EXHIBIT 10.6
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THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT AND ANY SUCH
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER SAID ACT AND ALL OTHER
APPLICABLE SECURITIES LAWS UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
WARRANT
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WARRANT T0 PURCHASE SHARES OF COMMON STOCK
OF INFORMATION ANALYSIS INCORPORATED
Date of Issuance: June 1, 1989
THIS CERTIFIES that, for value received, Xxxxxx XxXxxxx, or his
registered assigns (the "holder"), is entitled to purchase, subject to the
provisions of this warrant, from Information Analysis Incorporated, a Virginia
Corporation (the "Company"), one thousand (1,000) shares of the One Cent ($0.01)
par value Common Stock of the Company at a purchase price of Seven Dollars and
Fifty Cents ($7.5O) per share, as such number of shares and price may be
adjusted in accordance with the provisions of Article V hereof. This warrant is
hereinafter referred to as the "Warrant" and the shares of Common Stock issuable
pursuant to the terms hereof are hereinafter sometimes referred to as "Warrant
Shares."
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ARTICLE I
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise
requires, the following terms shall have the following respective meanings:
"Act": the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.
"Common Stock": the Company's authorized Common Stock with One Cent
($.01) par value per share as such class existed on the date of issuance of this
Warrant.
"Commission": the Securities and Exchange Commission, or any other
federal agency then administering the Act.
"Company": Information Analysis Incorporated, a Virginia corporation,
with principal offices located at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxx,
Xxxxxxxx 00000, and any other corporation assuming or required to assume the
Warrant pursuant to Article IX.
"Person": any individual, corporation, partnership, trust,
unincorporated organization and any government, and any political subdivision,
instrumentality or agency thereof.
"Purchase Price": the purchase price for each Warrant Share
purchasable under this Warrant which shall be $7.50 subject to adjustment in
accordance with Article V hereof.
"Warrant Office": see Section 3.1.
"Warrant Shares": the Shares of Common Stock purchasable by the holder
of this Warrant upon the exercise of this Warrant.
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ARTICLE II
EXERCISE OF WARRANT
2.1 Method of Exercise. To exercise this Warrant, which may be
exercised in whole or in part at anytime and from time to time, prior to its
expiration as determined in Article X hereof, the holder hereof shall deliver
to the Company at the Warrant Office designated pursuant to Section 3.1: (a) a
written notice, in substantially the form of the Subscription Notice attached
hereto as Exhibit 2.1, of such holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be
purchased; (b) a check payable to the order of the Company in an amount equal
to the Purchase Price as set forth in Section 5.1 hereof for each of the shares
of Common Stock being purchased; and (c) this Warrant. The Company shall, as
promptly as practicable and in any event within 14 days thereafter, execute and
deliver or cause to be executed and delivered, in accordance with said
notice, a certificate or certificates representing the aggregate number
of shares of Common Stock specified in said notice. The stock certificate
or certificates so delivered shall be in denominations of shares as may be
specified in said notice and shall be issued in the name of the holder or
such other name as shall be designated in said notice. At the time of
delivery of the certificate or certificates, appropriate notation will be
made on the Warrant designating the number of shares purchased and this Warrant
shall be returned to the
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holder if this Warrant has been exercised in part. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issuance and delivery of stock certificates, except that, in case stock
certificates shall be registered in a name or names other than the name of the
holder of this Warrant, funds sufficient to pay all stock transfer taxes which
shall be payable upon the issuance of stock certificates shall be paid by the
holder hereof at the time of delivering the notice of exercise mentioned above
or promptly upon receipt of a written request of the Company for payment.
2.2 Shares to be Fully Paid and Nonassessable. All shares of Common
Stock issued upon the exercise of this Warrant shall be validity issued,
fully paid and nonassessable.
2.3 Legend on Warrant Shares. Each certificate for shares initially
issued upon exercise Of this Warrant, unless at the time of exercise such
shares are registered under the Act, shall bear the following legend (and
any additional legend required by any national securities exchanges upon which
such shares may, at the time of such exercise, be listed or under applicable
securities laws):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("the Act"),
or the securities laws of any state. They may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of in the absence of registration under said Act and all
other applicable securities laws, unless an exemption from
registration is available."
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Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the Act of
the securities represented thereby) shall also bear the above legend unless, in
the opinion of counsel to the Company, the securities represented thereby need
no longer be subject to the restrictions on transferability. The provisions of
Article IV shall be binding upon all subsequent holders of this Warrant.
2.4 Acknowledgment of Continuing Obligation. The Company will, at the
time of any exercise of this Warrant, in whole or in part, upon request of the
holder hereof, acknowledge in writing its continuing obligation to such holder
in respect of any rights to which the holder shall continue to be entitled
after exercise in accordance with this Warrant; provided, however, that the
failure of the holder to make any such request shall not affect the continuing
obligation of the Company to the holder in respect of such rights.
ARTICLE III
WARRANT OFFICE: TRANSFER, DIVISION
OF COMBINATION OF WARRANTS
3.1 Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall
initially be the Company's location set forth in Article I, and may
subsequently be such other office of the Company or of any transfer agent of
the Common Stock in
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the continental United States as to which written notice has previously been
given to all of the holders of the Warrants.
3.2 Ownership of Warrant. The Company may deem and treat the Person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article III.
3.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Office books for the registration of permitted transfers of this
Warrant. Subject to the provisions of Article IV, this Warrant and all rights
hereunder are transferable, in whole or in part, on the books at that office
upon surrender of this Warrant at that office, together with a written
assignment of this Warrant duly executed by the holder hereof or his duly
authorized agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of the transfer. Subject to Article IV, upon surrender
and payment, the Company shall execute and deliver a new Warrant in the name of
the assignee, note thereon the number of Warrant Shares theretofore purchased
under this Warrant, and this Warrant shall promptly be canceled. A Warrant may
be exercised by a new holder for the purchase of shares of Common Stock without
having a new Warrant issued.
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3.4 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of new Warrants
hereunder.
ARTICLE IV
RESTRICTIONS ON TRANSFER
4.1 Restrictions on Transfer. Notwithstanding any provisions
contained in this Warrant to the contrary, this Warrant shall not be exercisable
or transferable except upon the conditions specified in this Article IV, which
conditions are intended, among other things, to ensure compliance with the
provisions of the Act in respect of the exercise or transfer of the Warrant. The
holder of this Warrant, by acceptance hereof, agrees that he will not transfer
this Warrant prior to delivery to the Company of any required opinion of the
holder's counsel (as the opinion and counsel are described in Section 4.2).
4.2 Opinion of Counsel. In connection with any transfer of this
Warrant, the following provisions shall apply:
(a) If in the opinion of counsel acceptable to the Company,
proposed transfer of this Warrant may be effected without registration of this
Warrant under the Act, the holder of this Warrant shall be entitled to transfer
this Warrant in accordance with the proposed method of disposition; provided,
however, that if the method of disposition would, in the opinion of such
counsel, require that the Company take any action or execute and file with the
Commission or deliver to
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the holder or any other person any form or document in order to establish the
entitlement of the holder to take advantage of such method of disposition, the
Company agrees, at the cost of the holder, to promptly take any necessary action
or execute and file or deliver any necessary form or document. Notwithstanding
the foregoing, in no event will the Company be obligated to effect a
registration under the Act so as to permit the proposed transfer of this Warrant
or take any action which will result in more than one transfer of this Warrant
within each calendar year.
(b) If in the opinion of such counsel, the proposed transfer
of this Warrant may not be effected without registration of this Warrant under
the Act, the holder of this Warrant shall not be entitled to transfer
this Warrant until registration is effective.
ARTICLE V
EXERCISE PRICE
5.1 Determination of Purchase Price. The Purchase Price for each
Warrant Share purchasable hereunder shall be Seven Dollars and Fifty Cents
($7.50); provided, however, if the Company shall subdivide its shares of Common
Stock by stock split, stock dividend or otherwise, the purchase Price shall
proportionately decrease and, conversely if the Company shall combine its
shares of Common Stock by stock combination, reverse split or otherwise, the
Purchase Price shall proportionately increase.
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5.2 Notice to Holder. Whenever the Company takes any action which
causes the Purchase Price to change, the Company will provide the holder
hereof with written notice of such change and the price at which this
Warrant is then exercisable. Such notice will be provided not more than 10 days
after any such action has occurred.
ARTICLE VI
NUMBER OF WARRANT SHARES
The number of Warrant Shares initially issuable upon exercise of this
Warrant shall be one thousand (1,000); provided, however, if, after issuance
of this Warrant, the Company shall subdivide its shares of Common Stock by
stock split, stock dividend or otherwise, the number of Warrant Shares then
issuable hereunder shall proportionately increase, and conversely, if the
Company shall combine its shares of Common Stock by stock combination,
reverse split or otherwise, the number of Warrant Shares then issuable
hereunder shall proportionately decrease.
ARTICLE VII
ADDITIONAL NOTICES TO WARRANT HOLDER
In addition to any other notice required hereunder, the Company shall
provide the holder with a copy of any notice which the Company is required to
provide those Persons holding shares of Common Stock on the same date such
Persons receive such notice.
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ARTICLE VIII
DISTRIBUTIONS, LIQUIDATION OR DISSOLUTION
8.1 Certain Distributions. In case the Company shall, at any time
prior to the Expiration Date set forth in Article X hereof, make any
distribution of its assets to holders of its Common Stock as a partial
liquidation distribution or by way of return of capital other than as a
dividend payable out of earnings or any surplus legally available for
dividends under the laws of the Commonwealth of Virginia, then the holder,
upon the exercise of this Warrant prior to any such distribution but after
the date of record for the determination of those holders of Common Stock
entitled to such distribution of assets, shall be entitled to receive, in
addition to the shares of Common Stock issuable on such exercise, upon such
distribution the amount of such assets (or at the option of the Company a sum
equal to the value thereof at the time of such distribution to holders of Common
Stock as such value is determined by the Board of Directors of the company in
good faith) which would have been payable to the holder had he been the holder
of record of such shares of Common Stock on the record date for the
determination of those holders of Common Stock entitled to such
distribution.
8.2 Dissolution or Liquidation. In case the Company shall, at any
time prior to the Expiration Date set forth in Article X hereof, dissolve,
liquidate or wind up its affairs, the holder shall be entitled, upon the
exercise of this Warrant
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and prior to any such distribution in dissolution or liquidation, to receive on
such exercise, in lieu of the shares of Common Stock which the holder would have
been entitled to receive, the same kind and amount of assets as would have been
distributed or paid to the holder upon any such dissolution, liquidation or
winding up with respect to such shares of Common Stock had the holder been the
holder of record of such shares of Common Stock on the record date for the
determination of those holders of Common Stock entitled to receive any such
liquidation distribution.
ARTICLE IX
RECLASSIFICATION, REORGANIZATION OR MERGER
In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company, or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a subsidiary in which merger the Company
is the continuing corporation or which does not result in any
reclassification, capital reorganization or other change of outstanding
shares of Common Stock), the Company shall cause effective provision to be
made so that the holder hereof shall have the right thereafter, by exercising
this Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation or merger by a holder of the
number of shares of Common Stock which might have been
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purchased upon exercise of this Warrant immediately prior to such
reclassification, capital reorganization, change, consolidation or merger.
Any such provision shall include provision for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments herein provided
of the Purchase Price and the number of Warrant Shares purchasable and
receivable upon the exercise of this Warrant. The foregoing provisions of this
Article IX shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations and mergers.
ARTICLE X
EXPIRATION
This warrant shall terminate on the Expiration Date and may not be
exercised on or after such date. The Expiration Date shall be June 30, 1999.
ARTICLE XI
CERTAIN COVENANTS OF THE COMPANY
The Company covenants and agrees that it will reserve and set apart
and have at all times, free from pre-emptive rights, a number of shares of
authorized but unissued Common Stock or other securities or property
deliverable upon the exercise of this Warrant sufficient to enable it at any
time to fulfill all its obligations hereunder.
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ARTICLE XII
MISCELLANEOUS
12.1 Entire Agreement. This Warrant contains the entire agreement
between the holder hereof and the Company with respect to the purchase of the
Warrant Shares and supersedes all prior arrangements or understandings with
respect thereto.
12.2 Waiver and Amendment. Any term or provision of this Warrant may
be waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant must be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any may affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with any
term or condition of this Warrant.
12.3 Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
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12.4 Filing of Warrant. A copy of this Warrant shall be filed in the
records of the Company.
12.5 Notice. Any notice or other document required or permitted to be
given or delivered to the holder hereof shall be delivered personally, or sent
by certified or registered mail, to each such holder at the last address
shown on the books of the Company maintained at the Warrant Office for the
registration, and the registration of transfer, of the Warrant or at any more
recent address of which the holder hereof shall have notified the Company in
writing. Any notice or other document required or permitted to be given or
delivered to the Company shall be delivered, or sent by certified or registered
mail, to the Warrant office, attention: President, or such other address within
the United States of America as shall have been furnished by the Company to the
holder hereof.
12.6 Limitation of Liability; Not Stockholders. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notice other than as herein
expressly provided in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the
holder hereof to purchase Warrant Shares, and no enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any Warrant
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Shares or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
12.7 Loss, Destruction, Etc. of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
the Warrant, and in the case of any such loss, theft or destruction, upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation,
upon surrender and cancellation of the Warrant, the Company will make and
deliver a new Warrant, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Warrant. Any Warrant issued under the provisions of this Section
12.7 in lieu of any Warrant alleged to be lost, destroyed or stolen, or
in lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name by its President and its corporate seal to be impressed hereon and
attested by this Secretary.
THE COMPANY:
INFORMATION ANALYSIS INCORPORATED
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, President
[Corporate Seal]
Attest:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
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EXHIBIT 2.1
TO WARRANT
SUBSCRIPTION NOTICE
Dated: ____________
The undersigned hereby irrevocably elects to exercise his right to
purchase _____ shares of the Common Stock, with one cent ($0.01) par value
per share, of Information Analysis Incorporated, such right being pursuant
to a Warrant dated June __, 1989, and as issued to the undersigned by
Information Analysis Incorporated, and remits herewith the sum of $______
in payment for same in accordance with the Exercise Price specified in Section
5.1 of said Warrant.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
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(Please typewrite or print in block letters)
Address
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Signature
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Shares Heretofore Purchased Under Warrant
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