Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR AN EXEMPTION THEREFROM.
THIS WARRANT MAY NOT BE EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES LAWS TO THE REASONABLE SATISFACTION OF THE COMPANY
AND LEGAL COUNSEL FOR THE COMPANY.
Void after 5:00 P.M., Frankfort, Kentucky Right to Purchase Shares of the
time, on August 21, 2007 (the "Warrant Common Stock of PlanGraphics, Inc.
Expiration Date").
PLANGRAPHICS, INC.
STOCK PURCHASE WARRANT
PlanGraphics, Inc., a Colorado corporation (the "Company"), hereby
certifies that for value received, Nutmeg Group, LLC, a Virgin Islands limited
liability company, 3346 Commercial, Northbrook, Illinois 60062, EIN 660617525 or
its permitted assigns (the "Holder"), is entitled to purchase, subject to the
terms and conditions hereinafter set forth, that number of fully paid and
nonassessable shares ("Shares") of the common stock of the Company, no par value
("Common Stock") set forth below, at an exercise price equal to an aggregate
total of One Dollar ($1.00) (the "Warrant Price").
11. Term. The Holder may exercise this Warrant for that number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
that will constitute eighty (80%) of the Common Stock outstanding on a fully
diluted basis, determined immediately after the exercise of the Warrant upon the
earlier of (a) the consummation of an M&A Transaction and distribution of the
consideration received by the Company in such M&A Transaction to the Company's
shareholders, (ii) the completion of a Spin-Off Transaction, (iii) February 17,
2007 but only if the Company completes the acquisition of a Target Company (as
defined in the Series A Stock Purchase Agreement dated August 21, 2006 between
the Company and the Holder) on or prior to such date, (iv) forty-five (45) days
after a Target Company is acquired by the Company but only if such acquisition
is completed after February 17, 2007, or (v) August 21, 2007 (the "Warrant
Expiration Date"). For purposes of this Warrant, "M&A Transaction" is defined as
any merger, reorganization, sale of all or substantially all of the assets of
the Company or PlanGraphics, Inc., a Maryland corporation and wholly owned
subsidiary of the Company ("PG-Maryland"), or any other transaction pursuant to
which the beneficial ownership of the securities possessing more than 50% of the
total combined voting power of the Company' s outstanding securities is acquired
by another person or entity and "Spin-Off Transaction" is defined as the
Company's dividend or distribution of all of the outstanding capital stock of
PG-Maryland to the shareholders of the Company (excluding Holder), or a similar
transaction pursuant to which the Company is divested of all ownership interests
in PG-Maryland. This Warrant shall expire on the Warrant Expiration Date. The
Company shall be under no obligation to furnish to any Holder a notice of the
expiration of this Warrant.
12. Method of Exercise; Payment.
(a) Subject to Section 1 hereof, the purchase right represented by
this Warrant may be exercised by any Holder hereof, in whole or in part, by the
surrender of this Warrant (together with a duly executed notice of exercise,
substantially in the form attached hereto as Exhibit A) at the principal office
of the Company and the payment to the Company, in immediately available funds,
of an amount equal to the Warrant Price.
(b) In the event of an exercise of the purchase right represented by
this Warrant, certificates for the Shares of stock so purchased shall be
delivered to the exercising Holder hereof within thirty (30) days of the
effective date of such purchase. Upon the effective date of such purchase, the
exercising Holder shall be deemed to be the holder of record of the Shares, even
if a certificate representing such Shares has not been delivered to such Holder
or if such Shares have not yet been set forth on the stock transfer books of the
Company.
13. Stock Fully Paid; Reservation of Shares. All Shares which may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issue upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of Shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant.
14. Fractional Shares. No fractional Shares of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional Shares
the Company shall make a cash payment therefore in an amount determined in such
reasonable manner as may be prescribed by the board of directors of the Company.
15. Compliance with Securities Act. The Holders, by acceptance hereof,
agree that this Warrant and the Shares to be issued upon exercise hereof are
being acquired for investment and that no Holder will offer, sell or otherwise
dispose of this Warrant or any Shares to be issued upon exercise hereof except
under circumstances which will not result in a violation of the Securities Act
of 1933, as amended (the "Securities Act"). Upon any acquisition or exercise of
this Warrant or any portion thereof, the exercising Holder shall confirm in
writing, in a form attached hereto as Exhibit B, that the Shares so purchased
are being acquired for investment and not with a view toward distribution or
resale other than by a registration statement filed by the Company. In addition,
in the absence of such registration, the exercising Holder shall provide such
additional information regarding such Holder's financial and investment
background as the Company may reasonably request. All Shares issued upon
exercise of this Warrant (unless registered under the Securities Act) shall be
stamped or imprinted with a legend in substantially the following form:
The Shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Securities Act") or the
securities laws of any state and are "restricted securities" as that
term is defined in Rule 144 under the Securities Act. Such Shares may
not be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the Securities Act and
the applicable state securities laws or pursuant to an exemption from
registration thereunder, the availability of which is to be
established to the satisfaction of counsel to the issuer.
16. Rights of Stockholders. Holder shall not be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon Holder,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise before the Warrant or Warrants
shall have been exercised and the Shares purchasable upon the exercise hereof
shall have become deliverable, as provided herein.
17. Governing Law. The terms and conditions of this Warrant shall be
governed by and construed in accordance with Colorado law.
18. Miscellaneous. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a part
hereof. This Warrant and any term hereof may be changed, waived, discharged or
terminated by an instrument in writing signed by the Company and the registered
Holder hereof. All notices and other communications from the Company to Holder
shall be mailed by first-class registered or certified mail, postage prepaid, to
the address furnished to the Company in writing by the last Holder of this
Warrant who shall have furnished an address to the Company in writing.
PLANGRAPHICS, INC.
By:
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John Antenucci,
President and Chief Executive Officer
Issue Date: August 21, 2006
EXHIBIT A
TO STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
TO: PLANGRAPHICS, INC.
1. The undersigned hereby elects to purchase ____________ Shares of Common
Stock of PlanGraphics, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such Shares in full, together
with all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said Shares of
Common Stock in the name of the undersigned or in such other names as is
specified below:
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3. [For use only in the absence of an effective registration statement
covering the Shares] The undersigned represents that the aforesaid Shares of
Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such Shares. In support thereof, the undersigned has
executed an Investment Representation Statement attached hereto as Exhibit B.
Date:
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(Signature)
EXHIBIT B
TO STOCK PURCHASE WARRANT
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
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COMPANY: PLANGRAPHICS, INC.
SECURITY: COMMON STOCK PURCHASE WARRANT AND UNDERLYING COMMON STOCK
AMOUNT:
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DATE:
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In connection with the purchase of the above-listed securities (the
"Securities"), the undersigned (the "Purchaser") represents to the Company the
following:
(a) The Purchaser is aware of the Company's business affairs and financial
condition, and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. The Purchaser is
purchasing these Securities for the Purchaser's own account for investment
purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as amended
(the "Securities Act").
(b) The Purchaser understands that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of the
Purchaser's investment intent as expressed herein. In this connection, the
Purchaser understands that, in the view of the Securities and Exchange
Commission ("SEC"), the statutory basis for such exemption may be unavailable if
the Purchaser's representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future.
(c) The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, the Purchaser
understands that the Company is under no obligation to register the Securities
except as set forth in the Warrant. In addition, the Purchaser understands that
the certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel for the Company.
(d) The Purchaser is aware of the provisions of Rule 144, promulgated under
the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non- public offering subject
to the satisfaction of certain conditions.
(e) The Purchaser further understands that at the time the Purchaser wishes
to sell the Securities there may be no public market upon which to make such a
sale.
(f) The Purchaser further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
Signature of Purchaser:
Date:
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