INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
AND
NETWORK 1 FINANCIAL SECURITIES, INC.
UNDERWRITER'S WARRANT AGREEMENT
UNDERWRITER'S WARRANT AGREEMENT dated as of ______________, 1998 by and
between INTERNATIONAL PLASTIC TECHNOLOGIES, INC., a Delaware corporation having
its principal office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 (the
"Company"), and NETWORK 1 FINANCIAL SECURITIES INC., a _____________ corporation
having its principal office at The Galleria, Building 2, Penthouse, 0 Xxxxxx
Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Network 1 Financial" or the "Underwriter").
Preliminary Statement
Network 1 Financial has agreed, pursuant to that certain underwriting
agreement dated ____________, 1998, between Network 1 Financial and the Company
(the "Underwriting Agreement"), to act as the representative of the underwriters
listed therein (together with Network 1 Financial, the "Syndicate") for the
Company's proposed initial public offering of 1,250,000 shares of the Company's
common stock, par value $0.001 per share (the "Common Stock"), and 1,250,000
Redeemable Common Stock Purchase Warrants (the "Warrants") on a firm commitment
basis, at an initial public offering price of $4.50 per share of Common Stock
and $0.10 per Warrant (the "Initial Public Offering").
The Company proposes to issue to Network 1 Financial at the closing of the
Initial Public Offering as part of Network 1 Financial's compensation in
connection therewith and in consideration of $10.00, warrants (the
"Underwriter's Warrants") to purchase an aggregate of 125,000 shares of Common
Stock and/or 125,000 Warrants. The Warrants being offered in the Initial Public
Offering and the Warrants purchasable upon exercise of the Underwriter's
Warrants will be identical in all respects and will be issued pursuant to, and
governed by, the provisions of that certain Warrant Agreement, dated
___________, 1998, among the Company, Network 1 Financial and Continental Stock
Transfer & Trust Company, as Warrant Agent (the "Warrant Agreement").
NOW, THEREFORE, in consideration of the foregoing, the payment by Network 1
Financial to the Company of Ten Dollars ($10.00), the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Holders (as defined in Section 4 below) are hereby granted
the right to purchase, at any time during the four-year period commencing
_____________, 1999, the one year anniversary of the date the Securities and
Exchange Commission (the "Commission") declares the Company's Registration
Statement on Form SB-2 (File No. 333-48701) therein registering the underwriting
warrants and securities issuable thereunder (the "Registration Statement")
effective (the "Effective Date"), until 5:00 p.m., New York City time, on
______________, 2003, the fifth anniversary date of the Effective Date, an
aggregate of 125,000 shares of Common Stock and/or 125,000 Warrants, at an
initial purchase price of $5.625 per share of Common Stock (subject to
adjustment as provided in Section 7 hereof) and $0.125 per Warrant (125% of the
Initial Public Offering price of the Common Stock and Warrants, respectively),
subject to the terms and conditions of this Agreement. In no event, are the
Underwriter's Warrants nor the Warrants issuable thereunder redeemable by the
Company.
2. Warrant Certificates. The warrant certificates (the "Underwriter's
Warrant Certificates") to be delivered pursuant to this Agreement shall be in
the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.
3. Recording of the Underwriter's Warrants. The Underwriter's Warrants
shall be numbered and shall be registered on the books of the Company.
2
4. Exercise of Underwriter's Warrants. The Underwriter's Warrants are
exercisable during the term set forth in Section 1 hereof and the Purchase Price
(as hereinafter defined) is payable by certified or official bank check in New
York Clearing House funds. Upon surrender of an Underwriter's Warrant
Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Purchase Price for the shares of Common Stock or
Warrants issuable upon exercise thereof (and such other amounts, if any, arising
pursuant to Section 4 hereof) at the Company's principal office in New York
(presently located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx 11735) or
other reasonably designated place, the registered holder of an Underwriter's
Warrant Certificate ("Holders" or "Holders") shall be entitled to receive a
certificate or certificates for the shares of Common Stock or Warrants so
purchased. The purchase rights represented by each Underwriter's Warrant
Certificate are exercisable at the option of the Holders thereof, in whole or in
part, as to the whole number of shares of Common Stock or Warrants purchasable
therewith (but not as to fractions thereof). In the case of the purchase of less
than all the shares of Common Stock or Warrants purchasable upon the exercise of
the Underwriter's Warrants represented by an Underwriter's Warrant Certificate,
the Company shall cancel the Underwriter's Warrant Certificate represented
thereby upon the surrender thereof and shall execute and deliver a new
Underwriter's Warrant Certificate of like tenor for the number of Underwriter's
Warrants which have not been exercised.
5. Issuance of Certificates. Upon the exercise of the Underwriter's
Warrants and payment of the Purchase Price therefor, the issuance of
certificates representing the shares of Common Stock or Warrants issuable upon
exercise thereof, shall be made forthwith (and in any event within five (5)
business days thereafter) without further charge to the Holder thereof, and such
3
certificates shall (subject to the provisions of Sections 6 and 8 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder, and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The Underwriter's
Warrant Certificates and the certificates representing the shares of Common
Stock or Warrants (and such other securities, property or rights as may be
represented by certificates) issuable upon exercise thereof shall be executed on
behalf of the Company by the manual or facsimile signature of the then Chairman
or Vice Chairman of the Board of Directors, Chief Executive Officer, President
or Vice President of the Company under its corporate seal reproduced thereon,
attested to by the manual or facsimile signature of the then Secretary or
Assistant Secretary or Treasurer or Assistant Treasurer of the Company.
Underwriter's Warrant Certificates shall be dated the date of issuance thereof
by the Company upon initial issuance, transfer or exchange, or in lieu of
mutilated, lost, stolen or destroyed Underwriter's Warrant Certificates.
6. Restriction On Transfer of Underwriter's Warrants. The Holder of an
Underwriter's Warrant Certificate (and its Permitted Transferees, as defined
below), by its acceptance thereof, covenants and agrees that the Underwriter's
Warrants are being acquired as an investment and not with a view to the
distribution thereof; that the Underwriter's Warrants may be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, to any
person (a "Permitted Transferee"), provided such transfer, assignment,
hypothecation or other disposition
4
is made in accordance with the provisions of the Securities Act of 1933, as
amended (the "Act"); and provided, further, that until ____________, 1999 only
officers and partners of the Underwriters, or any selling group member in the
Initial Public Offering and their respective officers and partners, shall be
Permitted Transferees.
7. Exercise Price. The initial exercise price of the Underwriter's Warrants
shall be $5.625 per share of Common Stock (the "Common Stock Exercise Price")
and $0.125 per Warrant. The Common Stock Exercise Price shall be subject to
adjustment in accordance with the provisions of Section 9 of the Warrant
Agreement, which provisions are hereby incorporated by reference herein and made
a part hereof.
8. Registration Rights.
(a) Demand Registration.
(1) At any time during the period commencing on the one-year
anniversary of the Effective Date expiring on the fifth anniversary
date of the Effective Date, the Holders of a majority (as hereinafter
defined) of the shares of Common Stock purchased and purchasable upon
exercise of the Underwriter's Warrants and the Warrants purchasable
therewith shall have the right, exercisable by written notice to the
Company, to have the Company at the Company's expense, prepare and
file with the Commission, solely on one (1) occasion, a registration
statement on Form SB-2 (or other appropriate form), and such other
documents, including a prospectus, as may be necessary in the opinion
of both counsel for the Company and counsel for the Holders, in order
to comply with the provisions of the Act, so as to permit a public
offering and sale for a period of nine (9) months of the shares of
Common Stock and Warrants purchased or purchasable by such Holders and
any other Holders of the Underwriter's Warrants upon
5
exercise of the Underwriter's Warrants and the Warrants purchasable
thereunder (such shares of Common Stock and Warrants being hereinafter
referred to as the "Registrable Securities"). The Holders of the
Underwriter's Warrants may demand registration without exercising the
Underwriter's Warrants, and are never required to exercise same.
(2) The Company covenants and agrees to give written notice of
any registration request under this Section 8(a) to all other
registered Holders of the Underwriter's Warrants and the Registrable
Securities within ten (10) days from the date of the receipt of any
such registration request and upon the written request of any Holder
within fifteen (15) days after receipt of such notice to include in
such registration statement, the Registrable Securities of such
Holder.
(3) As used herein, the term "Majority" in reference to the
Holders of the Underwriter's Warrants shall mean in excess of fifty
percent (50%) of the shares of Common Stock issued or issuable upon
exercise of the Underwriter's Warrants and the Warrants purchasable
thereunder that (i) are not held by the Company, an affiliate,
officer, creditor, employee or agent thereof or any of their
respective affiliates, members of their family, persons acting as
nominees or in conjunction therewith. or (ii) have not been resold to
the public pursuant to a registration statement filed with the
Commission under the Act.
(b) Piggyback Registration. If, at any time within the six-year period
commencing on the one-year anniversary date of the Effective Date and
expiring on the seventh anniversary date of the Effective Date, the Company
should file a registration statement with the Commission under the Act
(other than in connection with a merger or other business combination
transaction or pursuant to Form S-8 or a comparable registration statement)
it will give written notice by registered mail, at least thirty (30)
calendar days prior to the filing of each such registration
6
statement, to Network 1 Financial and to all other Holders of the
Underwriter's Warrants and the shares of Common Stock and Warrants
purchased or purchasable upon exercise thereof of its intention to do so.
If the Holders of the Registrable Securities notify the Company within
twenty (20) calendar days after receipt of any such notice of its or their
desire to include any Registrable Securities in such proposed registration
statement, the Company shall afford the Holders of the Registrable
Securities the opportunity to have such Registrable Securities included in
such registration statement, unless the underwriters for each proposed
registration statement objects to the inclusion of the Registrable
Securities in such registration statement. To the extents a subsequent
underwriter agrees to register a portion of the Underwriter's Warrants and
the shares of Common Stock and Warrants purchasable thereunder, such
inclusion shall be on a pro-rata basis to the holders thereof without
penalty to the unregistered holders. However, in such event, the Company
will, within six (6) months of completion of such underwritten offering,
file at the expense of the Company, a registration statement so as to
permit a public offering and sale of the Registrable Securities so excluded
for a period of nine (9) months, which shall be in addition to any
registration statement required to be filed pursuant to Section 8(b).
Notwithstanding the provisions of this Section 8(b) and the provisions of
Section 8(c), the Company shall have the right at any time after it shall
have given written notice pursuant to this Section 8(b) (irrespective of
whether a written request for inclusion of any such securities shall have
been made) to elect not to file any such proposed registration statement,
or to withdraw the same after the filing but prior to the effective date
thereof.
7
(c) Covenants of the Company With Respect to Registration. In
connection with any registrations under Sections 8(a) and 8(b) hereof, the
Company covenants and agrees as follows:
(1) The Company shall use its best efforts to file a registration
statement within ninety (90) calendar days of receipt of any demand
therefor pursuant to Section 8(a); provided, however, that the Company
shall not be required to produce audited or unaudited financial
statements for any period prior to the date such financial statements
are required to be filed in a report on Form 10-KSB or Form 10-QSB, as
the case may be. The Company shall use its best efforts to have any
registration statement declared effective at the earliest possible
time, and to maintain the effectiveness of such Registration Statement
for nine (9) months thereafter or until the registered securities are
sold, whichever is earlier, and shall furnish each Holder desiring to
sell Registrable Securities such number of prospectuses as shall
reasonably be requested.
(2) The Company shall pay all costs (excluding fees and expenses
of Holders' counsel and any underwriting discounts or selling fees,
expenses or commissions), fees and expenses in connection with any
registration statement filed pursuant to Sections 8(a) and 8(b) hereof
including, without limitation, the Company's legal and accounting
fees, printing expenses, blue sky fees and expenses. If the Company
shall fail to comply with the provisions of Section 8(c), the Company
shall, in addition to any other equitable or other relief available to
the Holders, be liable for any or all incidental and special damages
sustained by the Holders requesting registration of their Registrable
Securities.
(3) The Company will take all necessary action which may be
required to qualify or register the Registrable Securities included in
a registration statement for
8
offering and sale under the securities or blue sky laws of such states
as reasonably are requested by the Holders, provided that the Company
shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(4) The Company shall indemnify the Holders of the Registrable
Securities to be sold pursuant to any registration statement and each
person, if any, who controls such Holders within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), against all
loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under
the Act, the Exchange Act or otherwise, arising from such registration
statement, but only to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to indemnify each
member of the Syndicate contained in Section 8 of the Underwriting
Agreement, and the Holders shall indemnify the Company to the same
extent and with the same effect as the provisions pursuant to which
the members of the Syndicate have agreed to indemnify the Company
contained in Section 8 of the Underwriting Agreement.
(5) The Holders of the Registrable Securities to be sold pursuant
to a registration statement, and their successors and assigns, shall
indemnify the Company, its officers and directors and each person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, 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
9
Exchange Act or otherwise, arising from information furnished by or on
behalf of such Holders, or their successors or assigns, for specific
inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in Section 8 of the
Underwriting Agreement pursuant to which the members of the Syndicate
have agreed to indemnify the Company.
(6) Nothing contained in this Agreement shall be construed as
requiring the Holders to exercise their Underwriter's Warrants (or the
Warrants purchasable upon exercise thereof) prior to the initial
filing of any registration statement or the effectiveness thereof.
(7) The Company shall not be entitled to include any securities
other than the Registrable Securities in any registration statement
filed pursuant to Section 8(a) hereof without the prior written
consent of the Holders of a Majority of the Registrable Securities.
(8) The Company shall furnish to a designated representative of
the Holders participating in the offering and to each underwriter, if
any, a signed counterpart, addressed to such Holder or underwriter of
(i) an opinion of counsel to the Company, dated the effective date of
such registration statement (and if such registration relates to an
underwritten public offering, an opinion dated the date of the closing
under the underwriting agreement), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration relates to an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed
by the independent public accountants who have issued a report on the
Company's financial statements included in such registration statement
(the "Accountants"), in each case covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein) and, in the case of the Accountants'
"cold comfort" letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions
10
of issuer's counsel and in "cold comfort" letters delivered to
underwriters in underwritten public offerings of securities.
(9) The Company shall as soon as practicable after the effective
date of the registration statement make "generally available to its
security holders" (within the meaning of Rule 158 under the Act) an
earnings statement (which need not be audited) complying with Section
11(a) of the Act and covering a period of at least 12 consecutive
months beginning after the effective date of the registration
statement.
(10) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence described
below and any managing underwriters copies of all correspondence
between the Commission and the Company, its counsel or Accountants
with respect to the registration statement and permit each Holder and
underwriter to do such investigation, upon reasonable advance notice,
with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of
Securities Dealers, Inc. ("NASD"). Such investigation shall include
access to books, records and properties and opportunities to discuss
the business of the Company with its officers and representatives of
the Accountants, all to such reasonable extent and at such reasonable
times and as often as any such Holder shall reasonably request.
(11) The Company shall enter into an underwriting agreement with
the managing underwriters selected for such underwriting by Holders
holding a Majority of the Registrable Securities requested to be
included in such underwriting; provided, however, that (i) such
managing underwriters shall be reasonably acceptable to the Company,
except that in connection
11
with an offering for which the Holders have piggyback rights, the
Company shall have the sole right to select the managing underwriters,
and (ii) the Holders shall be responsible for any selling fees or
commissions in connection with such underwriting. Such underwriting
agreement shall be satisfactory in form and substance to the Company,
a Majority of such Holders and such managing underwriters, and shall
contain such representations, warranties and covenants by the Company
and such other terms as are customarily contained in agreements of
that type used by the managing underwriter. The Holders shall be
parties to any underwriting agreement relating to an underwritten sale
of their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made
to and for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or agreements
with the Company or the underwriters except as they may relate to such
Holders and their intended methods of distribution.
(d) Further Registrations. The Company will cooperate with the Holders
of the Registrable Securities in preparing and signing any registration
statement, in addition to the registration statements discussed above,
required in order to sell or transfer the Underwriter's Securities and will
supply all information required therefor, but such additional registration
statement expenses or offering statement expenses will be prorated between
the Company and the Holders of the Registrable Securities according to the
aggregate sales price of the securities being issued. The provisions of
Section 8(c) shall apply to any such registration statement.
9. Obligations of Holders. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 8 hereof that
each of the selling Holders shall:
12
(a) Furnish to the Company such information regarding themselves, the
Registrable Securities held by them, the intended method of sale or other
disposition of such securities, the identity of and compensation to be paid
to any underwriters proposed to be employed in connection with such sale or
other disposition, and such other information as may reasonably be required
to effect the registration of their Registrable Securities.
(b) Notify the Company, at any time when a prospectus relating to the
Registrable Securities covered by a registration statement is required to
be delivered under the Act, of the happening of any event with respect so
such selling Holder as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
10. Exchange and Replacement of Warrant Certificates. Each Underwriter's
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holders at the principal executive office of the Company for a
new Underwriter's Warrant Certificate of like tenor and date representing in the
aggregate the right to purchase the same number of shares of Common Stock and/or
Warrants in such denominations as shall be designated by the Holders thereof at
the time of such surrender. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any
Underwriter's Warrant Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of the Underwriter's Warrant Certificates, if mutilated, the
Company will make and deliver a new Underwriter's Warrant Certificate of like
tenor, in lieu thereof.
13
11. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock upon the
exercise of the Underwriter's Warrants, nor shall it be required to issue scrip
or pay cash in lieu of fractional interests; provided, however, that if a Holder
exercises all Underwriter's Warrants held of record by such Holder, the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Common Stock.
12. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Underwriter's Warrants,
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of Underwriter's Warrants and payment of the Purchase Price
therefor, all shares of Common Stock, Warrants and Common Stock issuable upon
the exercise hereof shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder voting trust,
agreement or indenture. The Company further covenants and agrees that as long as
the Underwriter's Warrants shall be outstanding, the Company shall use its best
efforts to cause the Common Stock and Warrants to be listed (subject to official
notice of issuance) on all securities exchanges on which the Common Stock and
the Warrants issued in the Initial Public Offering may then be listed or quoted.
13. Notices to Underwriter's Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If,
14
however, at any time prior to the expiration of the Underwriter's Warrants and
their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall
be proposed;
then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend, or the issuance of
any convertible or exchangeable securities, or subscription rights, options
or warrants, or any proposed dissolution, liquidation, winding up or sale.
15
14. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holders of the Underwriter's Warrants, to the
address of such Holders as shown on the books of the Company; or
(b) If to the Company to the address set forth in Section 4 hereof or
to such other address as the Company may designate by notice to the
Holders.
15. Supplements and Amendments. The Company and Network 1 Financial may
from time to time supplement or amend this Agreement without the approval of any
Holders of Underwriter's Warrant Certificates (other than Network 1 Financial)
in order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and Network 1 Financial may deem necessary or desirable and
which the Company and Network 1 Financial deem shall not adversely affect the
interests of the Holders of Underwriter's Warrant Certificates.
16. Successors. All the covenants and provisions of this Agreement shall be
binding upon and inure to the benefit of the Company, Network 1 Financial, the
Holders and their respective successors and assigns hereunder.
17. Termination. This Agreement shall terminate at the close of business on
the later of the expiration of the Underwriter's Warrants or the registration
rights contained in Section 8 hereof.
16
18. Governing Law; Submission to Jurisdiction. This Agreement and each
Underwriter's Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said state without giving effect to
the rules of said state governing the conflicts of laws. The Company, Network 1
Financial and the Holders hereby agree that any action, proceeding or claim
against it arising out of, or relating in any way to, this Agreement shall be
brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. The Company,
Network 1 Financial and the Holders hereby irrevocably waive any objection to
such exclusive jurisdiction or inconvenient forum. Any such process or summons
to be served upon any of the Company, Network 1 Financial and the Holders (at
the option of the party bringing such action, proceeding or claim) may be served
by transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
14 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the party so served in any action, proceeding or claim.
19. Entire Agreement; Modification. This Agreement (including the
Underwriting Agreement, to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and thereof. Subject to Section 15, this Agreement may not
be modified or amended except by a writing duly signed by the Company and the
Holders of a Majority of the Registrable Securities.
17
20. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
21. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
22. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and
Network 1 Financial and any other registered Holders of the Underwriter's
Warrant Certificates or Registrable Securities any legal or equitable right,
remedy or claim under this Agreement, and this Agreement shall be for the sole
and exclusive benefit of the Company and Network 1 Financial and any other
Holders of the Underwriter's Warrant Certificates or Registrable Securities.
23. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
24. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company, Network 1 Financial and their respective successors and
assigns and the Holders from time to time of the Underwriter's Warrant
Certificates.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
By: _____________________________________
Xxxxxx Xxxxxxxx
Chief Executive Officer
NETWORK 1 FINANCIAL SECURITIES, INC.
By: _____________________________________
Name:
Title:
19
EXHIBIT A
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
WARRANT CERTIFICATE
THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING ____________, 1999 THROUGH
5:00 P.M., NEW YORK CITY TIME ON ____________, 2003
No. UW-1 125,000 Warrants
This Warrant Certificate certifies that Network 1 Financial Securities,
Inc., ("Network 1 Financial") or registered assigns, is the registered holder of
125,000 Warrants to purchase initially, at any time from _________, 1999 until
5:00 p.m., New York City time on ________, 2003 (the "Expiration Date"), 125,000
fully paid and non-assessable shares of Common Stock, $.001 par value (the
"Common Stock"), of International Plastic Technologies, Inc., a Delaware
corporation (the "Company") at a purchase price of $5.625 per share (the "Common
Stock Purchase Price"), and/or 125,000 Redeemable Common Stock Purchase Warrants
("Warrants") of the Company at the purchase price of $0.125 per Warrant (the
"Warrant Purchase Price"), upon the surrender of this Warrant Certificate and
payment of the applicable Purchase Price at an office or agency of the Company,
but subject to the conditions set forth herein and in that certain warrant
agreement, dated as of _______, 1998, between the Company and Network 1
Financial Securities, Inc. (the "Warrant Agreement"). Payment of the applicable
Purchase Price shall be made by certified or official bank check in New York
Clearing House Funds.
No Warrant may be exercised after 5:00 p.m., New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
A-1
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement between
the Company and Network 1 Financial, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the respective Purchase Prices and the type and/or number of the Company's
securities issuable upon the exercise of this Warrant, may, subject to certain
conditions, be adjusted. In such event, the Company will, at the request of the
holder, issue a new Warrant Certificate evidencing the adjustment in the
Purchase Price and the number and/or type of securities issuable upon the
exercise of the Warrants; provided, however, that the failure of the Company to
issue such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
A-2
IN WITNESS WHEREOF, the undersigned has executed this certificate this
________________ 1998.
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
By: ____________________________________
Xxxxxx Xxxxxxxx
Chief Executive Officer
ATTEST
By: ____________________________
Xxxxx Xxxxxxx
Secretary
[SEAL]
A-3
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint his or its attorney-in-fact
to transfer the within Warrant Certificate on the books of International Plastic
Technologies, Inc., with full power of substitution.
Dated:
Signature ________________________________
(Signature must conform in all respects to
the name of holder as specified on the
face of the Warrant Certificate.)
------------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
A-4
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right represented by
this Warrant Certificate to purchase:
__________ shares of Common Stock
__________ Redeemable Common Stock Warrants
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House funds payable to the order of
International Plastic Technologies, Inc. in the amount of $___________, all in
accordance with the terms hereof. The undersigned requests that certificates for
such securities be registered in the name of whose address is and that such
certificates be delivered to ________________________________________________
whose address is _________________________________________________________.
Dated:
Signature ________________________________
(Signature must conform in all respects to
the name of holder as specified on the
face of the Warrant Certificate.)
--------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
A-5
