Exhibit 12
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED (I) EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) EXCEPT PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO RESTRICTIONS ON SALE AS SET FORTH HEREIN.
No. W-G-2
Void after 5:00 p.m. Eastern Standard Time, on December 9, 2004.
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, XXXXXX XXXXXXXX or
its permitted assigns under the terms hereof ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from EPL TECHNOLOGIES,
INC., a Colorado corporation ("Company"), an aggregate of Five Hundred Sixty
Thousand (500,000) shares of common stock, par value $0.001 per share, of the
Company (the "Common Stock"), at an exercise price equal to 0.5170 dollars
(United States Dollars $0.5170), per share, for each of such shares of Common
Stock issuable under this Warrant, at any time during the period of December 9,
1999 to December 9, 2004, but not later than 5:00 p.m. Eastern Standard Time, on
December 9, 2004, subject to modification and adjustment as provided herein. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of
subsection (f) hereof, this Warrant may be exercised in whole or in part at any
time or from time to time on or after December 9, 1999 and until December 9,
2004 or, if either such day is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
the Exercise Price, payable via certified or official bank check or wire
transfer payable to the Company or its order. If this Warrant should be
exercised in part only, and provided the
Warrant shall not have then expired, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant of like tenor and
date evidencing the rights of the Holder thereof to purchase the balance of the
shares purchasable thereunder. Upon receipt by the Company of this Warrant,
accompanied by payment of the Exercise Price for the number of shares for which
this Warrant is being exercised, at its office, or by the stock transfer agent
of the Company at its office, in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise immediately prior to the close of business on the date of such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder; provided, however, that if
on such date the transfer books for the Common Stock shall be closed, the
certificates for the shares or other securities in respect of which the Warrant
has been exercised shall be issuable on the date on which such books shall next
be opened, and until such date, the Company shall be under no obligation to
deliver any certificates for such shares or other securities.
The Company covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(b) Reservation of Shares. The Company hereby agrees
that at all times there shall be reserved for issuance and/or delivery upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance and delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall round up such fraction to the next whole number of
shares.
(d) Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft or destruction
of this warrant and of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time be enforceable by anyone. This Warrant shall
not be transferable upon the transfer books of the Company with respect to
record ownership of this Warrant or the Warrant Shares until and unless any such
proposed transferee executes and delivers to the Company, in writing,
representations and warranties of the Holder under this Warrant comparable to
those set forth in paragraph (I) below and delivers to the Company an opinion of
counsel, satisfactory
-2-
to the Company in its sole discretion, both as to the issuer of the opinion and
the substance of such opinion, that such transfer does not require registration
under the Securities Act and that such transfer is exempt from any such
registration under the Securities Act or any applicable state securities laws.
(e) Rights of the Holder. The Holder shall not, by
virtue of holding this Warrant prior to any exercise of this Warrant, be
entitled to any rights of a shareholder in the Company either at law or equity,
including without limitation the right to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the Warrant, for any purpose whatsoever, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein until such Holder shall have
exercised the Warrant and been issued shares of Common Stock in accordance with
the provisions hereof.
(f) Anti-Dilution Provisions. The Exercise Price and
the number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time, but only upon the occurrence
of any of the events as hereinafter provided:
(i) In the event the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, the
Exercise Price then in effect shall be proportionately decreased, effective at
the close of business on the record date for the determination of stockholders
entitled to receive the same (it being understood that any issuance of Common
Stock as a dividend on any class of the Company's preferred stock shall have no
effect on the Exercise Price);
(ii) In the event the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, by reclassification
or otherwise, the Exercise Price then in effect shall be proportionately
decreased or increased, as the case may be, effective immediately after the
effective date of such subdivision or combination; and
(iii) If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of each Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the shares of the
Common Stock of the Company purchasable and receivable upon the exercise of the
rights represented by such Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock purchasable and receivable upon the exercise of the rights represented by
such Warrant had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such reorganization, reclassification,
consolidation, merger or sale, appropriate provision shall be made with respect
to the rights and interests of the Holder to the end that the provisions of the
Warrant (including, without limitation, provisions for adjustment of the
Exercise Price and
-3-
of the number of shares issuable upon the exercise of the Warrants) shall
thereafter be applicable as nearly as may be in relation to any shares of stock,
securities, or assets thereafter deliverable upon exercise of stock, securities,
or assets thereafter deliverable upon exercise of Warrants. The Company shall
not effect any such consolidation, merger or sale, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the Holder such shares of stock, securities, or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase.
(iv) Upon each adjustment of the Exercise Price
pursuant to this Section (f), the number of shares of Common Stock specified in
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share of Common
Stock) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of such Warrant and dividing the product
so obtained by the Exercise Price in effect after such adjustment.
(v) Irrespective of any adjustments of the number
or kind of securities issuable upon exercise of Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number of shares of Common Stock and Exercise Price as are stated in similar
Warrants previously issued.
(vi) The Company may retain the independent public
auditing firm regularly retained by the Company, or another firm of independent
public auditors of nationally recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f).
(vii) Whenever there is an adjustment in the
Exercise Price or in the number or kind of securities issuable upon exercise of
the Warrants, or both, as provided in this Section (f), the Company shall (A)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of each Warrant after such adjustment; and (B) cause a notice stating
that such adjustment has been effected and the Exercise Price then in effect and
the number and kind of securities issuable upon exercise of each Warrant to be
sent to each registered holder of a Warrant.
(viii) If an event occurs which is similar in
nature to the events described in this Section (f), but is not expressly covered
hereby, the Board of Directors of the Company shall make or arrange for an
equitable adjustment to the number of shares of Common Stock issuable pursuant
hereto and the Exercise Price. The Company further agrees, as a general matter,
(I) that it will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observation of performance of
any
-4-
of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company, (ii) promptly to take all action as may from time to
time be required in order to permit the Holder to exercise this Warrant and the
Company duly and effectively to issue shares of its Common Stock or other
securities as provided herein upon the exercise hereof, and (iii) promptly to
take all action required or provided for herein to protect the rights of the
Holder granted hereunder against dilution.
(g) Notices To Warrant Holders. So long as this Warrant
shall be outstanding, (I) if the Company shall offer to the holders of the
Common Stock for subscription or purchase by them any share of any class or any
other rights or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all or the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record date is to be fixed for the purpose of such rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding upon.
(h) Demand registration At any time during the term of
the Warrant, the Holder shall have the right, exercisable by written notice to
the Company, (the Demand Registration Request), to have the Company prepare and
file with the Securities and Exchange Commission (the Commission) on one
occasion, at the sole expense of the Company, a Registration Statement on Form
S-3 and such other documents as may be necessary (in the opinion of counsel for
the Company) in order to comply with the provisions of the Act, so as to permit
a public offering of the Warrant Shares.
(i) Incidental Registration Rights If the Company
proposes to file a registration statement with the Commission for a public
offering and sale of any equity securities issued by the Company (other than a
registration statement on Form S-8 or Form S-4, or their successors, or any
other form for a similar limited purpose, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation) at any time and from time to time, it will, prior to such
filing, give written notice to the Holder of its intention to do so and, upon
written request of such Holder given within 20 days after the Company provides
such notice (which request shall state the intended method of disposition of the
Warrant Shares), the Company shall use its best efforts to cause all of the
Warrant Shares which the Company has been requested by the Holder to register
under the Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Holder; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this section without obligation
to any Holder.
-5-
In connection with any registration under this
section involving an underwriting, the Company shall not be required to include
any Warrant Shares in such registration unless the Holder accepts the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Warrant Shares to be
included in the offering, or to exclude them altogether, then the Company shall
be required to include in the registration only that number of Warrant Shares,
if any, which the managing underwriter believes should be included therein;
provided that no persons or entities other than the Company, the Holder and
persons or entities holding registration rights shall be permitted to include
securities in the offering. If the number of Warrant Shares to be included in
the offering in accordance with the foregoing is less that the total number of
shares which the Holder has requested to be included, then the Holder and other
holders of securities entitled to include them in such registration shall
participate in the registration pro rata based upon their total ownership of
shares of common stock (giving effect to the conversion into shares of common
stock of all securities convertible thereunto). If any Holder would thus be
entitled to include more securities that such Holder requested to be registered,
the excess shall be allocated among other requesting holders pro rata in the
manner described in the preceding sentence. If the Holder disapproves of the
terms of any underwriting, it may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(j) Covenants of the Company with respect to
Registration The Company covenants and agrees as follows:
(A) In connection with any registration of the
Warrant Shares under section (h) hereof, the Company shall file the Registration
Statement on Form S-3 as expeditiously as possible, but in any event no later
than thirty (30) days following the receipt of any demand thereof, shall use its
best efforts to have any such Registration Statement declared effective at the
earliest possible time and shall furnish the Holder such number of prospectuses
as shall reasonably be requested.
(B) The Company shall pay all costs, fees and
expenses in connection with all registration Statements on Form S-3 filed in
relation to the Warrant Shares, including, without limitation, the Company's
legal and accounting fees and printing expenses.
(C) The Company will take all necessary action
which may be required in qualifying or registering the Warrant Shares included
in a Registration Statement on Form S-3.
(D) Any Holder, and its successors and assigns,
shall severally and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim or damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holder, or its
-6-
successors or assigns, for specific inclusion in such Registration Statement.
(E) Nothing contained in this Agreement shall be
construed as requiring the Holder to exercise his Warrants prior to the initial
filing of any registration statement or the effectiveness thereof.
(k) Governing Law. This Warrant 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.
(l) Representations and Warranties of the Holder.
The Holder hereby represents and warrants to the
Company, intending that the Company rely on such representations and warranties
in issuing the Warrant and any Warrant Shares to the Holder, as follows:
(A) The Holder is an "accredited investor" as
defined under the rules and regulations under the Securities Act and is a
sophisticated investor who is fully familiar with the nature of the Company's
business or, that the Company has previously acknowledged in writing to the
Holder that the Holder need not be an "accredited investor."
(B) The Holder understands that the Warrants and
the Warrant Shares have not been and will not, in connection with the issuance
of the Warrant to the Holder, be registered under the Securities Act, are
subject to substantial restrictions on transfer as set forth herein and may not
be sold or transferred absent such registration unless the Holder provides the
Company with an opinion of counsel which is satisfactory to the Company (both as
to the issuer of the opinion and the form and substance thereof) that the
Warrant or the Warrant Shares proposed to be transferred may be transferred in
reliance on an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws.
(C) The Holder represents and warrants that it is
acquiring the Warrant for its own account, as principal, for investment only and
not with a view to resale or distribution and that it will not sell or otherwise
transfer any of the Warrant or the Warrant Shares, except in accordance with
applicable securities laws.
(D) The Holder represents and warrants that it is
able to bear the economic risk of losing its entire investment in the Warrant
and the Warrant Shares.
(E) Holder understands that the Warrant and the
Warrant Shares are being offered and sold in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company and its controlling persons are relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth in this Warrant to determine the applicability of such
exemptions and the suitability of the Holder to acquire the Warrant and the
Warrant Shares.
-7-
(F) Holder represents and warrants that the
information set forth in this Warrant concerning the Holder is true and correct.
(G) Holder acknowledges and understands the meaning
of the representations made by Holder in this Agreement and hereby agrees to
indemnify and hold harmless the Company and all persons deemed to be in control
of the Company from and against any and all loss, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the Holder of any such representations. All
representations set forth in subparagraphs (B), (C), (E) and (G) shall survive
the delivery of this Warrant and the purchase by the Holder of the Warrant and
any Warrant Shares.
EPL TECHNOLOGIES, INC.
By____________________________
Name: Xxxx X. Xxxxxx
Title: President and CEO
Attest:
________________________
Dated: December 9, 1999
-8-
EPL TECHNOLOGIES, INC.
PURCHASE FORM
Dated:
The undersigned hereby elects to exercise the within Warrant to
the extent of purchasing ___________ shares of Common Stock and hereby delivers
a bank or certified check or wire transfer constituting full payment of the
Exercise Price hereof.
_________________________________________________
-9-
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name____________________________________________________
(Please type or print in block letters)
Address________________________________________________
_______________________________________________________
Social Security Number (Employee Identification Number)
_______________________________________________________
Signature______________________________________________
-10-
