EXHIBIT 10.5
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE
APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME, ON ______________.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
AUGMENT SYSTEMS, INC.
FOR VALUE RECEIVED, AUGMENT SYSTEMS, INC. (the "Company"), a Delaware
corporation, hereby certifies that __________________ or his permitted assigns,
is entitled to purchase from the Company, at any time or from time to time
commencing on the date hereof, and prior to 5:00 P.M., Eastern Standard Time, on
______________, a total of ______________ (______) fully paid and nonassessable
shares of the Common Stock, par value $.01 per share, of the Company for an
aggregate purchase price of $______ (computed on the basis of $.72 per share).
(Hereinafter, (i) said Common Stock, together with any other equity securities
which may be issued by the Company with respect thereto or in substitution
therefor, is referred to as the "Common Stock", (ii) the shares of the Common
Stock purchasable hereunder are referred to as the "Warrant Shares", (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred to
as the "Aggregate Warrant Price", (iv) the price payable hereunder for each of
the Warrant Shares is referred to as the "Per Share Warrant Price", (v) this
Warrant, and all warrants hereafter issued in exchange or substitution for this
Warrant are referred to as the "Warrant" and (vi) the holder of this Warrant is
referred to as the "Holder".) The Per Share Warrant Price is subject to
adjustment as hereinafter provided. In the event of any such adjustment, the
number of Warrant Shares shall be adjusted by dividing the Aggregate Warrant
Price by the Per share Warrant Price in effect immediately after such
adjustment.
1. Exercise of Warrant. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the date hereof and prior to
5:00 P.M., Eastern Standard Time, on ________, ____, by the Holder of this
Warrant by the surrender of this Warrant (with the subscription form at the end
hereof duly executed) at
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the address set forth in Subsection 9(a) hereof, together with proper payment of
the Aggregate Warrant Price, or the proportionate part thereof if this Warrant
is exercised in part. Payment for Warrant Shares shall be made by certified or
official bank check payable to the order of the Company. If this Warrant is
exercised in part, this Warrant must be exercised for a minimum of 100 shares of
the Common Stock, and the Holder is entitled to receive a new Warrant covering
the number of Warrant Shares in respect of which this Warrant has not been
exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this Warrant,
the Company will (a) issue a certificate or certificates in the name of the
Holder for the largest number of whole shares of the Common Stock to which the
Holder shall be entitled and, if this Warrant is exercised in whole, in lieu of
any fractional share of the Common Stock to which the Holder shall be entitled,
cash equal to the fair value of such fractional share (determined in such
reasonable manner as the Board of Directors of the Company shall determine), and
(b) deliver the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of the Warrant.
No warrant granted herein shall be exercisable after 5:00 p.m. Eastern
Standard Time on ________, ______.
2. Reservation of Warrant Shares. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the shares of the Common Stock as from time to time
shall be receivable upon the exercise of this Warrant.
3. Anti-Dilution Provisions.
(a) If, at any time or from time to time after the date of
this Warrant, the Company shall distribute to the holders of the Common Stock
(i) securities, other than shares of the Common Stock, or (ii) property, other
than cash, without payment therefor, with respect to the Common Stock, then, and
in each such case, the Holder, upon the exercise of this Warrant, shall be
entitled to receive the securities and properties which the Holder would hold on
the date of such exercise if, on the date of this Warrant, the Holder had been
the holder of record of the number of shares of the Common Stock subscribed for
upon such exercise and, during the period from the date of this Warrant to and
including the date of such exercise, had retained such shares and the securities
and properties receivable by the Holder during such period. Notice of each such
distribution shall be forthwith mailed to the Holder.
(b) In case the Company shall hereafter (i) pay a dividend or
make a distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares or (iv) issue by reclassification of its Common Stock any
shares of capital stock of the Company, the Per Share Warrant Price in effect
immediately prior to such action shall be adjusted so that if the Holder
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surrendered this Warrant for exercise immediately thereafter, the Holder would
be entitled to receive the number of shares of Common Stock or other capital
stock of the Company which he would have owned immediately following such action
had such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this subsection (b) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (b), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a written notice to the Holder of
this Warrant promptly after such adjustment) shall determine the allocation of
the adjusted Per Share Warrant Price between or among shares of such classes of
capital stock or shares of Common Stock and other capital stock.
(c) In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the Holder shall have the right thereafter
to convert this Warrant into the kind and amount of securities, cash or other
property which he would have owned or have been entitled to receive immediately
after such consolidation, merger, statutory exchange, sale or conveyance had
such Warrant been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and in any such
case, if necessary, appropriate adjustment shall be made in the application of
the provisions set forth in this Section 3 with respect to the rights and
interests thereafter of the Holder to the end that the provisions set forth in
this Section 3 shall thereafter correspondingly be made applicable, as nearly as
may reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of this Warrant. The above
provisions of this subsection (c) shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances. Notice of
any such consolidation, merger, statutory exchange, sale or conveyance and of
said provisions so proposed to be made, shall be mailed to the Holder not less
than 30 days prior to such event. A sale of all or substantially all of the
assets of the Company for a consideration consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing purposes.
(d) Whenever the Per Share Warrant Price is adjusted as
provided in this Section 3 and upon any modification of the rights of the Holder
of this Warrant in accordance with this Section 3, the Company shall promptly
prepare a certificate of an officer of the Company, setting forth the Per Share
Warrant Price and the number of Warrant Shares after such adjustment or
modification, a brief statement of the facts
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requiring such adjustment or modification and the manner of computing the same
and cause a copy of such certificate to be mailed to the Holder.
(e) If the Board of Directors of the Company shall declare any
dividend or other distribution in cash with respect to the Common Stock, other
than out of earned surplus, the Company shall mail notice thereof to the Holder
not less than 15 days prior to the record date fixed for determining
shareholders entitled to participate in such dividend or other distribution.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and non-assessable, and not
subject to preemptive rights, and the Company will take all such actions as may
be necessary to assure that the par value or stated value, if any, per share of
the Common Stock is at all times equal to or less than the then Per Share
Warrant Price. The Company further covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Share or
certificate therefor.
5. Transfer.
(a) Securities Laws. Neither this Warrant nor the Warrant
Shares issuable upon the exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or under any state
securities laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such registration
is available. In the event Holder desires to transfer this Warrant or any of the
Warrant Shares issued, the Holder must give the Company prior written notice of
such proposed transfer including the name and address of the proposed
transferee. Such transfer may be made only either (i) upon publication by the
Securities and Exchange Commission (the "Commission") of a ruling,
interpretation, opinion or "no action letter" based upon facts presented to said
Commission, or (ii) upon receipt by the Company of an opinion of counsel to the
Company in either case to the effect that the proposed transfer will not violate
the provisions of the Securities Act, the Securities Exchange Act of 1934, as
amended, or the rules and regulations promulgated under either such act, or in
the case of clause (ii) above, to the effect that the Warrant or Warrant Shares
to be sold or transferred has been registered under the Securities Act of 1933,
as amended, and that there is in effect a current prospectus meeting the
requirements of Subsection 10(a) of the Securities Act, which is being or will
be delivered to the purchaser or transferee at or prior to the time of delivery
of the certificates evidencing the Warrant or Warrant Stock to be sold or
transferred.
(b) Conditions to Transfer. Prior to any such proposed
transfer, and as a condition thereto, if such transfer is not made pursuant to
an effective registration statement under the Securities Act, the Holder will,
if requested by the Company, deliver
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to the Company (i) an investment covenant signed by the proposed transferee,
(ii) an agreement by such transferee to the impression of the restrictive
investment legend set forth herein on the certificate or certificates
representing the securities acquired by such transferee, (iii) an agreement by
such transferee that the Company may place a "stop transfer order" with its
transfer agent or registrar, and (iv) an agreement by the transferee to
indemnify the Company to the same extent as set forth in the next succeeding
paragraph.
(d) Indemnity. The Holder acknowledges that the Holder
understands the meaning and legal consequences of this Section 5, and the Holder
hereby agrees to indemnify and hold harmless the Company, its representatives
and each officer and director thereof from and against any and all loss, damage
or liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or any
other breach of, this Warrant, (b) any transfer of the Warrant or any of the
Warrant Shares in violation of the Securities Act, the Securities Exchange Act
of 1934, as amended, or the rules and regulations promulgated under either of
such acts, (c) any transfer of the Warrant or any of the Warrant Shares not in
accordance with this Warrant or (d) any untrue statement or omission to state
any material fact in connection with the investment representations or with
respect to the facts and representations supplied by the Holder to counsel to
the Company upon which its opinion as to a proposed transfer shall have been
based.
(e) Transfer. Except as restricted hereby, this Warrant and
the Warrant Shares issued may be transferred by the Holder in whole or in part
at any time or from time to time. Upon surrender of this Warrant to the Company
or at the office of its stock transfer agent, if any, with assignment
documentation duly executed and funds sufficient to pay any transfer tax, and
upon compliance with the foregoing provisions, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee named in
such instrument of assignment, and this Warrant shall promptly be cancelled. Any
assignment, transfer, pledge, hypothecation or other disposition of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(f) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any part of the
Warrant and the issuance of any of the shares of Warrant Shares, the Company
shall instruct its transfer agent to enter stop transfer orders with respect to
such shares, and all certificates representing Warrant Shares shall bear on the
face thereof substantially the following legend, insofar as is consistent with
Delaware law:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933, as amended,
and may not be sold, offered for sale, assigned, transferred or
otherwise disposed of unless registered
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pursuant to the provisions of that Act or an opinion of counsel to the
Company is obtained stating that such disposition is in compliance with
an available exemption from such registration."
6. "Piggy-Back" Registrations. If at any time the Company shall
determine to register any of its securities under the Securities Act, other than
on Form S-8 or Form S-4 or their then equivalents, it shall send to each Holder
of the Common Stock or Warrant Shares (the "Registrable Shares"), including each
Holder who has the right to acquire Registrable Shares, written notice of such
determination and, if within 10 days after receipt of such notice, such Holder
shall so request in writing, the Company shall use its best efforts to include
in such registration statement all or any part of the Registrable Shares such
Holder requests to be registered therein, except that if, in connection with any
offering involving an underwriting of Common Stock to be issued by the Company,
the managing underwriter shall impose a limitation on the number of shares of
such Common Stock which may be included in any such registration statement
because, in its judgment, such limitation is necessary to effect an orderly
public distribution, and such limitation is imposed pro rata with respect to all
securities whose holders have a contractual, incidental ("piggy-back") right to
include such securities in the registration statement and as to which inclusion
has been requested pursuant to such right, then the Company shall be obligated
to include in such registration statement only such limited portion (which may
be none) of the Registrable Shares with respect to which such Holder has
requested inclusion hereunder.
7. Loss, etc. of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
8. Warrant Holder Not Shareholder. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof.
9. Communication. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at 0 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000,
or such other address as the Company has designated in writing to the Holder, or
(b) the Holder at _______________________________________, or such
other address as the Holder has designated in writing to the Company.
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10. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
11. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, AUGMENT SYSTEMS, INC., has caused this Warrant to
be signed by its President and its corporate seal to be hereunto affixed and
attested by its Secretary this ____ day of _____________, 1995.
ATTEST: AUGMENT SYSTEMS, INC.
By:
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---------------------------------- President
Secretary
[Corporate Seal]
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SUBSCRIPTION
The undersigned,_____________________ , pursuant to the provisions of
the foregoing Warrant, hereby agrees to subscribe for the purchase of _______
shares of the Common Stock of Augment Systems, Inc. covered by said Warrant, and
makes payment therefor in full at the price per share provided by said Warrant.
Dated: Signature
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Address
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ASSIGNMENT
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto ________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint _____________________,
attorney, to transfer said Warrant on the books of Augment Systems, Inc..
Dated: Signature
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Address
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PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________ hereby assigns and transfers unto
_________________ the right to purchase________ shares of the Common Stock of
Augment Systems, Inc. by the foregoing Warrant, and a proportionate part of said
Warrant and the rights evidenced hereby, and does irrevocably constitute and
appoint _____________________, attorney, to transfer that part of said Warrant
on the books of Augment Systems, Inc.
Dated: Signature
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Address
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