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EXHIBIT 10.9
WARRANT AGREEMENT
Between
MIGRATEC, INC.
And
MT PARTNERS, L.P.
and
MERCURY FUND NO. 1, LTD.
Dated as of January 25, 2000
THE WARRANTS AND WARRANT SECURITIES TO BE RECEIVED UPON EXERCISE OF THE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE WARRANTS
AND WARRANT SECURITIES, AS THE CASE MAY BE, MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, IN THE
ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT
WITH RESPECT TO THE WARRANTS AND WARRANT SECURITIES, AS THE CASE MAY BE, UNDER
THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (2) AN
EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is dated as of the 25th day
of January, 2000, by between MigraTEC, Inc., a Florida corporation (the
"Company"), MT Partners, L.P., a Texas limited partnership ("Cardinal"), and
Mercury Fund No. 1, Ltd., a Texas limited partnership ("Mercury"), and their
respective designees and/or assignees (the "Investors").
RECITALS
WHEREAS, the Company has agreed to issue to the Investors or their
assigns common stock purchase warrants in substantially the form attached hereto
as Exhibit A (the "Warrants") to acquire up to an aggregate of 6,000,000 shares
of the Company's common stock, no par value per share ("Common Stock");
WHEREAS Cardinal and Mercury have agreed to provide the initial loan
amount (the "Initial Loan Amount") in the aggregate of One Million Two Hundred
Fifty Thousand Dollars ($1,250,000) pursuant to that certain Note and Warrant
Purchase Agreement (the "Purchase Agreement");
WHEREAS, Cardinal and Mercury, at their sole discretion, may advance
subsequent loan amounts in the aggregate amount of up to Two Million Five
Hundred Thousand Dollars ($2,500,000), which together with the Initial Loan
Amount shall equal in the aggregate up to Three Million Seven Hundred Fifty
Thousand Dollars ($3,750,000) (the "Total Loan Amount"); and
WHEREAS, in consideration of the advances by the Investors under the
Purchase Agreement of amounts up to the Total Loan Amount, the Company desires
to issue to each Investor one or more Warrants to purchase the number of shares
of the Company's Common Stock as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements contained in this
Agreement, the parties hereto agree as follows:
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AGREEMENT
I. DEFINITIONS
Section 1.01 Defined Terms. As used in this agreement, the following
capitalized terms shall have the meanings respectively assigned to them below,
which meanings shall be applicable equally to the singular and plural forms of
the terms so defined. All terms not so defined below shall have the meanings
ascribed to them in the Purchase Agreement and the Notes.
"Affiliate" means as to any Person or any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control of such Person. For purposes of this definition "control," when used
with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" shall mean any day that the banks located in the State
of Texas are open to conduct business.
"Common Stock" shall mean the common stock, no par value per share, of
the Company.
"Common Stock Equivalents" shall mean all options, warrants (including,
without limitation, the Warrants), securities of any kind (including, without
limitation, securities convertible into or exchangeable or exercisable for
Common Stock) and other rights (in each case whether now existing or hereafter
issued or arising) to acquire from the Company shares of Common Stock (without
regard to whether such options, warrants, securities and other rights are then
exchangeable, exercisable or convertible in full, in part or at all).
"Company" shall have the meaning set forth in the preamble.
"Dividend" means, as to any Person, any declaration or payment of any
dividend or distribution (other than a dividend of Common Stock) on, or the
making of any pro rata distribution, loan, advance, or investment to, any shares
of capital stock of such Person.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, and any successor
provisions thereto.
"Exercise Price" shall mean $0.20 per share. The Exercise Price and the
number of shares of Common Stock purchasable pursuant to the Warrants shall be
subject to adjustment from time to time as hereinafter set forth in Article V
hereof.
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"Expiration Period" means January 25, 2005.
"Exercise Quantity" shall mean the number of shares of Common Stock,
determined from time to time, taking into account all shares of Common Stock
theretofore issued upon exercise of the Warrants, required to be issued by the
Company to the holders of the Warrants. Exercise Quantity may be adjusted from
time to time pursuant to the provisions of the Warrants and this Agreement.
"Fair Value" as of a particular date shall mean the closing asked price
of the Common Stock as reported on a national securities exchange or on the
NASDAQ SmallCap, National Market System or OTC Bulletin Board Service
(collectively, and as applicable, "NASDAQ") or, if a last asked quotation is not
available for the Common Stock, the last sale price of the Common Stock as
reported by NASDAQ, or if not so reported, as listed in the National Quotation
Bureau, Inc.'s "Pink Sheets." If such quotations are unavailable, or with
respect to other appropriate security, property, assets, business or entity,
"Fair Value" shall mean the fair value of such item as determined by mutual
agreement reached by the Holder and the Company or, in the event the parties are
unable to agree, an opinion of PriceWaterhouseCoopers, LLP ("PWC") in accordance
with the following procedure. In the case of any event which gives rise to a
requirement to determine "Fair Value" pursuant to this Agreement, the Company
shall notify the Holders of such event as promptly as practicable, but in any
event within ten (10) calendar days following such event and if the procedures
contemplated herein in connection with determining Fair Value have not been
complied with fully, then any such determination of Fair Value for any purpose
of this Agreement shall be deemed to be preliminary and subject to adjustment
pending full compliance with such procedures.
Upon the occurrence of an event requiring the determination of Fair
Value, the Company shall give the Holder(s) of the Warrants notice of such
event, and the Company and the Holders shall engage in direct good faith
discussions to arrive at a mutually agreeable determination of Fair Value. In
the event the Company and the Holder(s) are unable to arrive at a mutually
agreeable determination within ten (10) days of the notice, the Company and the
Holder(s) of the Warrants (who, if more than one, shall agree among themselves
by a majority) shall retain PWC. Such firm shall determine the Fair Value of the
security, property, assets, business or entity, as the case may be, in question
and deliver its opinion in writing to the Company and to such Holder within
thirty (30) days of its retention. Each of the Company and the Holders (as a
group) shall submit to PWC their proposed determination of Fair Value, and any
other supporting documentation reasonably requested by PWC. In no event shall
the marketability, or lack thereof, or lack of registration of a security be a
factor in determining the "Fair Value" of such security. The determination so
made shall be conclusive and binding on the Company and such Holder(s), absent
clear and manifest error. The fees and expenses of PWC pursuant to this
provision shall be borne by the Company in advance. In the event the Company
fails to pay such fees, or the retainer or deposit requested by such independent
certified public accounts' firm,
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within 10 days of the acceptance by PWC (conditional or unconditional) of such
engagement, then the Holders' proposed determination of Fair Value shall be
conclusive and binding upon the Company.
"Holder" or "Holders" shall mean the Person(s) then registered as the
owners of the Warrants or Warrant Securities, as the case may be, on the books
and records of the Company.
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, estate,
unincorporated organization, joint venture, court or governmental or political
subdivision or agency thereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, and any successor provisions
thereto.
"Subsidiary" of any Person means (i) a corporation, association or
other business entity of which more than fifty percent (50%) of the total voting
power of all classes of the outstanding voting stock or other indicia of
ownership is owned, directly or indirectly, by such Person or by one or more
other Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof, (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof) and (iii) any other Person not
described in clauses (i) and (ii) above in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, owns 50% ownership and the power,
whether by such ownership interest, pursuant to a written contract or agreement
or otherwise, to direct the policies and management or the financial and other
affairs thereof.
"Warrant Securities" shall mean the shares of Common Stock purchasable
or purchased from time to time under the Warrants or acquirable or acquired upon
any transfer of any such securities, together with all additional securities
receivable or received in payment of Dividends or distributions on or splits of
those securities or receivable or received as a result of adjustments provided
for in Article V hereof.
II. WARRANTS
Section 2.01 Grant of Warrants.
(a) The Company hereby grants to the Investors, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Warrants to purchase the number of shares of Common Stock, as the same may be
adjusted from time to time as set forth in Article V, determined in accordance
with Section 2.01(b) below, which Warrants shall be
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evidenced by warrant certificates in substantially the form attached as Exhibit
A. Investors and any subsequent Holder of the Warrants and of Warrant Securities
shall have the rights and obligations provided for in the Warrants and in this
Agreement.
(b) Subject to the terms of this Agreement, the Warrants, the Notes and
the Purchase Agreement, the Company shall grant warrants to each Investor or
Affiliates of the Investors for the purchase of the following number of shares
of Common Stock:
(i) On the Initial Closing:
The amount of the Guaranteed Advance funded by the
Investor
The Total Loan Amount
multiplied by
6,000,000; and
(ii) On each Subsequent Closing:
The amount of any Subsequent Advance funded by the
Investor
The Total Loan Amount
multiplied by
6,000,000.
Section 2.02 Exercise of Warrants. Subject to the terms of this
Agreement, the Warrants holder shall have the right, at any time and from time
to time after January 25, 2000 until 5:00 p.m., Central Time, on January 25,
2005, to purchase from the Company up to the number of fully paid and
nonassessable shares of Warrant Securities to which the Warrants holder may at
the time be entitled to purchase pursuant to this Agreement and the Warrants,
upon presentation and surrender of the Warrants to the Company, together with
the Exercise Form duly completed and executed and payment in the aggregate
amount equal to the Exercise Price multiplied by the number of shares of Common
Stock being purchased. At the option of Holder, payment of the Exercise Price
may be made either by (i) certified check payable to the order of the Company,
(ii) surrender of certificates then held representing, or deduction from the
number of shares issuable upon exercise of the Warrants, of that number of
shares which has an aggregate Fair Value determined in accordance with this
Agreement on the date of exercise equal to the aggregate Exercise Price for all
shares to be purchased pursuant to the Warrants, or (iii) by a combination of
the foregoing methods. Within five business days of the Company's receipt of
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the Warrants, the completed and signed Exercise Form and the requisite payment
(if any), the Company shall issue and deliver (or cause to be delivered) to the
exercising Holder stock certificates aggregating the number of shares of Warrant
Securities purchased.
Section 2.03 Partial Exercise. In the event of a partial exercise of
the Warrants, the Company shall issue and deliver to the Holder new Warrants at
the same time such stock certificates are delivered, which new Warrants shall
entitle the Holder to purchase the balance of the Exercise Quantity not
purchased in that partial exercise and shall otherwise be upon the same terms
and provisions as the Warrants.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company, hereby represents and warrants as follows:
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of Florida, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to perform all its
obligations under the contracts to which it is a party. The Company is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction where the failure to be so
qualified would have a material adverse effect on the Company, including,
without limitation, Texas. No jurisdiction in which the Company is not qualified
or licensed has claimed, in writing or otherwise, that the Company is required
to be qualified or licensed therein.
(b) The execution and delivery of this Agreement and the Warrants have
been duly and properly authorized by all requisite corporate action of the
Company and its board of directors, and no consent of any other Person is
required as a prerequisite to the validity, enforceability and performance of
this Agreement and the Warrants that has not been obtained. The Company has the
full legal right, power and authority to execute and deliver this Agreement and
the Warrants and to perform its obligations hereunder and thereunder. When
issued and delivered pursuant to this Agreement, the Warrants will have been
duly and validly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company and the Holder thereof will be
entitled to the benefits provided herein and therein.
(c) The Warrant Securities, when issued, sold and delivered in
accordance with the terms hereof, for the consideration expressed herein, shall
be duly and validly issued and outstanding, fully paid and nonassessable, and
will be issued in compliance with all applicable federal and state securities or
blue sky laws.
(d) The Company is not a party to or otherwise subject to any contract
or agreement which restricts or otherwise affects its right or ability to
execute and deliver this Agreement or
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the Warrants or to perform any obligation hereunder or thereunder (including,
without limitation, issuance of the Warrant Securities). Neither the execution
or delivery of this Agreement or the Warrants, nor compliance therewith
(including, without limitation, issuance of the Warrant Securities), will
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in any violation of, or result in the
creation of any material lien upon any assets or properties of the Company
under, or require any consent, approval, or other action by, notice to or filing
with any court or governmental agency or division pursuant to the Articles of
Incorporation or Bylaws of the Company, as currently in effect, any award of any
arbitrator, or any agreement, instrument or law to which the Company is subject
or by which it or its assets or properties is bound.
(e) The Warrants are, and the Warrant Securities will be, issued by the
Company to the Investors in a transaction exempt from registration and
qualification under the applicable federal and state securities and blue sky
laws.
IV. COVENANTS
Section 4.01 Covenants of the Company. The Company hereby covenants and
agrees that, during the term of this Agreement, unless Holders of outstanding
Warrants evidencing a majority of the Warrants agree otherwise in writing,
(a) Each of the Warrant Securities issued and delivered upon the
exercise of the Warrants and payment of the Exercise Price will be duly and
validly authorized and issued, will be fully paid and nonassessable, and will
not be subject to any unpaid tax of the Company or any lien imposed on or
created by the Company, whether respecting their issuance to and purchase by the
Holder of the Warrants or otherwise. The Company will take all such actions as
may be necessary to assure that all such Warrant Securities may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange or quotation system upon which
such Warrant Securities may be listed.
(b) The Company shall reserve and at all times keep available for
issuance an authorized number of shares of Common Stock or Warrant Securities
sufficient to permit the full and immediate exercise of the Warrants and the
full and immediate exercise, exchange and conversion of all other securities,
options, warrants and other rights issued or granted by the Company.
(c) The Company shall not permit the par value of its Common Stock to
exceed, at any time, the Exercise Price and shall take all such actions as may
be necessary or appropriate to ensure that it does not do so.
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(d) As soon as available, and in no event later than three business
days following the dates filed with the Securities and Exchange Commission (the
"Commission") or any other governmental agency or division or other regulatory
authority, if such documents are so filed, the Company shall, upon request,
deliver to any Holder(s) of the Warrants and the Warrant Securities copies of
(i) all annual, quarterly and monthly financial statements made available by the
Company to its shareholders, (ii) all reports, notices and proxy or information
statements sent or made available generally by the Company to its shareholders,
and (iii) all regular and periodic reports and all registration statements,
prospectuses and other information filed by the Company with the Commission,
relevant state authorities or any securities exchange, securities quotation
system or other self-regulatory organization.
(e) The Company agrees that to the extent reasonably necessary to
permit the Holders to sell shares of the Common Stock in accordance with and in
reliance on Rule 144, and for so long as such shares are owned by the Holders
and such shares are not registered for resale under the Securities Act, the
Company will make and keep public information available within the meaning of
Rule 144 at all times from and after the Closing Date, and file with the SEC in
a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act.
(f) The Company shall cooperate with the Holder(s) of the Warrants and the
Warrant Securities in supplying such information as may be reasonably necessary
for the Holder(s) to complete and file any information or other reporting forms
from time to time required by the Commission, relevant state authorities or any
securities exchange, securities quotation system or other self-regulatory
organization, including, without limitation, information pertaining to or
required for the availability of any exemption from the securities laws for the
sale, transfer or other disposition of the Warrants or any of the Warrant
Securities.
Section 4.02 Indemnification.
(a) The Company agrees to defend, indemnify and hold harmless, to the
full extent permitted by law, Investors and each other Holder of the Warrants,
this Agreement, or any Warrant Security purchased hereunder, any underwriter(s),
and their respective directors, officers, employees, attorneys and agents, as
well as each other Person (if any) controlling any of the foregoing Persons
within the meaning of Section 15 of the Securities Act, or Section 20 of the
Exchange Act, from and against any and all claims, liabilities, losses and
expenses (including, without limitation, the reasonable disbursements, expenses
and fees of their respective attorneys, accountants and experts) that may be
imposed upon, incurred by, or asserted against any of them, any of their
respective directors, officers, employees, attorneys and agents, or any such
control Person, under the Securities Act, the Exchange Act or any other statute
or at common law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof), arise out of or are related directly or indirectly
to (i) the breach of any of the representations, warranties and/or covenants of
the Company contained herein, or (ii) any alleged untrue
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statement of any material fact contained, on the effective date thereof, in any
registration statement under which such securities are or were registered under
the Securities Act or the Exchange Act, or in any preliminary prospectus or
final prospectus related thereto, or any amendment or supplement thereto, or any
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
such Persons for any legal or any other expenses reasonably incurred by such
Persons in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, preliminary
prospectus, final prospectus amendment or supplement thereto incident to
registration or qualification of any Warrant Securities in reliance upon and in
strict conformity with written information furnished to the Company by such
Persons with respect to information regarding such Persons expressly for
inclusion therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such indemnified
Person, and shall survive the transfer of such securities by such Person.
Promptly after receipt of notice of the commencement of any action in respect of
which indemnity may be sought against the Company, the Company shall assume the
defense of such action (including the employment of counsel, who shall be
reasonably satisfactory to the party seeking indemnity hereunder) and the
payment of expenses insofar as such action shall relate to any alleged liability
in respect of which indemnity may be sought against the Company. If the Company
assumes the defense of such action, (i) no compromise or settlement of such
claims may be effected by the Company without the indemnified party's consent
unless (1) there is no finding or admission of any violation of law, regulation,
rule or order or any violation of the rights of any other person or entity and
no effect on any other claims that may be made against the indemnified party,
and (2) the sole relief provided is monetary damages that are paid in full by
Company; and (ii) the indemnified party will have no liability with respect to
any compromise or settlement of such claims effected without its consent. If
notice is given to the Company of the commencement of any action and the Company
does not, within ten days after the indemnified party's notice is given to the
Company, give notice to the indemnified party of its election to assume the
defense of such action, the Company will be bound by any determination made in
such action or any compromise or settlement effected by the indemnified party.
Section 4.03 Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a claim or
action may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, or if an indemnified party determines that there are defenses
available to it that the Company cannot assert on behalf of the indemnified
party or not being raised by the Company after the indemnified party has given
the Company notice of such defense, or if the indemnified party reasonably
determines that there is a conflict of interest between the Company and the
indemnified party in the claim or action, the indemnified party
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may, by notice to the Company, assume the exclusive right to defend, compromise,
or settle such claim or action, and the Company will be bound by any
determination of a claim or action so defended or any compromise or settlement
effected.
V. ANTIDILUTION
Section 5.01 No Dilution or Impairment: Adjustments.
(a) Prohibited Actions. So long as any Warrants are outstanding, the
Company will not avoid or seek to avoid the observance or performance of any of
the terms of this Agreement or the Warrants or impair the ability of the
Holder(s) to realize the full intended economic value thereof, but will at all
times in good faith assist in the carrying out of all such terms, and of the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder(s) of the Warrants against dilution or other
impairment.
(b) Adjustment of Exercise Price in the Event of Certain Issuances of
Common Stock or Common Stock Equivalents. In case the Company shall at any time
(i) issue or sell Common Stock or Common Stock Equivalents (by merger otherwise)
for less than $0.125 (as adjusted for stock divisions, dividends, combinations,
recapitalizations and reclassifications) (other than (A) delivery of shares of
Common Stock upon exercise of the Warrants, and (B) any Common Stock Equivalents
issued and outstanding on the date hereof), or (ii) issue Common Stock or Common
Stock Equivalents by way of a Dividend or other distribution on any stock of the
Company or effect a forward stock split of the outstanding shares of Common
Stock, the Company shall first obtain approval from the Board of Directors
consisting of at least one representative of the Investors pursuant to the
Shareholders Agreement, and the Exercise Price then in effect shall be
proportionately decreased (on the date of such issuance, sale or split) so that
the new Exercise Price shall be equal to the product of (x) the former Exercise
Price and (y) the lesser of (i) one or (ii) the following fraction:
The number of shares of Common Stock and
Common Stock Equivalents outstanding immediately prior to such issuance
The number of shares of Common Stock and
Common Stock Equivalents outstanding immediately after such issuance
and the Exercise Quantity purchasable upon exercise of the Warrants immediately
prior thereto shall be adjusted so that the new Exercise Quantity shall be equal
to the product of (x) the former Exercise Quantity and (y) the following
fraction:
The Exercise Price in effect immediately prior to such adjustment
The Exercise Price in effect immediately after such adjustment
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(c) Company to Prevent Dilution. In any case at any time or from time
to time conditions arise by reason of action taken by the Company which are not
adequately covered by the provisions of this Article V, and which might
adversely affect the rights of the Holders under any provision of this
Agreement, unless the adjustment necessary shall be agreed upon by the Company
and the Holders, the Board of Directors of the Company shall appoint PWC,
acceptable to the Holders, who at the Company's expense shall give their opinion
upon the adjustment, if any, on a basis consistent with the standards
established in the other provisions of this Article V, necessary with respect to
the Exercise Price and the Exercise Quantity, so as to preserve, without
dilution, the rights of the Holders. Upon the receipt of such opinion, the
Company's Board of Directors shall forthwith make the adjustments described
therein; provide, however, that no such adjustment shall be made to increase the
Exercise Price or decrease the Exercise Quantity.
(d) Reorganization; Asset Sales; Etc. In case of (i) any capital
reorganization or any reclassification of the capital stock of the Company, (ii)
any consolidation or merger of the Company or any Subsidiary with or into
another Person, (iii) the disposition or transfer of assets of the Company other
than in the ordinary course of the Company's business, (iv) any Dividend or
other distribution to the holders of capital stock of the Company in the form of
any asset, including without limitation securities of the Company, or (v) the
dissolution, liquidation or winding up of the Company, the Holders shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such transaction or event that appropriate provision shall
be made so that such Holders shall thereafter be entitled to purchase) the kind
and amount of shares of stock and other securities and property receivable in
such transaction by a holder of the number of shares of Common Stock of the
Company into which this Agreement entitled the Holders to purchase immediately
prior to such capital reorganization, reclassification of capital stock,
non-surviving combination or disposition; and in any such case appropriate
adjustments shall be made in the application of the provisions of this Article V
with respect to rights and interests thereafter purchasable upon the exercise of
a Warrant.
(e) Adjustment Statement. Whenever the Exercise Price or Exercise
Quantity is adjusted as herein provided, the Company shall, within ten days
following the consummation of the event triggering such adjustment, deliver to
the Holders a statement signed by the President of the Company and by its
Treasurer or Secretary stating the adjusted Exercise Price and Exercise Quantity
for which the Warrants are exercisable, determined as specified herein. The
statement shall show in detail the facts requiring such adjustment, including a
statement of the consideration received by the Company for any additional stock
issued. Irrespective of any adjustments in the Exercise Price or the Exercise
Quantity or the kind of shares purchasable upon the exercise of the Warrants,
the Warrants theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
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(f) Prior Notice to the Holders. If at any time:
(i) The Company shall pay any Dividend payable in Common Stock
or Common Stock Equivalents upon its capital stock or make any distribution to
the holders of its capital stock; or
(ii) The Company shall offer for subscription pro rata to the
holders of its capital stock any additional shares of stock of any class or any
other rights; or
(iii) The Company shall effect any capital reorganization or
any reclassification of or change in the outstanding capital stock of the
Company (other than a change in par value, or a change from par value to no par
value, or a change from no par value to par value, or a change resulting solely
from a subdivision of outstanding shares), or any consolidation or merger, or
any sale, transfer or other disposition of all or substantially all of its
property, assets, business and goodwill as an entirety, or the liquidation,
dissolution or winding up of the Company; or
(iv) The Company shall declare a Dividend upon its capital
stock;
then, in any such event, the Company shall cause at least thirty (30) days'
prior written notice to be mailed to the Holders at the address of each such
Holder shown on the books of the Company. The notice shall also specify the date
on which the books of the Company shall close or a record be taken for such
stock dividend, distribution or subscription rights, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer,
disposition, liquidation, dissolution, winding up, or Dividend, as the case may
be, shall take place, and the date of participation therein by the holders of
shares of capital stock if any such date is to be fixed, and shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the rights of the Holder.
(g) Disputes. If there is any dispute as to the computation of the
Exercise Price or the Exercise Quantity, the Company will retain PWC (or its
successor), to conduct an audit of the computations pursuant to the terms hereof
involved in such dispute, including the financial statements or other
information upon which such computations were based. The determination of such
accounting firm shall, in the absence of manifest error, be conclusive and
binding.
VI. REGISTRATION RIGHTS
All registration rights under the Securities Act between the Company
and the Investors relating to the Warrants or the Company's Common Stock shall
be determined by the Registration Rights Agreement by and among the Company and
the Investors of even date herewith.
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VII. TRANSFER OF WARRANTS AND WARRANT SECURITIES
Section 7.01 Transfer. Except as set forth in Section 7.02 below, the
Warrants and all rights thereunder are transferable, in whole or in part, on the
books of the Company to be maintained for such purpose, upon surrender of such
Warrants at the office of the Company maintained for such purpose, together with
a written assignment of such Warrants duly executed by the Holder hereof or its
agent or attorney. Upon such surrender and payment, the Company shall execute
and deliver a new Warrants or Warrants in the name of the assignee or assignees
and in the denominations specified in such instrument of assignment, and the
surrendered Warrants shall promptly be canceled. The transferred Warrants, if
properly assigned in compliance herewith, may be exercised by an assignee for
the purchase of shares of Common Stock without having a new Warrants issued. The
Company will not close its stock transfer books against a transfer of the
Warrants or the Warrant Securities or any exercise of the Warrants. Any such
transfer or exercise tendered while such stock transfer books shall be closed
shall be deemed effective immediately prior to such closure.
Subject to Section 7.02 below, the Warrants may be divided or combined
with other Warrants upon presentation at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder thereof or its agent or
attorney. Subject to compliance with this, as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrants or Warrants in exchange for the Warrants or Warrants to be
divided or combined in accordance with such notice.
The Company shall pay all expenses, taxes (other than income taxes, if
any, of the transferee) and other charges incurred by the Company in the
performance of its obligations in connection with the preparation, issue and
delivery of Warrants under this Section 7.01. The Company agrees to maintain at
its aforesaid office books for the registration and transfer of the Warrants.
Notwithstanding any provision to the contrary contained herein, the Warrants and
the Warrant Securities shall be transferable only in compliance with the
provisions of the Securities Act and applicable state securities laws in respect
of the transfer of any Warrants or any Warrant Securities.
Section 7.02 Transfer Restrictions. Neither this Warrant Agreement, the
Warrants nor the Warrant Securities, when issued, have been registered under the
Securities Act or under the securities laws of any state. Neither this
Agreement, the Warrants nor the Warrant Securities, when issued, may be
transferred: (a) if such transfer would constitute a violation of any federal or
state securities laws or a breach of the conditions to any exemption from
registration thereunder and (b) unless and until one of the following has
occurred: (i) registration of the Warrants or the Warrant Securities, as the
case may be, under the Securities Act, and such registration or qualification as
may be necessary under the securities laws of any state, have
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become effective, (ii) the Holder has delivered an opinion of counsel, or other
evidence reasonably satisfactory to the Company, that such registration or
qualification is not required, or (iii) such transfer would be permitted under
Rule 144 under the Securities Act.
Each certificate for Warrant Securities issued upon exercise of a
Warrant and each certificate issued to a subsequent transferee, unless at the
time of exercise such Warrant Securities are registered under the Securities
Act, shall bear a legend substantially in the following form (and any additional
legends required by applicable law) on the face thereof.
THE WARRANT SECURITIES TO BE RECEIVED UPON EXERCISE OF THE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE WARRANT SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, IN THE ABSENCE OF (1) AN
EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH
RESPECT TO THE WARRANT SECURITIES UNDER THE SECURITIES ACT AND UNDER
ANY APPLICABLE STATE SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION.
Section 7.03 Replacement of Instruments. Within five business days
following receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any
certificate or instrument evidencing any Warrants or Warrant Securities, and (a)
in the case of loss, theft or destruction, upon receipt by the Company of
indemnity reasonably satisfactory to it, or (b) in the case of mutilation, upon
surrender and cancellation thereof, the Company, at its expense, will execute,
register and deliver, in lieu thereof, a new certificate or instrument for (or
covering the purchase of) an equal number of Warrants or Warrant Securities.
VIII. MISCELLANEOUS
Section 8.01 Term. Except as otherwise expressly provided in this
Agreement or the Warrants, this Agreement shall expire on January 25, 2005,
provided that the Company's obligations to honor an exercise of the Warrants
given prior to such expiration or to perform any obligation continue and survive
notwithstanding the expiration of this Agreement.
Section 8.02 No Waiver Under Other Agreements. The terms and provisions
contained in this Agreement are not intended and shall not be construed to
waive, modify, repeal, stay, diminish or otherwise impair or affect in any
manner whatsoever any right or remedy of the
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Holder(s) under the Company's Certificate of Incorporation, Bylaws or similar
agreements, or any other agreements between the Company and/or its affiliates
and Investors.
Section 8.03 Reliance. Each party to this Agreement shall be entitled
to rely upon any notice, consent, certificate, affidavit, statement, paper,
document, writing or other communication reasonably believed by that party to be
genuine and to have been signed, sent or made by the proper Person or Persons.
Section 8.04 Notice. All notices and other communications provided for
or permitted hereunder shall be made in writing and be by hand-delivery or
certified mail, return receipt requested, (a) if to Holders, to the address set
forth on the signature page hereof or such other address given by Holders to the
Company in writing, (b) if to a subsequent Holder of Warrants or Warrant
Securities issued pursuant to the exercise of the Warrants, at the most current
address given by such Holder to the Company in writing; or (c) if to the
Company, as follows:
MigraTEC, Inc.
00000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attn: President
All such notices and communications shall be deemed to have been duly
given upon delivery or attempted delivery during normal business hours.
Section 8.05 Enforcement. The Company acknowledges that the Holders may
proceed to exercise or enforce any right, power, privilege, remedy or interest
that they may have under this Agreement or applicable law without notice, except
as otherwise expressly provided herein, without pursuing, exhausting or
otherwise exercising or enforcing any other right, power, privilege, remedy or
interest that they may have against or in respect of any other party, or any
other Person or thing, and without regard to any act or omission of such party
or any other Person. The Company's obligations hereunder, including, without
limitation the obligation to issue the Warrant Securities upon exercise of the
Warrants, are absolute and unconditional and are not subject to any abatement,
reduction, setoff, defense, counterclaim or recoupment due or alleged to be due
to, or by reason of, any past, present or future claims which the Company may
have against the Investors or any Holder, or any assignee, thereof, for any
reason whatsoever. All rights and remedies of the party hereto are cumulative of
each other and of every other right or remedy such party may otherwise have at
law or in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.
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Section 8.06 Equitable Relief. Each party acknowledges and agrees that
it would be impossible to measure in money the damage in the event of a breach
of any of the terms and provisions of this Agreement by any party hereto, and
that, in the event of any such breach, there may not be an adequate remedy at
law, although the foregoing shall not constitute a waiver of any of the party's
rights, powers, privileges and remedies against or in respect of a breaching
party, any other person or thing under this Agreement or applicable law. It is
therefore agreed that, in addition to all other such rights, powers, privileges
and remedies that it may have, each party shall be entitled, without the
obligation to post bond, to injunctive relief, specific performance or such
other equitable relief as such party may request to exercise or otherwise
enforce any of the terms and provisions of this Agreement and to enjoin or
otherwise restrain any act prohibited thereby, and no party will urge, and each
party hereby waives, any defense that there is an adequate remedy available at
law.
Section 8.07 Merger or Consolidation of the Company. So long as the
Warrants remains outstanding, the Company will not merge or consolidate with or
into, or sell, transfer or lease all or substantially all of its property to,
any other corporation unless the successor or purchasing corporation, as the
case may be (if not the Company), shall expressly assume, by supplemental
agreement, the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company.
Section 8.08 Interpretation; Headings, Severability.
(a) The parties acknowledge and agree that since each party and its
counsel have had the opportunity to review and negotiate the terms and
provisions of this Agreement and have contributed to its revision, the normal
rule of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement,
and its terms and provisions shall be construed fairly as to all parties hereto
and not in favor of or against any party, regardless of which party was
generally responsible for the preparation of this Agreement.
(b) The Section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
(c) In the event that any term or provision of this Agreement shall be
finally determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by a governmental authority having jurisdiction and
venue, such determination shall not impair or otherwise affect the validity,
legality or enforceability: (i) by or before that authority of the remaining
terms and provisions of this Agreement, which shall be enforced as if the
superseded, invalid, illegal or otherwise unenforceable term or provision were
modified to the extent required to permit such provision to be not superseded,
invalid, illegal or unenforceable, or (ii) by or before any other authority of
any of the terms and provisions of this Agreement.
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(d) If any period of time specified in this Agreement expires on a day
that is not a Business Day, that period shall be extended to and expire on the
next succeeding Business Day.
Section 8.09 Survival of Covenants. Each of the covenants and other
agreements of the parties contained in this Agreement shall be absolute and,
except as otherwise expressly provided, unconditional, shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect until the term of this Agreement has expired, and thereafter with respect
to events occurring prior thereto.
Section 8.10 No Required Exercise. No term or provision of the Warrants
or this Agreement is intended to require, nor shall any such term or provision
be construed as requiring, any Holder of the Warrants to exercise or sell the
Warrants.
Section 8.11 Binding Effect. This Agreement shall be binding upon and
enforceable against the parties hereto and their respective successors and
assigns.
Section 8.12 No Waiver by Action or Course of Dealing. No course of
dealing or any delay or failure to exercise any right hereunder on the part of
any party hereto shall operate as a waiver of such right or otherwise prejudice
the rights, powers or remedies of such party.
Section 8.13 Waiver; Modification; Amendment. Each and every
modification to and amendment of this Agreement shall be in writing and signed
by the Company, Investors (if at that time Investors is a Holder) and by the
Holders of a majority in interest of all issued and unissued Warrant Securities.
Each and every waiver of and consent to any departure from any term or provision
hereof (except as otherwise provided herein) shall be in writing and signed by
Investors (if at that time it is a Holder) and by the Holders of a majority in
interest of all issued and unissued Warrant Securities and by each party against
whom enforcement of the waiver or consent may be sought. Notwithstanding the
foregoing, no modification, amendment or waiver of any term or provision hereof
with respect to the Exercise Price, the Exercise Quantity, any terms of Article
V hereof, any of the terms of this Section 8.13 or which purports, or has the
effect of, shortening the term of any Warrants or limiting the right or ability
of a Holder thereof to exercise a Warrant shall be enforceable against a Holder
unless such Holder specifically approves, in writing, such modifications,
amendment or modification.
Section 8.14 Entire Agreement. This Agreement and the Warrants contain
the entire agreement of the parties with respect to the Warrants and supersede
all other representations, warranties, agreements and understandings, oral or
otherwise, among the parties hereto with respect to the Warrants, except as
otherwise provided herein.
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Section 8.15 No Inconsistent Agreements or Rights. The Company shall
not enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement.
Section 8.16 Time of the Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Section 8.17 Attorneys' Fees and Costs. Should any party institute any
action, suit or other proceeding arising out of or relating to this Agreement or
the Warrants, the prevailing party shall be entitled to receive from the losing
party reasonable attorneys' fees and costs incurred in connection therewith,
along with all costs of defense, investigation, preparation, experts and
collection.
Section 8.18 Governing Law. This Agreement, the warrants and the
warrant securities and all amendments, supplements, waivers, and consents
relating hereto or thereto shall be governed by and construed in accordance with
the internal laws of the State of Florida without regard to principles of
conflicts of law.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed as of the day and year first above written.
THE COMPANY:
MIGRATEC, INC.
By:
--------------------------------------
Xxxxxx Xxxxxxxxxx, President
MT PARTNERS, L.P.
By: CARDINAL HOLDING CORPORATION
Its: General Partner
By:
---------------------------------
Xxxxxxxx Xxxxx, President
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
MERCURY FUND NO. 1, LTD.
By: MERCURY VENTURES, LTD.
Its: General Partner
By: MERCURY MANAGEMENT, L.L.C.
Its: General Partner
By:
---------------------------------
Xxxxx Xxxx, Manager
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
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Exhibit A
to
Warrant Agreement
Initial Warrants
22
THE WARRANT SECURITIES TO BE RECEIVED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS. THE WARRANT SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR
CONSIDERATION, IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT AND
QUALIFICATION WITH RESPECT TO THE WARRANT SECURITIES UNDER THE SECURITIES ACT
AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH
QUALIFICATION AND REGISTRATION.
COMMON STOCK PURCHASE WARRANT
January 25, 2000
Capitalized terms used and not otherwise defined in this Warrant shall have the
meanings respectively assigned to them in the Warrant Agreement, dated as of the
date hereof, by and between the Company and Holder.
MigraTEC, Inc., a Florida corporation (the "Company"), does hereby certify and
agree that, for good and valuable consideration (the existence, sufficiency and
receipt of which are hereby acknowledged by the Company), MT Partners, L.P., a
Texas limited partnership, its successor, and assigns ("Holder"), hereby is
entitled to purchase from the Company, during the term set forth in Section 1
hereof, up to an aggregate amount of 1,053,333 shares (the "Exercise Quantity")
of duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company (the "Common Stock"), all upon the terms and
provisions and subject to adjustment of such Exercise Quantity provided in the
Warrant Agreement and this Common Stock Purchase Warrant (the "Warrant"). The
exercise price per share of Common Stock for which this Warrant is exercisable
shall be $0.20, as adjusted from time to time pursuant to the terms of this
Warrant and the Warrant Agreement (the "Exercise Price").
1. Term of the Warrant. The term of this Warrant commences as of the
date hereof, and shall expire at 5:00 P.M., Central time, on January 25, 2005.
2. Exercise of Warrant.
(a) This Warrant may be exercised by the Holder of this
Warrant at any time during the term hereof, in whole or in part, from time to
time (but not for fractional shares, unless this Warrant is exercised in whole),
by presentation and surrender of this Warrant to the Company, together with the
annexed Exercise Form duly completed and executed and payment
1
23
in the aggregate amount equal to the Exercise Price multiplied by the number of
shares of Common Stock being purchased. At the option of Holder, payment of the
Exercise Price may be made either by (i) certified check payable to the order of
the Company, (ii) surrender of certificates then held representing, or deduction
from the number of shares issuable upon exercise of this Warrant, of that number
of shares which has an aggregate Fair Value determined in accordance with the
Warrant Agreement on the date of exercise equal to the aggregate Exercise Price
for all shares to be purchased pursuant to this Warrant, or (iii) by any
combination of the foregoing methods. Within five business days of the Company's
receipt of this Warrant, the completed and signed Exercise Form and the
requisite payment (if any), the Company shall issue and deliver (or cause to be
delivered) to the exercising Holder stock certificates aggregating the number of
shares of Warrant Securities purchased.
(b) This Warrant may be exercised by the Holder of this
Warrant at any time in accordance with Section 2(a) hereof (but not for
fractional shares, unless this Warrant is exercised in whole), by presentation
and surrender of this Warrant to the Company, together with the annexed Exercise
Form duly completed and executed and payment in the aggregate amount equal to
the Exercise Price multiplied by the number of shares of Common Stock being
purchased. At the option of Holder, payment of the Exercise Price may be made
either by (i) certified check payable to the order of the Company, (ii)
surrender of certificates then held representing, or deduction from the number
of shares issuable upon exercise of this Warrant, of that number of shares which
has an aggregate Fair Value determined in accordance with this Agreement on the
date of exercise equal to the aggregate Exercise Price for all shares to be
purchased pursuant to this Warrant, or (iii) by a combination of the foregoing
methods. Within five business days of the Company's receipt of this Warrant, the
completed and signed Exercise Form and the requisite payment (if any), the
Company shall issue and deliver (or cause to be delivered) to the exercising
Holder stock certificates aggregating the number of shares of Warrant Securities
purchased.
(c) In the event the Holder of this Warrant desires that any
or all of the stock certificates to be issued upon the exercise hereof be
registered in a name or names other than that of the Holder of this Warrant, the
Holder must (i) so request in writing at the time of exercise if the transfer is
not a registered transfer, and (ii) provide to the Company evidence reasonably
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the Securities Act.
(d) Upon the due exercise by the Holder of this Warrant,
whether in whole or in part, the Holder (or any other person to whom a stock
certificate is to be so issued) shall be deemed for all purposes to have become
the Holder of record of the shares of Common Stock for which this Warrant has
been so exercised, effective immediately prior to the close of business on the
date this Warrant, the completed and signed Exercise Form and the requisite
payment were duly delivered to the Company, irrespective of the date of actual
delivery of certificates representing such shares of Common Stock so issued.
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3. Surrender of Warrant; Expenses.
(a) Whether in connection with the exercise, exchange or
registration of transfer or replacement of this Warrant, surrender of this
Warrant shall be made to the Company during normal business hours on a business
day (unless the Company otherwise permits) at the executive offices of the
Company or to such other office or duly authorized representative of the Company
as from time to time may be designated by the Company by written notice given to
the Holder of this Warrant.
(b) The Company shall pay all costs and expenses incurred in
connection with the exercise, registering, exchange, transfer or replacement of
this Warrant, including the costs of preparation, execution and delivery of
warrants and stock certificates, and shall pay all taxes (other than any taxes
measured by the income of any Person other than the Company) and other charges
imposed by law payable in connection with the transfer or replacement of this
Warrant.
(c) The Company shall deliver or cause to be delivered to the
Holder exercising this Warrant or any portion hereof certificates representing
the shares of Common Stock issuable upon such exercise within five business days
of the surrender and delivery by such Holder to the Company of this Warrant and
a duly completed Exercise Form and the requisite payment.
4. Warrant Register; Exchange; Transfer; Loss.
(a) The Company at all times shall maintain at its chief
executive offices an open register for all Warrants, in which the Company shall
record the name and address of each Person to whom a Warrant has been issued or
transferred, the number of shares of Common Stock or other securities
purchasable hereunder and the corresponding purchase prices.
(b) This Warrant may be exchanged for two or more warrants
entitling the identical Holder hereof to purchase the same aggregate Exercise
Quantity at the same Exercise Price per share and otherwise having the same
terms and provisions as this Warrant. The identical Holder may request such an
exchange by surrender of this Warrant to the Company, together with a written
exchange request specifying the desired number of warrants and allocation of the
Exercise Quantity purchasable under the existing Warrant.
(c) This Warrant may be transferred only in accordance with
the provisions of Article VII of the Warrant Agreement, in whole or in part, by
the Holder or any duly authorized representative of such Holder. A transfer may
be registered with the Company by submission to it of this Warrant, together
with the annexed Assignment Form duly completed and executed, and if the
transfer is not a registered transfer, evidence reasonably satisfactory to the
Company that such transfer is in compliance with federal and state securities
laws. Within five business days
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after the Company's receipt of this Warrant and the Assignment Form so completed
and executed, the Company will issue and deliver to the transferee a new Warrant
representing the portion of the Exercise Quantity transferred at the same
Exercise Price per share and otherwise having the same terms and provisions as
this Warrant, which the Company will register in the new Holder's name.
(d) Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and (a) in the case of loss, theft or destruction,
upon receipt by the Company of indemnity reasonably satisfactory to it, or (b)
in the case of mutilation, upon surrender and cancellation thereof, the Company,
at its expense, will execute, register and deliver, in lieu thereof, a new
certificate or instrument for (or covering the purchase of) this Warrant.
(e) The Company will not close its books against the transfer
of this Warrant or any of the Warrant Securities in any manner which interferes
with the timely exercise of this Warrant. The Company will from time to time
take all such action as may be necessary to assure that the par value per share
of the unissued Common Stock acquirable upon exercise of this Warrant is at all
times equal or less than the Exercise Price then in effect.
5. Rights and Obligations of the Company and the Holder. The Company
and the Holder of this Warrant are entitled to the rights and bound by the
obligations set forth in the Warrant Agreement, all of which rights and
obligations are hereby incorporated by reference herein. This Warrant shall not
entitle its Holder to any rights of a stockholder in the Company (other than as
provided in Section 2(c) of this Warrant and the Warrant Agreement).
4
26
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized representative and its corporate seal, if any, to be
impressed hereupon and attested to by its Secretary or Assistant Secretary.
MIGRATEC, INC.
By:
--------------------------------------
Xxxxxx Xxxxxxxxxx, President
5
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MigraTEC, Inc.
EXERCISE FORM
MigraTEC, Inc. (the "Company")
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, ______ shares of common stock of the Company (the "Warrant
Securities"), and requests that certificates for the Warrant Securities be
issued in the name of:
---------------------------------------------------------------
(Please print or Type Name, Address and Social Security Number)
---------------------------------------------------------------
---------------------------------------------------------------
and, if said number of shares of Warrant Securities shall not be all the Warrant
Securities purchasable hereunder, that a new Warrant Certificate for the balance
of the Warrant Securities purchasable under the within Warrant Certificate be
registered in the name of the undersigned Holder or his Assignee as below
indicated and delivered to the address stated below.
Dated:
------------------
Name of Holder
or Assignee:
----------------------------
(Please Print)
Address:
----------------------------
----------------------------
Signature:
----------------------------
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
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ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
the right to purchase ______ shares of common stock represented by the within
Warrant Certificate unto, and requests that a certificate for such Warrant be
issued in the name of:
-------------------------------------------------------------
(Name and Address of Assignee Must be Printed or Typewritten)
-------------------------------------------------------------
-------------------------------------------------------------
The undersigned hereby irrevocably constitutes and appoints
________________________ Attorney to transfer said Warrant on the books of the
Company, with full power of substitution in the premises and, if said number of
shares of common stock shall not be all of the common stock purchasable under
the within Warrant Certificate, that a new Warrant Certificate for the balance
of the common stock purchasable under the within Warrant Certificate be
registered in the name of the undersigned Holder and delivered to such Holder's
address as then set forth on the Company's books.
Dated:
------------------ ------------------------------------
Signature of Registered Holder
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
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THE WARRANT SECURITIES TO BE RECEIVED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS. THE WARRANT SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR
CONSIDERATION, IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT AND
QUALIFICATION WITH RESPECT TO THE WARRANT SECURITIES UNDER THE SECURITIES ACT
AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH
QUALIFICATION AND REGISTRATION.
COMMON STOCK PURCHASE WARRANT
January 25, 2000
Capitalized terms used and not otherwise defined in this Warrant shall have the
meanings respectively assigned to them in the Warrant Agreement, dated as of the
date hereof, by and between the Company and Holder.
MigraTEC, Inc., a Florida corporation (the "Company"), does hereby certify and
agree that, for good and valuable consideration (the existence, sufficiency and
receipt of which are hereby acknowledged by the Company), Mercury Fund No. 1,
Ltd., a Texas limited partnership company, its successor, and assigns
("Holder"), hereby is entitled to purchase from the Company, during the term set
forth in Section 1 hereof, up to an aggregate amount of 946,600 shares (the
"Exercise Quantity") of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock of the Company (the "Common Stock"), all
upon the terms and provisions and subject to adjustment of such Exercise
Quantity provided in the Warrant Agreement and this Common Stock Purchase
Warrant (the "Warrant"). The exercise price per share of Common Stock for which
this Warrant is exercisable shall be $0.20, as adjusted from time to time
pursuant to the terms of this Warrant and the Warrant Agreement (the "Exercise
Price").
1. Term of the Warrant. The term of this Warrant commences as of the
date hereof, and shall expire at 5:00 P.M., Central time, on January 25, 2005.
2. Exercise of Warrant.
(a) This Warrant may be exercised by the Holder of this
Warrant at any time during the term hereof, in whole or in part, from time to
time (but not for fractional shares, unless this Warrant is exercised in whole),
by presentation and surrender of this Warrant to the Company, together with the
annexed Exercise Form duly completed and executed and payment
1
30
in the aggregate amount equal to the Exercise Price multiplied by the number of
shares of Common Stock being purchased. At the option of Holder, payment of the
Exercise Price may be made either by (i) certified check payable to the order of
the Company, (ii) surrender of certificates then held representing, or deduction
from the number of shares issuable upon exercise of this Warrant, of that number
of shares which has an aggregate Fair Value determined in accordance with the
Warrant Agreement on the date of exercise equal to the aggregate Exercise Price
for all shares to be purchased pursuant to this Warrant, or (iii) by any
combination of the foregoing methods. Within five business days of the Company's
receipt of this Warrant, the completed and signed Exercise Form and the
requisite payment (if any), the Company shall issue and deliver (or cause to be
delivered) to the exercising Holder stock certificates aggregating the number of
shares of Warrant Securities purchased.
(b) This Warrant may be exercised by the Holder of this
Warrant at any time in accordance with Section 2(a) hereof (but not for
fractional shares, unless this Warrant is exercised in whole), by presentation
and surrender of this Warrant to the Company, together with the annexed Exercise
Form duly completed and executed and payment in the aggregate amount equal to
the Exercise Price multiplied by the number of shares of Common Stock being
purchased. At the option of Holder, payment of the Exercise Price may be made
either by (i) certified check payable to the order of the Company, (ii)
surrender of certificates then held representing, or deduction from the number
of shares issuable upon exercise of this Warrant, of that number of shares which
has an aggregate Fair Value determined in accordance with this Agreement on the
date of exercise equal to the aggregate Exercise Price for all shares to be
purchased pursuant to this Warrant, or (iii) by a combination of the foregoing
methods. Within five business days of the Company's receipt of this Warrant, the
completed and signed Exercise Form and the requisite payment (if any), the
Company shall issue and deliver (or cause to be delivered) to the exercising
Holder stock certificates aggregating the number of shares of Warrant Securities
purchased.
(c) In the event the Holder of this Warrant desires that any
or all of the stock certificates to be issued upon the exercise hereof be
registered in a name or names other than that of the Holder of this Warrant, the
Holder must (i) so request in writing at the time of exercise if the transfer is
not a registered transfer, and (ii) provide to the Company evidence reasonably
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the Securities Act.
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(d) Upon the due exercise by the Holder of this Warrant,
whether in whole or in part, the Holder (or any other person to whom a stock
certificate is to be so issued) shall be deemed for all purposes to have become
the Holder of record of the shares of Common Stock for which this Warrant has
been so exercised, effective immediately prior to the close of business on the
date this Warrant, the completed and signed Exercise Form and the requisite
payment were duly delivered to the Company, irrespective of the date of actual
delivery of certificates representing such shares of Common Stock so issued.
3. Surrender of Warrant; Expenses.
(a) Whether in connection with the exercise, exchange or
registration of transfer or replacement of this Warrant, surrender of this
Warrant shall be made to the Company during normal business hours on a business
day (unless the Company otherwise permits) at the executive offices of the
Company or to such other office or duly authorized representative of the Company
as from time to time may be designated by the Company by written notice given to
the Holder of this Warrant.
(b) The Company shall pay all costs and expenses incurred in
connection with the exercise, registering, exchange, transfer or replacement of
this Warrant, including the costs of preparation, execution and delivery of
warrants and stock certificates, and shall pay all taxes (other than any taxes
measured by the income of any Person other than the Company) and other charges
imposed by law payable in connection with the transfer or replacement of this
Warrant.
(c) The Company shall deliver or cause to be delivered to the
Holder exercising this Warrant or any portion hereof certificates representing
the shares of Common Stock issuable upon such exercise within five business days
of the surrender and delivery by such Holder to the Company of this Warrant and
a duly completed Exercise Form and the requisite payment.
4. Warrant Register; Exchange; Transfer; Loss.
(a) The Company at all times shall maintain at its chief
executive offices an open register for all Warrants, in which the Company shall
record the name and address of each Person to whom a Warrant has been issued or
transferred, the number of shares of Common Stock or other securities
purchasable hereunder and the corresponding purchase prices.
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(b) This Warrant may be exchanged for two or more warrants
entitling the identical Holder hereof to purchase the same aggregate Exercise
Quantity at the same Exercise Price per share and otherwise having the same
terms and provisions as this Warrant. The identical Holder may request such an
exchange by surrender of this Warrant to the Company, together with a written
exchange request specifying the desired number of warrants and allocation of the
Exercise Quantity purchasable under the existing Warrant.
(c) This Warrant may be transferred only in accordance with
the provisions of Article VII of the Warrant Agreement, in whole or in part, by
the Holder or any duly authorized representative of such Holder. A transfer may
be registered with the Company by submission to it of this Warrant, together
with the annexed Assignment Form duly completed and executed, and if the
transfer is not a registered transfer, evidence reasonably satisfactory to the
Company that such transfer is in compliance with federal and state securities
laws. Within five business days after the Company's receipt of this Warrant and
the Assignment Form so completed and executed, the Company will issue and
deliver to the transferee a new Warrant representing the portion of the Exercise
Quantity transferred at the same Exercise Price per share and otherwise having
the same terms and provisions as this Warrant, which the Company will register
in the new Holder's name.
(d) Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and (a) in the case of loss, theft or destruction,
upon receipt by the Company of indemnity reasonably satisfactory to it, or (b)
in the case of mutilation, upon surrender and cancellation thereof, the Company,
at its expense, will execute, register and deliver, in lieu thereof, a new
certificate or instrument for (or covering the purchase of) this Warrant.
(e) The Company will not close its books against the transfer
of this Warrant or any of the Warrant Securities in any manner which interferes
with the timely exercise of this Warrant. The Company will from time to time
take all such action as may be necessary to assure that the par value per share
of the unissued Common Stock acquirable upon exercise of this Warrant is at all
times equal or less than the Exercise Price then in effect.
5. Rights and Obligations of the Company and the Holder. The Company
and the Holder of this Warrant are entitled to the rights and bound by the
obligations set forth in the Warrant Agreement, all of which rights and
obligations are hereby incorporated by reference herein. This Warrant shall not
entitle its Holder to any rights of a stockholder in the Company (other than as
provided in Section 2(c) of this Warrant and the Warrant Agreement).
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized representative and its corporate seal, if any, to be
impressed hereupon and attested to by its Secretary or Assistant Secretary.
MIGRATEC, INC.
By:
--------------------------------------
Xxxxxx Xxxxxxxxxx, President
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MigraTEC, Inc.
EXERCISE FORM
MigraTEC, Inc. (the "Company")
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, ________ shares of common stock of the Company (the "Warrant
Securities"), and requests that certificates for the Warrant Securities be
issued in the name of:
---------------------------------------------------------------
(Please print or Type Name, Address and Social Security Number)
---------------------------------------------------------------
---------------------------------------------------------------
and, if said number of shares of Warrant Securities shall not be all the Warrant
Securities purchasable hereunder, that a new Warrant Certificate for the balance
of the Warrant Securities purchasable under the within Warrant Certificate be
registered in the name of the undersigned Holder or his Assignee as below
indicated and delivered to the address stated below.
Dated:
------------------
Name of Holder
or Assignee:
------------------------------
(Please Print)
Address:
------------------------------
------------------------------
Signature:
------------------------------
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, unless these Warrant have been assigned.
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ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
the right to purchase ______ shares of common stock represented by the within
Warrant Certificate unto, and requests that a certificate for such Warrant be
issued in the name of:
-------------------------------------------------------------
(Name and Address of Assignee Must be Printed or Typewritten)
-------------------------------------------------------------
-------------------------------------------------------------
The undersigned hereby irrevocably constitutes and appoints __________________
Attorney to transfer said Warrant on the books of the Company, with fun power of
substitution in the premises and, if said number of shares of common stock shall
not be all of the common stock purchasable under the within Warrant Certificate,
that a new Warrant Certificate for the balance of the common stock purchasable
under the within Warrant Certificate be registered in the name of the
undersigned Holder and delivered to such Holder's address as then set forth on
the Company's books.
Dated:
----------------------------
Signature of Registered Holder
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
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