, securities, or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.
4.5 No Fractional Shares. Notwithstanding any provision contained in
this Warrant Agreement to the contrary, the Company shall not issue fractional
shares upon exercise of Warrants. If, by reason of any adjustment made pursuant
to this Section 4, the holder of any Warrant would be entitled, upon the
exercise of such Warrant, to receive a fractional interest in a share, the
number of shares of Common Stock to be received shall be rounded off to the
nearest whole number.
4.6 Form of Warrant. The form of Warrant need not be changed because of
any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the
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same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any
time in its sole discretion make any change in the form of Warrant that the
Company may deem appropriate and that does not affect the substance thereof, and
any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form as so
changed.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of a Warrant certificate for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant certificate
representing an equal aggregate number of Warrants shall be issued and the old
Warrant certificate shall be canceled by the Warrant Agent. The Warrant
certificate so canceled shall be delivered by the Warrant Agent to the Company
from time to time upon request.
5.2 Procedure for Surrender of Warrants. Warrant certificates may be
surrendered to the Warrant Agent, together with a written request for exchange,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new
Warrant certificates as requested by the registered holder of the Warrant
certificates so surrendered, representing an equal aggregate number of Warrants;
provided, however, that in the event that a Warrant certificate surrendered for
transfer bears a restrictive legend, the Warrant Agent shall not cancel such
Warrant certificate and issue new Warrant certificates in exchange therefor
until the Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the new Warrant
certificates must also bear a restrictive legend.
5.3 Fractional Warrants. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant. The number of
Warrants to be delivered shall be rounded off to the nearest whole number.
5.4 Service Charges. No service charge shall be made for any exchange
or registration of transfer of Warrants.
5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the provisions hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrant certificates duly executed on behalf of the Company for such
purpose.
6. Redemption.
6.1 Redemption. Not less than all of the outstanding Warrants may be
redeemed, at the option of the Company, after they become exercisable and prior
to the Expiration Date, at the office of the Warrant Agent, upon the notice
referred to in Section 6.2., at the price of $.01 per Warrant ("Redemption
Price"), provided that (a) the last sale price of the Common Stock has been at
least one hundred and fifty percent (150%) of the then effective exercise price
of the Public Warrants on each of the twenty (20) consecutive trading days
ending on the third business day
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prior to the date on which notice of redemption is given, the satisfaction of
which condition shall be certified by the Company and (b) the Company has
obtained the prior written consent of the Underwriters. The provisions of this
Section 6.1 may not be modified, amended or deleted without the prior written
consent of the Underwriters.
6.2 Date Fixed for, and Notice of, Redemption. In the event the Company
shall elect to redeem all or any part of the outstanding Warrants, the Company
shall fix a date for the redemption. Notice of redemption shall be mailed by
first class mail, postage prepaid, by the Company or the Company's agent at its
direction not less than 30 days from the date fixed for redemption to the
registered holders of the outstanding Warrants to be redeemed at their last
address as they shall appear on the registration books. Any notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the registered holder received such notice.
6.3 Exercise After Notice of Redemption. The outstanding Warrants may
be exercised in accordance with Section 3 of this Agreement at any time after
notice of redemption shall have been given by the Company pursuant to Section
6.2. hereof and prior to the date fixed for redemption. On and after the
redemption date, the record holder of the outstanding Warrants shall have no
further rights except to receive, upon surrender of the outstanding Warrants,
the redemption price.
6.4 Outstanding Warrants Only. The Company understands that the
redemption rights provided for by this Section 6 apply only to outstanding
Warrants. To the extent a person holds rights to purchase Warrants, such
purchase rights shall not be extinguished by redemption. However, once such
purchase rights are exercised, the Company may redeem the Warrants issued upon
such exercise provided that the criteria for redemption is met. The provisions
of this Section 6.4 may not be modified, amended or deleted without the prior
written consent of the Underwriters.
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1 No Rights as Stockholder. A Warrant does not entitle the registered
holder thereof to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends, or other distributions,
exercise any preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.
7.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant
certificate is lost, stolen, mutilated, or destroyed, the Company and the
Warrant Agent may, on such terms as to indemnity or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant
certificate, include the surrender thereof), issue a new Warrant certificate of
like denomination, tenor, and date as the Warrant certificate so lost, stolen,
mutilated, or destroyed. Any such new Warrant certificate shall constitute a
substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant certificate shall be at any time
enforceable by anyone.
7.3 Reservation of Common Stock. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.
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7.4 Registration of Common Stock. The Company agrees that prior to the
date that the Warrants become exercisable it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, if
possible, or a new registration statement, to register, under the Securities Act
of 1933, and it shall take such action as is necessary to qualify for sale in
those states in which the Warrants were initially offered by the Company, the
Common Stock issuable upon exercise of the Warrants. In either case, the Company
shall cause the same to become effective at or prior to the date the Warrants
become exercisable, and maintain the effectiveness of such registration
statement and keep current a prospectus thereunder and maintain such
qualification until the expiration of the Public Warrants and the Underwriters'
Warrants in accordance with the provisions of this Agreement. The provisions of
this Section 7.4 may not be modified, amended or deleted without the prior
written consent of the Underwriters.
8. Concerning the Warrant Agent and Other Matters.
8.1 Payment of Taxes. The Company will from time to time promptly pay
all taxes and charges that may be imposed upon the Company or the Warrant Agent
in respect of the issuance or delivery of shares of Common Stock upon the
exercise of Warrants, but the Company shall not be obligated to pay any transfer
taxes in respect of the Warrants or such shares.
8.2 Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment of Successor Warrant Agent. The Warrant
Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities (other than those incurred
prior to such resignation or discharge) hereunder after giving sixty (60) days'
notice in writing to the Company. If the office of the Warrant Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or incapacity by the Warrant
Agent or by a holder of Warrants (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant may apply
to the Supreme Court of the State of New York for the County of New York for the
appoint ment of a successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized,
existing and in good standing and authorized under the laws of the state in
which it was incorporated to exercise corporate trust powers, shall maintain an
office in the Borough of Manhattan, City and State of New York for the transfer
of the Warrants and, if not incorporated in the State of New York, shall be
authorized to do business in the State of New York as a foreign corporation, and
subject to supervision or examination by federal or state authority and shall be
authorized to serve as Warrant Agent for the Warrants under the Securities
Exchange Act of 1934, as amended. After appointment, any successor Warrant Agent
shall be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed; but if for
any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2 Notice of Successor Warrant Agent. In the event a
successor Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Warrant Agent and the transfer agent for the Common
Stock not later than the effective date of any such appointment.
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8.2.3 Merger or Consolidation of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, if it shall be eligible to serve as
Warrant Agent under Section 8.2.1, shall be the successor Warrant Agent under
this Agreement without any further act.
8.3 Fees and Expenses of Warrant Agent.
8.3.1 Remuneration. The Company agrees to pay the Warrant
Agent reasonable remuneration for its services as such Warrant Agent hereunder
and will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 Further Assurances. The Company agrees to perform,
execute, acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
8.4 Liability of Warrant Agent.
8.4.1 Reliance on Company Statement. Whenever in the
performance of its duties under this Warrant Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
statement signed by the President of the Company and delivered to the Warrant
Agent. The Warrant Agent may rely upon such statement for any action taken or
suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity. The Warrant Agent shall be liable hereunder
only for its own negligence or willful misconduct. The Company agrees to
indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and reasonable counsel fees, for
anything done or omitted by the Warrant Agent in the execution of this Agreement
except as a result of the Warrant Agent's negligence, willful misconduct, or bad
faith.
8.4.3 Exclusions. The Warrant Agent shall have no
responsibility with respect to the validity of this Agreement or with respect to
the validity or execution of any Warrant (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of Section 4.
hereof or responsible for the manner, method, or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant or as to
whether any shares of Common Stock will when issued be valid and fully paid and
nonassessable.
8.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth
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and among other things, shall account promptly to the Company with respect to
Warrants exercised and concurrently account for, and pay to the Company, all
moneys received by the Warrant Agent for the purchase of shares of the Company's
Common Stock through the exercise of Warrants.
9. Miscellaneous Provisions.
9.1 Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns.
9.2 Notices. Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or by the Company shall be sufficiently given or made if sent by
certified mail, or private courier service, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows:
AUGMENT SYSTEMS, INC.
0 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxx, President and Chief
Executive Officer
with a copy to:
WARNER & XXXXXXXXX, LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Any notice, statement or demand authorized by this Agreement to be given or made
by the holder of any Warrant or by the Company to or on the Warrant Agent shall
be sufficiently given or made if sent by certified mail or private courier
service, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
0 Xxxxxxxx Xxx
Xxxx, Xxx Xxxx 00000
9.3 Applicable law; Jurisdiction. The validity, interpretation, and
performance of this Agreement and of the Warrants shall be governed in all
respects by the law of the State of New York, without giving effect to
principles of conflicts of law. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenience forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.2
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hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim.
9.4 Persons Having Rights Under This Agreement. Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the registered holders
of the Warrants and, for the purposes of Sections 3.3.5, 6.1 through 6.4 and 7.4
hereof, the Underwriters, any right, remedy, or claim under or by reason of this
Warrant Agreement or of any covenant, condition, stipulation, promise, or
agreement hereof. The Underwriters shall each be deemed to be a third-party
beneficiary of this Agreement with respect to such Sections. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto (and
the Underwriters to the extent set forth above) and their successors and assigns
and of the registered holders of the Warrants.
9.5 Examination of the Warrant Agreement. A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in
the Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his or her Warrant for inspection by it.
9.6 Counterparts. This Agreement 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.
9.7 Effect of Headings. The Section headings herein are for convenience
only and are not part of this Warrant Agreement and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
under their respective corporate seals as of the day and year first above
written.
Attest: AUGMENT SYSTEMS, INC.
By:
--------------------------
--------------------------- Name: Xxxxxx X. Xxxx
Name: Title: President and Chief
Title: Executive Officer
Attest:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
--------------------------- By:
Name: --------------------------
Title: Name:
Title:
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