Exhibit 4.2
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of ________, 1997, by and among EPI
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, a New York corporation, as Warrant Agent (the
"Warrant Agent"), and DUKE & CO., INC., a Florida corporation (the
"Underwriter").
W I T N E S S E T H:
WHEREAS, pursuant to an underwriting agreement (the "Underwriting
Agreement") dated ________, 1997 between the Company and the Underwriter, in
connection with (i) a public offering pursuant to a Registration Statement on
Form S-1 (Registration No. 333-37071) (the "Registration Statement") filed
pursuant to the Securities Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange Commission on ________, 1997 of
1,250,000 shares of its Common Stock, par value $0.01 per share (the "Common
Stock"), and 1,250,000 Redeemable Common Stock Purchase Warrants (the
"Warrants") (and up to 187,500 additional shares of Common Stock and up to
187,500 additional Warrants covered by an over-allotment option granted by
the Company to the Underwriter), and (ii) the issuance to the Underwriter or
its designees of warrants to purchase up to an aggregate of 125,000 shares of
Common Stock and/or 125,000 Warrants (the "Underwriter's Warrants"), the
Company will issue up to an aggregate of 1,562,500 Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants,
the issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof;
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the holders
of certificates representing the Warrants and the Warrant Agent, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the authorized common stock of the Company
of any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings
and assets of the Company without limit as to amount or percentage, which at
the date hereof consists of Common Stock of the Company, $.01 par value.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business shall
be administered, which office is located on the date hereof at 0 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) "Exercise Date" shall mean, as to any Warrant, the date on which the
Warrant Agent shall have received both (i) the warrant certificate
representing such Warrant (a "Warrant Certificate"), with the exercise form
thereon duly executed by the Registered Holder thereof or his attorney duly
authorized in writing, and (ii) payment in cash, or by official bank or
certified check made payable to the Company, of an amount in lawful money of
the United States of America equal to the applicable Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean, as to each Warrant,
_______, 1999 [24 months from Effective Date].
(e) "Purchase Price" shall mean the price to be paid upon exercise of
each Warrant in accordance with the terms hereof, which price shall be $5.50
per share of Common Stock, subject to adjustment from time to time pursuant
to the provisions of Section 9 hereof, and subject to the Company's right to
reduce the Purchase Price upon notice to all Warrant Holders.
(f) "Redemption Price" shall mean the price at which the Company may, at
its option, redeem the Warrants in accordance with the terms hereof, which
price shall be $.10 per Warrant, subject to adjustment from time to time
consistent with the provisions of Section 9 hereof.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained
by the Warrant Agent pursuant to Section 6.
(h) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company, as the Company's transfer agent, or its authorized successor, as
such.
(i) "Warrant Expiration Date" shall mean, with respect to each Warrant,
5:00 p.m. (Eastern time) on _________, 2002 [5 years after Effective Date],
or on the business day immediately preceding the date fixed for redemption
(as set forth in Section 8), whichever is earlier; provided that if such date
shall in the State of New York be a holiday or a day on which banks are
authorized to close, then 5:00 p.m. (Eastern time) on the next following day
which in the State of New York is not a holiday nor a day on which banks are
authorized to close. Upon notice to all
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Warrant Holders, the Company shall have the right to extend the Warrant
Expiration Date.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one (1) share of
Common Stock upon the exercise thereof, in accordance with the terms hereof,
subject to modification and adjustment as provided in Section 9.
(b) Upon execution of this Agreement, Warrant Certificates representing
the number of Warrants sold pursuant to the Underwriting Agreement shall be
executed by the Company and delivered to the Warrant Agent. Upon written
order of the Company signed by its President or Chairman or a Vice President
and by its Secretary or an Assistant Secretary, the Warrant Certificates
shall be countersigned, issued and delivered by the Warrant Agent.
(c) From time to time up to the Warrant Expiration Date, the Transfer
Agent shall countersign and deliver stock certificates in required whole
number denominations representing up to an aggregate of 1,562,500 shares of
Common Stock, subject to adjustment as described herein, upon the exercise of
Warrants in accordance with this Agreement.
(d) From time to time up to the Warrant Expiration Date, the Warrant
Agent shall countersign and deliver Warrant Certificates in required whole
number denominations to the persons entitled thereto in connection with any
transfer or exchange permitted under this Agreement; provided that no Warrant
Certificates shall be issued except (i) those initially issued hereunder,
(ii) those issued on or after the Initial Warrant Exercise Date upon the
exercise of fewer than all Warrants represented by any Warrant Certificate to
evidence any unexercised Warrants held by the exercising Registered Holder,
(iii) those issued upon any transfer or exchange pursuant to Section 6; (iv)
those issued in replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7; (v) those issued pursuant to the
Underwriter's Warrants; and (vi) those issued at the option of the Company,
in such form as may be approved by its Board of Directors, to reflect any
adjustment or change in the Purchase Price, the number of shares of Common
Stock purchasable upon exercise of the Warrants or the Redemption Price
therefor made pursuant to Section 9.
(e) Pursuant to the terms of the Underwriter's Warrants, the Underwriter
and its designees may purchase up to an aggregate of 125,000 Warrants.
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SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement or as may
be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon
initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or
destroyed Warrant Certificates) and issued in registered form. Warrants
shall be numbered serially with the letter W on each Warrant Certificate.
(b) Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President and by its
Secretary or an Assistant Secretary, by mutual signatures or by facsimile
signatures printed thereon. In case any officer of the Company who shall have
signed any of the Warrant Certificates shall cease to be such officer of the
Company before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may nevertheless be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company. After countersignature by the Warrant Agent, Warrant Certificates
shall be delivered by the Warrant Agent to the Registered Holder without
further action by the Company, except as otherwise provided by Section 4(a).
SECTION 4. EXERCISE.
(a) Each Warrant may be exercised by the Registered Holder thereof at
any time on or after the Initial Warrant Exercise Date, but not after the
Warrant Expiration Date, upon the terms and subject to the conditions set
forth herein and in the applicable Warrant Certificate. A Warrant shall be
deemed to have been exercised immediately prior to the close of business on
the Exercise Date and the person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes as the
holder upon exercise thereof as of the close of business on the Exercise
Date. As soon as practicable on or after the Exercise Date, the Warrant
Agent shall forward to the Company the cash or check received from the exercise
of a Warrant and shall notify the Company in writing of the exercise of the
Warrants. Promptly following, and in any event within five (5)
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days after receiving authorization from the Company, the Warrant Agent, on
behalf of the Company, shall cause to be issued and delivered by the Transfer
Agent to the person or persons entitled to receive the same a certificate or
certificates for the securities deliverable upon such exercise (plus a
Warrant Certificate for any remaining unexercised Warrants of the Registered
Holder). Notwithstanding anything in the foregoing to the contrary, no
Warrant will be exercisable unless at the time of exercise the Company has
filed with the Securities and Exchange Commission a registration statement
under the Act covering the shares of Common Stock issuable upon exercise of
such Warrant and such shares have been so registered or qualified or deemed
to be exempt under the securities laws of the state of residence of the
Registered Holder of such Warrant. The Company shall use its reasonable efforts
to have all shares so registered or qualified on or before the date on which the
Warrants become exercisable.
(b) If, on the Exercise Date in respect of the exercise of any Warrant
at any time on or after the Initial Warrant Exercise Date, (i) the market
price of the Common Stock is equal to or greater than the then Purchase Price
of the Warrant, (ii) the exercise of the Warrant is solicited by the
Underwriter at such time as the Underwriter is a member of the National
Association of Securities Dealers, Inc. ("NASD"), (iii) the Warrant is not
held in a discretionary account, (iv) disclosure of the compensation
arrangement is made in documents provided to the holders of the Warrants and
(v) the solicitation of the exercise of the Warrant is not in violation of
Regulation M (as such regulation or any successor regulation or rule may be
in effect as of such time of exercise) promulgated under the Securities
Exchange Act of 1934, as amended, then the Underwriter shall be entitled to
receive from the Company, upon exercise of the each of Warrant(s), a fee of
five percent (5%) of the aggregate Purchase Price of the Warrants so
exercised (the "Exercise Fee"). Within five (5) days of the last day of each
month commencing with the Initial Warrant Exercise Date and ending on the
Warrant Expiration Date, the Warrant Agent will notify the Underwriter of
each Warrant Certificate which has been properly completed for exercise by
holders of Warrants during the last month. The Company and Warrant Agent
shall determine, in their sole and absolute discretion, whether a Warrant
Certificate has been properly completed. The Warrant Agent will provide the
Underwriter with such information, in connection with the exercise of each
Warrant, as the Underwriter shall reasonably request. The Company hereby
authorizes and instructs the Warrant Agent to deliver to the Underwriter the
Exercise Fee promptly after receipt by the Warrant Agent from the Company of
a check payable to the order of the
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Underwriter in the amount of the Exercise Fee. In the event that an Exercise
Fee is paid to the Underwriter with respect to a Warrant which the Company or
the Warrant Agent determines is not properly completed for exercise or in
respect of which the Underwriter is not entitled to an Exercise Fee, the
Underwriter will promptly return such Exercise Fee to the Warrant Agent which
shall forthwith return such fee to the Company. The Underwriter and the
Company may at any time, after ________, 1999 [second anniversary of date
hereof] and during business hours, examine the records of the Warrant Agent,
including its ledger of original Warrant certificates returned to the Warrant
Agent upon exercise of Warrants. Notwithstanding any provision to the
contrary, the provisions of this paragraph may not be modified, amended or
deleted without the prior written consent of the Underwriter.
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
(a) The Company has reserved, and covenants that it will at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon exercise of Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which shall
be issuable upon exercise of the Warrants shall, at the time of delivery, be
duly and validly issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof (other than those
which the Company shall promptly pay or discharge) and that upon issuance
such shares shall be listed on each national securities exchange, if any, on
which the other shares of outstanding Common Stock of the Company are then
listed or, if applicable, The Nasdaq Stock Market.
(b) The Company hereby agrees that, so long as any unexpired Warrants
remain outstanding, the Company will file such post-effective amendments to
the Registration Statement as may be necessary to permit it to deliver to
each person exercising a Warrant a prospectus meeting the requirements of
Section 10(a)(3) of the Act and otherwise complying therewith, and will
deliver such a prospectus to each such person.
(c) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance
of Warrants or the issuance or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common Stock are to be
delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same had paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if
any.
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(d) The Warrant Agent is hereby irrevocably authorized to requisition
the Company's Transfer Agent from time to time for certificates representing
shares of Common Stock issuable upon exercise of the Warrants, and the
Company will authorize the Transfer Agent to comply with all such proper
requisitions. The Company will file with the Warrant Agent a statement
setting forth the name and address of the Transfer Agent of the Company for
shares of Common Stock issuable upon exercise of the Warrants, unless the
Warrant Agent and the Transfer Agent are the same entity.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants of the same class or may
be transferred in whole or in part. Warrant Certificates to be exchanged
shall be surrendered to the Warrant Agent at its Corporate Office, and upon
satisfaction of all the terms and provisions hereof, the Company shall
execute and the Warrant Agent shall countersign, issue and deliver in
exchange therefor the Warrant Certificate or Certificates which the
Registered Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in which, subject
to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof in accordance with its regular
practice. Upon due presentment for registration of transfer of any Warrant
Certificate at such office, the Company shall execute and the Warrant Agent
shall issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing the aggregate number of Warrants so
transferred.
(c) With respect to all Warrant Certificates presented for registration
or transfer, or for exchange or exercise, the "Election to Purchase" or
"Assignment" form, as appropriate, on the reverse thereof shall be duly
endorsed, or be accompanied by a written instrument or instruments of
transfer and subscription, in form satisfactory to the Company and the
Warrant Agent, duly executed by the Registered Holder or his attorney-in-fact
authorized in writing.
(d) A service charge may be imposed by the Warrant Agent for any
exchange or registration of transfer of Warrant Certificates requested by a
Registered Holder. In addition, the Company may require payment by such
Registered Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange in
case of mutilated Warrant Certificates shall be promptly canceled by the
Warrant Agent and thereafter retained by
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the Warrant Agent until termination of this Agreement or resignation as
Warrant Agent, or, with the prior written consent of the Underwriter,
disposed of or destroyed, at the direction of the Company.
(f) Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice
to the contrary. The Warrants, which are being publicly offered with shares
of Common Stock pursuant to the Underwriting Agreement, may be purchased
separately from the shares and will be immediately transferable separately
from the Common Stock.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the
case of mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall (in the absence of notice to the
Company and/or Warrant Agent that the Warrant Certificate has been acquired
by a bona fide purchaser) countersign and deliver to the Registered Holder in
lieu thereof a new Warrant Certificate of like tenor representing an equal
aggregate number of Warrants. Applicants for a substitute Warrant
Certificate shall comply with such other reasonable regulations and pay such
other reasonable charges as the Warrant Agent may prescribe pursuant to
Section 6(d) or otherwise.
SECTION 8. REDEMPTION.
(a) Commencing on the Initial Warrant Exercise Date, on prior written
notice as required pursuant to the provisions of paragraph (b) of this
Section 8 below, the Warrants may, with the prior written consent of the
Underwriter, be redeemed by the Company at the Redemption Price, provided the
closing bid quotation of the Common Stock on The Nasdaq Stock Market or the
last sales price if quoted on a national securities exchange equals or
exceeds $8.25 per share, subject to adjustment consistent with the provisions
of Section 9 hereof, for 20 consecutive trading days ending on the third
trading day prior to the date on which the Company gives notice of
redemption. All Warrants must be redeemed if any of the Warrants are
redeemed.
(b) In case the Company shall desire to exercise its right to so redeem
the Warrants, it shall request the Warrant Agent, or the Underwriter, to mail
a notice of redemption to each of the Registered Holders of the Warrants to
be redeemed, first
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class, postage prepaid, not earlier than the forty-fifth (45th) day before
the date fixed for redemption and not later than the thirtieth (30th) day
before the date fixed for redemption, at such Registered Holder's last
address as it shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have
been duly given whether or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the Redemption Price,
(ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the Redemption Price paid, (iv) that the
Underwriter will assist each Registered Holder of a Warrant in connection
with the exercise thereof (if the Underwriter has conducted, or caused to be
conducted, the mailing) and (v) that the right to exercise the Warrant shall
terminate at 5:00 p.m. (Eastern time) on the business day immediately
preceding the date fixed for redemption. No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a holder (a) to whom notice was
not mailed or (b) whose notice was defective. An affidavit of the Warrant
Agent or of the Secretary or an Assistant Secretary of the Underwriter or the
Company that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant that has been called for redemption
shall terminate at 5:00 p.m. (Eastern time) on the business day immediately
preceding the date fixed for redemption. After such termination, Holders of
the redeemed Warrants shall have no further rights except to receive, upon
surrender of the redeemed Warrant, the Redemption Price.
(e) From and after the date fixed for redemption, the Company shall, at
the place specified in the notice of redemption, upon presentation and
surrender to the Company by or on behalf of the Registered Holder thereof of
one or more Warrants to be redeemed, deliver or cause to be delivered to or
upon the written order of such Holder a sum in cash equal to the Redemption
Price of each such Warrant. From and after the date fixed for redemption and
upon the deposit or setting aside by the Company of a sum sufficient to
redeem all the Warrants called for redemption, such Warrants shall expire and
become void and all rights hereunder and under the Warrant Certificates,
except the right to receive payment of the Redemption Price, shall cease.
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES OF
COMMON STOCK OR WARRANTS.
(a) (i) In the event the Company shall, at any time or from time to
time after the date hereof, issue any shares of Common Stock as a stock
dividend to the holders of Common Stock, or
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subdivide or combine the outstanding shares of Common Stock into a greater or
lesser number of shares (any such sale, issuance, subdivision or combination
being herein called a "Change of Shares"), then, and thereafter upon each
further Change of Shares, the applicable Purchase Price in effect immediately
prior to such Change of Shares shall be changed to a price (calculated to the
nearest cent) determined by multiplying the Purchase Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such
Change of Shares and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such Change of Shares.
(ii) Subject to the exceptions referred to in Section 9(h), in the
event that the Company shall at any time or from time to time issue or sell
any shares of its Common Stock for a consideration per share of Common Stock
less than the then applicable Purchase Price, the Purchase Price shall
thereupon be reduced to a price (calculated to the nearest cent) determined
by dividing (x) an amount equal to the sum of (i) the number of shares of
Common Stock of the Company outstanding immediately prior to such issue or
sale multiplied by the then applicable Purchase Price plus (ii) the
consideration, if any, received by the Company upon such issuance or sale by
(y) the total number of shares of Common Stock of the Company outstanding
immediately after such issuance or sale.
(iii) If the Company shall at any time after the date hereof issue
or sell any shares of any other securities convertible into Common Stock or
any options or warrants to purchase Common Stock (except as provided in
Section 9(h)), including in connection with retirement of outstanding debt,
for a consideration per share less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then, forthwith upon
such issue or sale, the Purchase Price shall be reduced to the price
(calculated to the nearest cent) determined by dividing (x)an amount equal to
the sum of (i) the number of shares of Common Stock outstanding immediately
prior to such issue or sale multiplied by the Purchase Price at the time plus
(ii) the consideration, if any, received by the Company upon such issue or
sale by (y) the total number of shares of Common Stock outstanding
immediately after such issue or sale.
(iv) For purposes of this Section 9(a) the consideration in
connection with any such issue or sale shall be the amount of cash received
by the Company (or, in the case of securities sold to underwriters or dealers
for public offering or to the public through underwriters, the public
offering price) for the sale of such shares or other securities, options or
warrants, before deducting therefrom any commissions or other expenses paid
or incurred by the Company in connection with the issue or sale of such
securities, options or warrants plus any additional cash
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receivable by the Company on conversion or exercise of such other securities,
options or warrants except that, if any portion of such consideration is a
consideration other than cash, the amount of such consideration other than
cash shall be (i) the principal amount thereof, plus any accrued but unpaid
interest thereon and all other amounts payable in connection with such debt
including for expenses and yield maintenance premiums, in the case of debt
forgiven, exchanged or converted, and (ii) the value of such consideration as
determined in good faith by the Board of Directors of the Company (whose
determination shall be conclusive and shall be evidenced by a resolution of
the Company's Board of Directors filed with the Warrant Agent), in the case
of any other non-cash consideration.
(v) If the conversion or exercise price of any securities
convertible into Common Stock or options or warrants to purchase Common Stock
is not specified at the time of the issue or sale of such securities, option
or warrants, the amount thereof, for purposes only of this Section 9(a),
shall be as determined in accordance with Section 9(i).
(vi) In the event of the issuance or sale by the Company of any
securities convertible into Common Stock or any options or warrants to
purchase Common Stock (except as provided in Section 9(h)), the Company shall
be deemed to have issued the maximum number of shares of Common Stock into
which such convertible securities may be converted or the maximum number of
shares of Common Stock deliverable upon the exercise of such options or
warrants, as the case may be, for the minimum consideration payable in
respect thereof. On the expiration of such options or warrants or the
termination of the right to convert such convertible securities, the Purchase
Price shall be readjusted based upon the number of shares of Common Stock
actually delivered upon the exercise of such options or warrants or upon the
conversion of such convertible securities. Except as provided in the next
preceding sentence no further adjustment of the Purchase Price shall be made
as a result of the actual issuance of shares of Common Stock upon the
exercise of such options or warrants or the conversion of such convertible
securities.
(b) Upon each adjustment of the applicable Purchase Price pursuant to
Section 9(a), the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in
Section 9(c)) be such number of shares (calculated to the nearest tenth)
purchasable at the applicable Purchase Price immediately prior to such
adjustment multiplied by a fraction, the numerator of which shall be the
applicable Purchase Price in effect immediately prior to such adjustment and
denominator of which shall be the applicable Purchase Price in effect
immediately after such adjustment.
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(c) The Company may elect, upon any adjustment of the applicable
Purchase Price, to adjust the number of Warrants outstanding, in lieu of
adjusting the number of shares of Common Stock purchasable upon the exercise
of each Warrant as hereinabove provided, so that each Warrant outstanding
after such adjustment shall represent the right to purchase one share of
Common Stock. Each Warrant held of record prior to such adjustment of the
number of Warrants shall become that number of Warrants (calculated to the
nearest tenth) determined by multiplying the number one by a fraction, the
numerator of which shall be the applicable Purchase Price in effect
immediately prior to such adjustment and the denominator of which shall be
the applicable Purchase Price in effect immediately after such adjustment.
Upon each such adjustment of the number of Warrants, the Redemption Price in
effect immediately prior to such adjustment also shall be adjusted by
multiplying such Redemption Price by a fraction, the numerator of which shall
be the Purchase Price in effect immediately after such adjustment and the
denominator of which shall be the Purchase Price in effect immediately prior
to such adjustment. Upon each adjustment of the number of Warrants pursuant
to this Section 9, the Company shall, as promptly as practicable, cause to be
distributed to each Registered Holder of Warrant Certificates on the date of
such adjustment Warrant Certificates evidencing, subject to Section 10, the
number of additional Warrants, if any, to which such Holder shall be entitled
as a result of such adjustment or, at the option of the Company, cause to be
distributed to such Holder in substitution and replacement for the Warrant
Certificates held by such Holder prior to the date of adjustment (and upon
surrender thereof, if required by the Company) new Warrant Certificates
evidencing the number of Warrants to which such Holder shall be entitled
after such adjustment.
(d) In the case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding
shares of Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as, or substantially as, an
entirety (other than a sale/leaseback, mortgage or other financing
transaction), the Company shall cause effective provision to be made so that
each holder of a Warrant then outstanding shall have the right thereafter, by
exercising such Warrant, to purchase the kind and number of shares of stock
or other securities or property (including cash) receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock that might have been purchased upon exercise of such Warrant,
immediately prior to such consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Section 9. The
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foregoing provisions shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(e) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant
Certificates, continue to express the applicable Purchase Price per share,
the number of shares purchasable thereunder and the Redemption Price therefor
as were expressed in the Warrant Certificates when the same were originally
issued.
(f) After each adjustment of the Purchase Price pursuant to this Section
9, the Company will promptly after the fiscal quarter in which such
adjustment was triggered prepare a certificate signed by the Chairman or
President, and by the Secretary or an Assistant Secretary, of the Company
setting forth: (i) the applicable Purchase Price as so adjusted, (ii) the
number of shares of Common Stock purchasable upon exercise of each Warrant
after such adjustment, and, if the Company shall have elected to adjust the
number of Warrants, the number of Warrants to which the Registered Holder of
each Warrant shall then be entitled, and the adjustment in Redemption Price
resulting therefrom, and (iii) a brief statement of the facts accounting for
such adjustment. The Company will promptly file such certificate with the
Warrant Agent and cause a brief summary thereof to be sent by ordinary first
class mail to the Underwriter and to each Registered Holder of Warrants at
his or her last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity thereof except as to the holder
to whom the Company failed to mail such notice, or except as to the holder
whose notice was defective. The affidavit of an officer of the Warrant Agent
or the Secretary or an Assistant Secretary of the Company that such notice
has been mailed shall, in the absence of fraud, be prima facie evidence of
the facts stated therein.
(g) For purposes of Section 9(a), 9(b) and 9(c) hereof, the following
provisions (i) and (ii) shall also be applicable.
(i) The number of shares of Common Stock outstanding at any given
time shall include shares of Common Stock owned or held by or for the account
of the Company and the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be considered a Change of
Shares for purposes of said sections.
(ii) No adjustment of the Purchase Price shall be made unless such
adjustment would require an increase or decrease of at least $0.05 in such
price; provided that any adjustments which by reason of this clause (ii) are
not required to be made
13
shall be carried forward and shall be made at the time of and together with
the next subsequent adjustment which, together with any adjustment(s) so
carried forward, shall require an increase or decrease of at least $0.05 in
the Purchase Price then in effect hereunder.
(h) No adjustment to the Purchase Price or to the number of shares of
Common Stock purchasable upon the exercise of each Warrant will be made,
however, with respect to the following:
(1) upon the issuance or exercise of any of the Warrants;
(2) upon (i) the issuance or sale of shares of Common Stock
pursuant to options, warrants or convertible or exchangeable securities
outstanding as of the date of this Agreement or (ii) issuance of shares of
Common Stock pursuant to the Company's 1997 Non-Qualified and Incentive Stock
Option Plan and 1997 Non-Employee Directors' Stock Option Plan as each of
such plans exists on the date hereof; or
(3) upon the issuance of any shares of Common Stock in connection
with a consolidation or merger in which the Company or a wholly owned
subsidiary of the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of the
outstanding Common Stock, or (ii) pursuant to and in connection with the
acquisition by the Company or any wholly owned subsidiary of the Company of
all or substantially all of the assets or stock (or other equity interests,
as the case may be) of another entity.
(i) Any determination as to whether an adjustment in the Purchase Price
in effect hereunder is required pursuant to Section 9, or as to the amount of
any such adjustment, if required, shall be binding upon the holders of the
Warrants and the Company if made in good faith by the Board of Directors of
the Company.
(j) If and whenever the Company shall grant to all of the holders of
Common Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Common Stock or securities convertible into
or exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of
determination of stockholders entitled to the rights, warrants or options
being granted by the Company, such holder were the holder of record of the
number of whole shares of Common Stock then issuable upon exercise (assuming,
for purposes of this Section 9(j), that the exercise of Warrants is
permissible during periods prior to the Initial Warrant Exercise Date) of his
Warrants. Such grant by the Company to the holders of the Warrants shall be in
14
lieu of any adjustment which otherwise might be called for pursuant to this
Section 9.
(k) In case the Company shall, at any time prior to the exercise of a
Warrant, make any distribution of its assets to holders of the Common Stock,
then the Registered Holder of such Warrant who exercises his Warrant after
the record date for determination of those Registered Holders of Common Stock
entitled to such distribution of assets shall be entitled to receive, upon
exercise of the Warrant, in addition to Common Stock, the amount of such
distribution which would have been payable to such Registered Holder had he
been the holder of record of the Common Stock receivable upon exercise of
such Warrant on the record date for the determination of those entitled to
such distribution.
SECTION 10. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) If the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 9 hereof, the
Company shall nevertheless not be required to issue fractions of shares, upon
exercise of the Warrants or otherwise, or to distribute certificates that
evidence fractional shares. With respect to any fraction of a share called
for upon any exercise hereof, the Company shall pay to the Holder an amount
in cash equal to such fraction multiplied by the current market value of such
fractional share, determined as follows:
(i) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on The Nasdaq Stock Market, the current value shall be the last
reported sale price of the Common Stock on The Nasdaq Stock Market or such
exchange on the last business day prior to the date of exercise of the
Warrant, or if no such sale is made on such day, the average of the closing
bid and asked prices for such day on such exchange; or
(ii) If the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported
bid and asked prices reported by the National Quotation Bureau, Inc. on the
last business day prior to the date of the exercise of the Warrant; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current value shall be an amount determined in such reasonable manner as may
be prescribed by the Board of Directors of the Company.
SECTION 11. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon
exercise of such Warrants for any
15
purpose whatsoever, nor shall anything contained herein be construed to
confer upon the holder of Warrants, as such, 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 or reclassification of stock, change of par value
or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.
SECTION 12. RIGHTS OF ACTION. All rights of action with respect to
this Agreement are vested in the respective Registered Holders of the
Warrants, and any Registered Holder of a Warrant, without consent of the
Warrant Agent or of the holder of any other Warrant, may, in his own behalf
and for his own benefit, enforce against the Company his right to exercise
his Warrants for the purchase of shares of Common Stock in the manner
provided in the Warrant Certificates and this Agreement.
SECTION 13. AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant,
by his acceptance thereof, consents and agrees with the Company, the Warrant
Agent and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in person or by his attorney
duly authorized in writing and only if the Warrant Certificates representing
such Warrants are surrendered at the office of the Warrant Agent, duly
endorsed or accompanied by a proper instrument of transfer satisfactory to
the Warrant Agent and the Company in their sole discretion, together with
payment of any applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the holder and as the
absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice or knowledge to the contrary, except as otherwise expressly
provided in Section 7 hereof.
SECTION 14. CANCELLATION OF WARRANT CERTIFICATES. If the Company
shall purchase or acquire any Warrant or Warrants, the Warrant Certificate or
Warrant Certificates evidencing the same shall thereupon be delivered to the
Warrant Agent and canceled by it and retired.
SECTION 15. CONCERNING THE WARRANT AGENT. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the
16
Company, and its duties shall be determined solely by the provisions of this
Agreement. The Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or
other property delivered upon exercise of any Warrant or whether any stock
issued upon exercise of any Warrant is fully paid and nonassessable.
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Purchase Price or the Redemption Price provided in
this Agreement, or to determine whether any fact exists which may require any
such adjustments, or with respect to the nature or extent of any such
adjustment, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not (i) be liable for any recital or statement
of facts contained herein or for any action taken, suffered or omitted by it
in reliance on any Warrant Certificate or other document or instrument
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure
on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or
(iii) be liable for any act or omission in connection with this Agreement
except for its own negligence or willful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company or for the Underwriter) and shall incur
no liability or responsibility for any action taken, suffered or omitted by
it in good faith in accordance with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed by the
Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any
action taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction, order or demand believed by it to
be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse it for its reasonable expenses
hereunder; it further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of its duties and powers hereunder except
losses, expenses and liabilities arising as a result of the Warrant Agent's
negligence or willful misconduct.
17
In the event of a dispute under this Agreement between the Company and
the Underwriter regarding proceeds received by the Warrant Agent from the
exercise of the Warrants, the Warrant Agent shall have the right, but not the
obligation, to bring an interpleader action to resolve such dispute.
The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), after
giving 30 days' prior written notice to the Company. At least 15 days prior
to the date such resignation is to become effective, the Warrant Agent shall
cause a copy of such notice of resignation to be mailed to the Registered
Holder of each Warrant Certificate at the Company's expense. Upon such
resignation, or any inability of the Warrant Agent to act as such hereunder,
the Company shall appoint a new warrant agent in writing. If the Company
shall fail to make such appointment within a period of 15 days after it has
been notified in writing of such resignation by the resigning Warrant Agent,
then the Registered Holder of any Warrant Certificate may apply to any court
of competent jurisdiction for the appointment of a new warrant agent. Any
new warrant agent, whether appointed by the Company or by such a court shall
be a bank or trust company having a capital and surplus as shown by its last
published report to its stockholders, of not less than Ten Million Dollars
($10,000,000.00), or a stock transfer company. After acceptance in writing of
such appointment by the new warrant agent is received by the Company, such
new warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant
Agent, without any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new warrant agent may
be converted or merged or any corporation resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party or any
corporation succeeding to the trust business of the Warrant Agent shall be a
successor warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as successor to
the Warrant Agent under the provisions of the preceding paragraph. Any such
successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed to the Company and to the Registered Holder of
each Warrant Certificate.
18
The Warrant Agent, its subsidiaries and affiliates, and any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effects as though it were not
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting
in any other capacity for the Company or for any other legal entity.
SECTION 16. MODIFICATION OF AGREEMENT. Subject to the provisions of
Section 4(b), the Warrant Agent and the Company may by supplemental agreement
make any changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained or (ii) that they may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Warrant Certificates; provided, however, that
this Agreement shall not otherwise be modified, supplemented or altered in
any respect except with the consent in writing of the Registered Holders of
Warrant Certificates representing not less than a majority of the outstanding
Warrants, and provided, further, that no change in the number of or nature of
the securities purchasable upon the exercise of any Warrant, or the Purchase
Price therefor, or the acceleration of the Warrant Expiration Date, shall be
made without the consent in writing of the Registered Holder of the Warrant
Certificate representing such Warrant, other than such changes as are
specifically prescribed by this Agreement as originally executed.
SECTION 17. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made three days after such is mailed first class registered or certified
mail, postage prepaid as follows: if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxx 00000 Attention: President, or at such other address as may
have been furnished to the Warrant Agent in writing by the Company, with a
copy to Benesch, Friedlander, Xxxxxx & Aronoff LLP, 0000 XX Xxxxxxx Xxxxxxxx,
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention Xxx X. Xxxxxx, Esq.; if
to the Warrant Agent, at Continental Stock Transfer & Trust Company, 0
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if to Duke & Co., Inc., at 000 Xxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President, with a
copy sent to Zimet, Haines, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx Xxxxxx Xxxxxx, Esq.
SECTION 18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
SECTION 19. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant
19
Agent and the Underwriter, and their respective successors and assigns, and
the holders from time to time of the Warrant Certificates. Nothing in this
Agreement is intended or shall be construed to confer upon any other person
any right, remedy or claim, in equity or at law, or to impose upon any other
person any duty, liability or obligation.
SECTION 20. TERMINATION. This Agreement shall terminate at the close
of business on the Warrant Expiration Date of all the Warrants or such
earlier date upon which all Warrants have been exercised and/or redeemed,
except that the Warrant Agent shall account to the Company for cash held by
it and the provisions of Section 15 hereof shall survive such termination.
SECTION 21. COUNTERPARTS. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this warrant Agreement
to be duly executed as of the date first above written.
EPI TECHNOLOGIES, INC.
By:
-------------------------------------
Name:
Title:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By:
-------------------------------------
Name:
Title: Authorized Officer
DUKE & CO., INC.
By:
-------------------------------------
Name:
Title:
20
EXHIBIT A
(FORM OF FACE OF WARRANT CERTIFICATE)
No. Warrants
VOID AFTER _______, 2002
WARRANT CERTIFICATE FOR PURCHASE OF COMMON STOCK
EPI TECHNOLOGIES, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED, __________ or registered assigns
(the "Registered Holder") is the owner of the number of Redeemable Common Stock
Purchase Warrants ("Warrants") specified above. Each Warrant initially entitles
the Registered Holder to purchase, subject to the terms and conditions set forth
in this Certificate and the Warrant Agreement (as hereinafter defined), one (1)
fully paid and nonassessable share of common stock, $0.01 par value (the "Common
Stock"), of EPI TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at
any time from _________, 1999 to the Expiration Date (as hereinafter defined),
upon the presentation and surrender of this Warrant Certificate with the
Election to Purchase Form on the reverse hereof duly executed, at the corporate
office of CONTINENTAL STOCK TRANSFER & TRUST COMPANY as warrant agent, or its
successor (the "Warrant Agent"), accompanied by payment of $5.50, subject to
adjustment (the "Purchase Price") in lawful money of the United States of
America in cash or by official bank or certified check made payable to the
Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement") dated as of _________,
1997, by and among the Company, the Warrant Agent and Duke & Co., Inc. (the
"Underwriter"). Reference is hereby made to said Warrant Agreement for a more
complete statement of the rights and limitations of rights of the Registered
Holder hereof, the rights and duties of the Warrant Agent and the rights and
obligations of the Company thereunder. In the event of a conflict between the
terms of this Warrant Certificate and the Warrant Agreement, the terms of the
Warrant Agreement shall prevail. Copies of said Warrant Agreement are on file
at the office of the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modifications or adjustments.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common
Stock will be issued. In case of the exercise of less than all the Warrants
represented hereby, the Company shall cancel this Warrant Certificate upon the
surrender hereof and shall execute and deliver a new Warrant Certificate or
Warrant Certificates of like tenor, which the Warrant Agent shall countersign,
for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (Eastern time) on ________,
2002, or on the business day immediately preceding the date fixed for
redemption, whichever is earlier. If such date shall in the State of New York
be a holiday or a day on which the banks are authorized to close, then the
Expiration Date shall mean 5:00 p.m. (Eastern time) on the next following day
which in the State of New York is not a holiday or a day on which banks are
authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is
effective. This Warrant shall not be exercisable by a Registered Holder in any
state in which it would be unlawful for the Company to deliver the shares of
Common Stock upon exercise of the Warrants represented hereby.
The Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment of this Warrant Certificate at
such office for registration of transfer, together with any transfer fee and any
tax or other governmental charge imposed in connection with such transfer, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as may be provided in the Warrant Agreement.
Commencing ________, 1999, this Warrant may, with the prior written consent
of the Underwriter, be redeemed at the option of the Company, at the Redemption
Price (as defined in the Warrant Agreement), provided the closing bid quotation
of the Common Stock on The Nasdaq Stock Market or the last sales price if
quoted on a
national securities exchange equals or exceeds $8.25 per share (subject to
adjustment as set forth in the Warrant Agreement) for 20 consecutive trading
days ending on the third trading day prior to the date on which the Company
gives notice of redemption. Notice of redemption shall be given not later than
the thirtieth day, and not earlier than the forty fifth day, before the date
fixed for redemption, all as provided in the Warrant Agreement. On and after
the date fixed for redemption, the Registered Holder shall have no rights with
respect to this Warrant except to receive the Redemption Price per Warrant upon
surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
The Company has agreed to pay a fee of 5% of the Purchase Price to the
Underwriter upon certain conditions as specified in the Warrant Agreement upon
the exercise of this Warrant.
This Warrant Certificate and each Warrant represented hereby shall be
governed by and construed in accordance with the laws of the State of New York.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized, and a facsimile of its corporate seal to be imprinted hereon.
EPI TECHNOLOGIES, INC.
By
--------------------------------------
Its
By
--------------------------------------
Its
Date:
-------------------
Seal
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as
Warrant Agent
By
-----------------------
Its Authorized Officer
(FORM OF REVERSE OF WARRANT CERTIFICATE)
ELECTION TO PURCHASE FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
(___) Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_________________________
_________________________
_________________________
_________________________
please print or type name and address
and be delivered to
_________________________
_________________________
_________________________
_________________________
please print or type name and address
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
The undersigned represents that the exercise of the within Warrant was
solicited by a member of the National Association of Securities Dealers, Inc.
("NASD"). If not solicited by an NASD member, please write "unsolicited" in the
space below. Unless otherwise indicated by listing the name of another NASD
member firm, it will be assumed that the exercise was solicited by Duke & Co.,
Inc.
Please indicate the name of the NASD member firm which solicited the exercise
of the Warrant.
--------------------------------------
Name of soliciting NASD Member
Dated: __________________
--------------------------------------
Name
(Please Print or Typewrite)
--------------------------------------
Signature
--------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------
Xxxx, Xxxxx and Zip Code
--------------------------------------
Social Security or Other
Taxpayer ID Number
Signature Guaranteed:
--------------------------------------
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_________________________
_________________________
_________________________
_________________________
please print or type name and address
(___) of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints _______________ Attorney to transfer this
Warrant Certificate on the books of the Company, with full power of substitution
in the premises.
Dated:
------------- -------------------------------------------------------
Signature Guaranteed:
--------------------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE ELECTION TO PURCHASE FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,
AND MUST BE GUARANTEED BY A MEDALLION BANK.
