WARRANT AGREEMENT
AMONG
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
a Delaware corporation,
NETWORK 1 FINANCIAL SECURITIES, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY.
TABLE OF CONTENTS
Section Page
------- ----
1. APPOINTMENT OF WARRANT AGENT ....................................... 2
2. FORM OF WARRANT .................................................... 2
3. COUNTERSIGNATURE AND REGISTRATION .................................. 4
4. TRANSFERS AND EXCHANGES ............................................ 4
5. EXERCISE OF WARRANTS; PAYMENT OF WARRANT SOLICITATION
FEE ........................................................... 5
6. PAYMENT OF TAXES ................................................... 9
7. MUTILATED OR MISSING WARRANTS ......................................10
8. RESERVATION OF COMMON STOCK ........................................10
9. ADJUSTMENTS OF WARRANT PRICE AND NUMBER OF SECURITIES ..............11
10. FRACTIONAL INTERESTS ...............................................21
11. NOTICES TO WARRANTHOLDERS ..........................................21
12. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS ....................23
13. REDEMPTION OF WARRANTS .............................................23
14. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
WARRANT AGENT .................................................24
15. DUTIES OF WARRANT AGENT ............................................25
16. CHANGE OF WARRANT AGENT ............................................27
17. IDENTITY OF TRANSFER AGENT .........................................29
18. NOTICES ............................................................29
19. SUPPLEMENTS AND AMENDMENTS .........................................30
20. NEW YORK CONTRACT ..................................................31
21. BENEFITS OF THIS AGREEMENT .........................................31
22. SUCCESSORS .........................................................31
23. SEVERABILITY .......................................................31
24. CAPTIONS ...........................................................32
23. COUNTERPARTS .......................................................32
WARRANT AGREEMENT, dated as of ________, 1998, among International Plastic
Technologies, Inc., a Delaware corporation (the "Company"), Network 1 Financial
Securities, Inc. ("Network 1 Financial" or "Representative") and Continental
Stock Transfer & Trust Company, as warrant agent (the "Warrant Agent").
The Company proposes to issue and sell through an initial public offering
(the "IPO") underwritten by a group of underwriters (the "Syndicate") for whom
Network 1 Financial is acting as the representative on a firm commitment basis,
an aggregate of 1,250,000 shares of common stock, $.001 par value, of the
Company (the "Common Stock"), and 1,250,000 redeemable Common Stock purchase
warrants ("Warrants") to purchase an equal number of shares of Common Stock in
accordance with Section 2(b) hereof and, pursuant to Network 1 Financial's
over-allotment option (the "Over-allotment Option"), an additional 187,500
shares of Common Stock and 187,500 Warrants. The shares of Common Stock and
Warrants shall be purchased separately in the IPO.
In consideration for its services as representative of the Syndicate in
connection with the IPO, the Company proposes to sell to Network 1 Financial
warrants (the "Underwriter's Warrants") to purchase 125,000 shares of Common
Stock and 125,000 Warrants for an aggregate purchase price of $10.00.
The Company desires the Warrant Agent to act on behalf of the Company, and
the Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange and exercise of the Warrants. The Warrants
shall be redeemable by the Company as set forth in Section 13 hereof.
THEREFORE, the parties hereto agree as follows:
Section 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the
Warrant Agent to act as Warrant Agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
Upon the execution of this Agreement, certificates representing 1,250,000
Warrants to purchase an aggregate of 1,250,000 shares of Common Stock (subject
to modification and adjustment as provided in Section 9 hereof) shall be
executed by the Company and delivered to the Warrant Agent.
Upon the exercise of the Over-allotment Option, certificates representing
up to 187,500 Warrants to purchase an aggregate of 187,500 shares of Common
Stock (subject to adjustment as provided in Section 9 hereof) shall be executed
by the Company and delivered to the Warrant Agent.
Upon exercise of the Underwriter's Warrant as provided therein,
certificates representing 125,000 Warrants to purchase an aggregate of 125,000
shares of Common Stock (subject to adjustment as provided in Section 9 hereof)
shall be executed by the Company and delivered to the Warrant Agent.
Section 2. FORM OF WARRANT.
(a) The text of the Warrants and the form of election to purchase Common
Stock to be printed on the reverse thereof shall be substantially as set forth
in Exhibit A attached hereto (the provisions of which are hereby incorporated
herein). All of the certificates for the Warrants 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
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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.
(b) Each Warrant shall initially entitle the registered holder thereof to
purchase one share of Common Stock at a purchase price of five dollars ($5.00)
(as adjusted as hereinafter provided, the "Exercise Price"), at any time during
the four-year period (the "Exercise Period") commencing on _______, 1999, the
one year anniversary of the date the Securities and Exchange Commission declares
the Company's registration statement on Form SB-2 filed on March 26, 1998, File
No. 333-48701 (the "Registration Statement") to be effective (the "Effective
Date") and expiring at 5:00 p.m. New York City time, on _______, 2003, the fifth
anniversary of the Effective Date (the "Expiration Date"). The Exercise Price
and the number of shares of Common Stock issuable upon exercise of the Warrants
are subject to adjustment upon the occurrence of certain events, all as
hereinafter provided. The Warrants shall be executed on behalf of the Company by
the manual or facsimile signature of the present or any future Chairman of the
Board or Vice Chairman, Chief Executive Officer, President or Vice President of
the Company, and attested to by the manual or facsimile signature of the present
or any future Secretary, Treasurer, or Assistant Secretary or Assistant
Treasurer of the Company, and shall have imprinted thereon a facsimile of the
Company's seal.
(c) Warrants shall be dated as of the date of issuance by the Warrant Agent
either upon initial issuance or upon transfer or exchange and issued in
registered form. Warrants
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shall be numbered serially with the letter "W" on the Warrants. Warrants shall
be redeemable as set forth in Section 13 hereof.
(d) In the event the Expiration Date falls on a day that is not a business
day, then the Warrants shall expire at 5:00 p.m. New York City time on the next
succeeding business day. For purposes hereof, the term "business day" shall mean
any day other than a Saturday, Sunday or a day on which banking institutions in
New York City, New York, are authorized or obligated by law to be closed.
Section 3. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective holders thereof. The Warrants shall be
countersigned manually or by facsimile by the Warrant Agent (or by any successor
to the Warrant Agent then acting as warrant agent under this Agreement) and
shall not be valid for any purpose unless so countersigned. The Warrants may,
however, be so countersigned by the Warrant Agent (or by its successor as
Warrant Agent) and be delivered by the Warrant Agent, notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature or delivery.
Section 4. TRANSFERS AND EXCHANGES. The Warrant Agent shall transfer, from
time to time, any outstanding Warrants upon the books to be maintained by the
Warrant Agent for that purpose, upon surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant shall be issued to the transferee or in accordance with
such transferee's instructions and the surrendered Warrant
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shall be canceled by the Warrant Agent and reflected in the record books of the
Company. Warrants so canceled shall be delivered by the Warrant Agent to the
Company from time to time upon request. Warrants may be exchanged at the option
of the holder thereof, when surrendered at the office of the Warrant Agent, for
another Warrant, or other Warrants of different denominations of like tenor and
representing in the aggregate the right to purchase a like number of shares of
Common Stock. No certificates for Warrants shall be issued except for (i)
Warrants initially issued hereunder in accordance with Section 1 hereof, (ii)
Warrants reflecting the partial exercise of a predecessor Warrant by the holder
thereof, (iii) Warrants issued upon any transfer or exchange of Warrants, (iv)
Warrants issued in replacement of lost, stolen, destroyed or mutilated
certificates for Warrants pursuant to Section 7 hereof, and (v) at the option of
the Board of Directors of the Company, Warrants in such form as may be approved
by its Board of Directors, to reflect any adjustment or change in the Exercise
Price or the number of shares of Common Stock issuable upon exercise of the
Warrants pursuant to Section 9 hereof.
Section 5. EXERCISE OF WARRANTS; PAYMENT OF WARRANT SOLICITATION FEE.
Subject to the provisions of this Agreement, each registered holder of Warrants
shall have the right, at any time during the Exercise Period, to exercise such
Warrants and purchase the number of shares of Common Stock specified in such
Warrants upon presentation and surrender of such Warrants to the Company at the
corporate office of the Warrant Agent, with the exercise form on the reverse
thereof duly executed, and upon payment to the Company of the Exercise Price,
determined in accordance with the provisions of Sections 2, 9 and 10 of this
Agreement, for the number of shares of Common Stock in respect of which such
Warrants are then exercised. Payment of the Exercise Price shall be made in cash
or
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by certified or official bank check in New York Clearing House funds payable to
the order of the Company. Subject to Section 6 hereof, upon such surrender of
Warrants and payment of the Exercise Price, the Warrant Agent, on behalf of the
Company, shall cause to be issued and delivered with all reasonable dispatch to
or upon the written order of the registered holder of such Warrants and in such
name or names as such registered holder may designate, a certificate or
certificates for the number of full shares of Common Stock so purchased upon the
exercise of such Warrants. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares of Common Stock
immediately prior to the close of business on the date of the surrender of such
Warrants and payment of the Exercise Price as aforesaid. The rights of purchase
represented by the Warrants shall be exercisable during the Exercise Period, at
the election of the registered holders thereof, either in their entirety or from
time to time for a portion of the shares specified therein and, in the event
that any Warrant is exercised in respect of less than all of the shares of
Common Stock specified therein at any time prior to the earlier of the
Expiration Date or date of redemption pursuant to Section 13 hereof, a new
Warrant or Warrants will be issued to the registered holder for the remaining
number of shares of Common Stock specified in the Warrant so surrendered, and
the Warrant Agent is hereby irrevocably authorized to countersign and to deliver
the required new Warrants pursuant to the provisions of this Section 5 and of
Section 3 of this Agreement and the Company, whenever requested by the Warrant
Agent, will supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose. Upon the exercise of any one or more Warrants, the
Warrant Agent shall promptly notify the Company in writing of such fact and of
the number of securities
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delivered upon such exercise and, subject to the provisions below, shall cause
all payments of an amount, in cash or by check made payable to the order of the
Company, equal to the aggregate Exercise Price for such Warrants, less any
amounts payable to the Representative pursuant to Section 5(a) below, to be
deposited promptly in the Company's bank account. The Company and Warrant Agent
shall determine, in their sole and absolute discretion, whether a Warrant
certificate has been properly completed for exercise by the registered holder
thereof.
Anything in the foregoing to the contrary notwithstanding, no Warrant shall
be exercisable and the Company shall not be obligated to deliver any securities
pursuant to the exercise of any Warrant unless at the time of exercise the
Company has filed with the Securities and Exchange Commission a registration
statement pursuant to the Securities Act of 1933, as amended (the "Act"),
therein registering the securities issuable upon exercise of such Warrant and
such registration statement shall have been declared and shall remain effective
and shall be current, and such shares have been registered or qualified or be
exempt under the securities laws of the state or other jurisdiction of residence
of the holder of such Warrant and the exercise of such Warrant in any such state
or other jurisdiction shall not otherwise be unlawful. During the Exercise
Period, the Company shall use its best efforts to have a current registration
statement on file with the Securities and Exchange Commission covering the
issuance of Common Stock underlying the Warrants so as to permit the Company 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 prospectus to each such person. During the Exercise
Period, the Company shall also use its best efforts to effect appropriate
qualifications of the Common Stock underlying the Warrants under the laws and
regulations of the states and other
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jurisdictions in which the Common Stock and Warrants are sold by the
Underwriters in the IPO in order to comply with applicable laws in connection
with the exercise of the Warrants.
(a) If at the time of exercise of any Warrant (i) the market price of the
Common Stock is not less than the then exercise price of the Warrant, (ii) the
exercise of the Warrant is solicited by the Representative at such time as it is
a member of the National Association of Securities Dealers, Inc. ("NASD") and
the Representative is designated in writing by the holder of the Warrants as the
NASD member soliciting the exercise, (iii) the Warrant is not held in a
discretionary account, (iv) disclosure of the compensation arrangements is made
in documents provided to the holders of the Warrants both at the time of the IPO
and at the time of the exercise of the Warrants, and (v) the solicitation of the
exercise of the Warrants is not in violation of Rule 101 of Regulation M (as
such rule or any successor rule may be in effect as of such time of exercise)
promulgated under the Securities Exchange Act of 1934, as amended, then the
Representative shall be entitled to receive from the Company following exercise
of each of the Warrants so exercised a fee of five percent (5%) of the aggregate
exercise price of the Warrants so exercised (the "Exercise Fee"). The procedures
for payment of the Exercise Fee are set forth in Section 5(b) below.
(b) (i) Within five (5) days after the last day of each month commencing
with _________, 1999, one year after the Effective Date, the Warrant Agent will
notify the Representative of each Warrant certificate which has been properly
completed for exercise by holders of Warrants during the last month. The Warrant
Agent will provide the Representative with such information, in connection with
the exercise of each Warrant, as the Representative shall reasonably request.
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(ii) The Company hereby authorizes and instructs the Warrant Agent to
deliver to the Representative the Exercise Fee, if payable, in respect of each
exercise of Warrants, directly from the Exercise Price remitted to the Warrant
Agent in accordance with this Section 5. In the event that an Exercise Fee is
paid to the Representative with respect to a Warrant which the Company and the
Warrant Agent reasonably determine is not properly completed for exercise or in
respect of which the Representative is not entitled to an Exercise Fee, the
Representative will return such Exercise Fee to the Warrant Agent which shall
forthwith return such fee to the Company.
The Representative and the Company may at any time 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 paragraph 5 (a)
and 5 (b) may not be modified, amended or deleted without the prior written
consent of the Representative.
Section 6. PAYMENT OF TAXES. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Common Stock issuable upon the
exercise of Warrants; 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 or delivery of any certificates for shares of Common Stock in a name
other than that of the registered holder of Warrants in respect of which such
shares are issued, and in such case neither the Company nor the Warrant Agent
shall be required to issue or deliver any certificate for shares of Common Stock
or any Warrant until the person requesting the same has paid to the Company the
amount of such tax or has
9
established to the Company's satisfaction that such tax has been paid or that no
such tax is required to be paid.
Section 7. MUTILATED OR MISSING WARRANTS. In the event that any Warrants
are mutilated, lost, stolen or destroyed, the Company may, in its discretion,
issue and the Warrant Agent shall countersign and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu of
and in substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and representing an equivalent right or interest, but only upon
receipt of evidence satisfactory to the Company and the Warrant Agent of such
loss, theft or destruction and, in case of a lost, stolen or destroyed Warrant,
indemnity or bond, if requested, also satisfactory to them. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such reasonable charges as the Company or the Warrant Agent may prescribe.
Section 8. RESERVATION OF COMMON STOCK. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized shares of Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the Warrants, and the transfer agent
for the shares of Common Stock and every subsequent transfer agent for any
shares of Common Stock issuable upon the exercise of any of the aforesaid rights
of purchase are irrevocably authorized and directed at all times to reserve such
number of authorized shares of Common Stock as shall be required for such
purpose. The Company covenants that all shares of Common Stock issuable upon
exercise of the Warrants shall be, at the time of delivery of the certificates
for such shares against payment of the Exercise Price therefor, validly issued,
fully paid, nonassessable, free of any preemptive
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rights, voting trust or indenture and listed on any national securities exchange
or included in any interdealer automated quotation system upon or in which the
other shares of outstanding Common Stock are then listed or included. The
Company will keep a copy of this Agreement on file with the transfer agent for
the shares of Common Stock (which may be the Warrant Agent) and with every
subsequent transfer agent for any shares of Common Stock issuable upon the
exercise of the Warrants. The Warrant Agent is irrevocably authorized to
requisition from time to time from such transfer agent stock certificates
required to honor outstanding Warrants. The Company will supply such transfer
agent with duly executed stock certificates for that purpose. All Warrants
surrendered in the exercise of the rights thereby evidenced shall be canceled by
the Warrant Agent and shall thereafter be delivered to the Company, and such
canceled Warrants shall constitute sufficient evidence of the number of shares
of Common Stock which have been issued upon the exercise of such Warrants.
Promptly after the date of expiration of the Warrants, the Warrant Agent shall
certify to the Company the total aggregate amount of Warrants then outstanding,
and thereafter no shares of Common Stock shall be subject to reservation in
respect of such Warrants which shall have expired.
Section 9. ADJUSTMENTS OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) Computation of Adjusted Price. Except as hereinafter provided, in case
the Company shall, at any time after the date of closing of the sale of
securities pursuant to the IPO (the "Closing Date"), issue or sell any shares of
Common Stock (other than the issuances or sales referred to in Section 9(f)
hereof), including shares held in the Company's treasury and shares of Common
Stock issued upon the exercise of any options, rights or warrants to subscribe
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for shares of Common Stock (other than the issuances or sales of Common Stock
pursuant to rights to subscribe for such Common Stock distributed pursuant to
Section 9(h) hereof) and shares of Common Stock issued upon the direct or
indirect conversion or exchange of securities for shares of Common Stock, (i)
for a consideration per share less than the lesser of the (A) "Market Price" (as
defined in Section 9(a)(vi) hereof) per share of Common Stock on the trading day
immediately preceding such issuance or sale or (B) the Exercise Price in effect
immediately prior to such issuance or sale, or (ii) without consideration, then
forthwith upon such issuance or sale, the Exercise Price shall (until another
such issuance or sale) be reduced to the price (calculated to the nearest full
cent) determined by multiplying the Exercise Price in effect immediately prior
to such issuance or sale by a fraction, the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding immediately prior to
such issuance or sale multiplied by the Exercise Price immediately prior to such
issuance or sale plus (2) the consideration received by the Company upon such
issuance or sale, and the denominator of which shall be the product of (x) the
total number of shares of Common Stock outstanding immediately after such
issuance or sale, multiplied by (y) the Exercise Price immediately prior to such
issuance or sale; provided, however, that in no event shall the Exercise Price
be adjusted pursuant to this computation to an amount in excess of the Exercise
Price in effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 9(c)
hereof. In no event shall the Exercise Price be increased.
For the purposes of any computation to be made in accordance with this
Section 9(a), the following provisions shall be applicable:
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(i) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by
the Company for such shares (or, if shares of Common Stock are offered by
the Company for subscription, the subscription price, or, if such
securities shall be sold to underwriters or dealers for public offering
without a subscription offering, the public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company) of shares of Common Stock
for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash shall be deemed to be
the fair market value of such consideration as determined in good faith by
the Board of Directors of the Company.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following the
record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.
(iv) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for
a consideration other than cash immediately prior to the close of business
on the date fixed for the determination of security holders entitled
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to receive such shares, and the value of the consideration allocable to
such shares of Common Stock shall be determined as provided in subsection
(ii) of this Section 9(a).
(v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable upon the
exercise of options, warrants or rights and upon the conversion or exchange
of convertible or exchangeable securities.
(vi) As used herein, the phrase "Market Price" at any date shall be
deemed to be the average of the last reported sale price, or, in case no
such reported sale takes place on such day, the average of the last
reported sale prices for the last three trading days, in either case as
officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading or as reported by the Nasdaq
Stock Market, Inc. ("NASDAQ") or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on the
NASDAQ National Market ("NMS"), but is quoted on The NASDAQ SmallCap Market
or the NASD's Electronic Bulletin Board, the closing bid quotation as
reported by NASDAQ the National Quotation Bureau Incorporated or a similar
organization, or if the Common Stock is not quoted on NASDAQ or the
Electronic Bulletin Board, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available
to it for the day immediately preceding such issuance or sale, the day of
such issuance or sale and the day immediately after such issuance or sale.
If the Common Stock is listed or admitted to trading on a national
securities exchange and also quoted on the NASDAQ National Market, the
Market Price shall be determined as herein above provided by reference to
the prices reported in the NASDAQ National Market; provided that if the
Common
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Stock is listed or admitted to trading on the New York Stock Exchange, the
Market Price shall be determined as herein above provided by reference to
the prices reported by such exchange.
(b) Options, Rights, Warrants and Convertible and Exchangeable Securities.
Except in the case of the Company issuing rights to subscribe for shares of
Common Stock distributed pursuant to Section 9(h) hereof, if the Company shall
at any time after the Closing Date issue options, rights or warrants to
subscribe for shares of Common Stock, or issue any securities convertible into
or exchangeable for shares of Common Stock, in each case other than the
issuances or sales referred to in Section 9 (f) hereof, (i) for a consideration
per share less than the lesser of (A) the Exercise Price in effect immediately
prior to the issuance of such options, rights or warrants, or such convertible
or exchangeable securities, or (B) the Market Price on the trading day
immediately preceding such issuance, or (ii) without consideration, the Exercise
Price in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in accordance
with the provisions of Section 9(a) hereof; provided that:
(i) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable under all the outstanding options, rights or
warrants, less those securities redeemed, expired, terminated or otherwise
not exercisable at the time of such anti-dilution calculation, shall be
deemed to be issued and outstanding at the time all the outstanding
options, rights or warrants were issued, and for a consideration equal to
the minimum purchase price per share provided for in the options, rights or
warrants at the time of issuance, plus the consideration (determined in the
same manner as consideration received on the issue or sale of shares in
accordance with the terms of Section 9(a)), if any, received by the
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Company for the options, rights or warrants, and if no minimum purchase
price is provided in the options, rights or warrants, then the minimum
purchase price shall be equal to zero.
(ii) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities,
excluding those securities not convertible or exchangeable at the time of
such anti-dilution calculation, shall be deemed to be issued and
outstanding at the time of issuance of such securities, and for a
consideration equal to the consideration (determined in the same manner as
consideration received on the issue or sale of shares of Common Stock in
accordance with the terms of Section 9(a)) received by the Company for such
securities, plus the minimum consideration, if any, receivable by the
Company upon the conversion or exchange thereof. No adjustment will be made
pursuant to this subsection (ii) upon the issuance by the Company of any
convertible or exchangeable securities pursuant to the exercise of any
option, right or warrant exercisable therefor, to the extent that
adjustments in respect of such options, rights or warrants were previously
made pursuant to the provisions of subsection (i) of this subsection 9(b).
(iii) If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subsection (i) of
this Section 9(b), or in the price per share at which the securities
referred to in subsection (ii) of this Section 9(b) are convertible or
exchangeable, or if any such options, rights or warrants are exercised at a
price greater than the minimum purchase price provided for in such options,
rights or warrants, or any such securities are converted or exercised for
more than the minimum consideration receivable by the Company upon such
conversion or exchange, the options, rights or warrants or conversion or
exchange rights, as the case may be, shall be deemed to have expired or
terminated on the date
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when such price change became effective in respect of shares not
theretofore issued pursuant to the exercise or conversion or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or convertible or exchangeable securities at
the new price in respect of the number of shares issuable upon the exercise
of such options, rights or warrants or the conversion or exchange of such
convertible or exchangeable securities; provided, however, that no
adjustment shall be made pursuant to this subsection (iii) with respect to
any change in the price per share provided for in any of the options,
rights or warrants referred to in subsection (b)(i) of this Section 9(b),
or in the price per share at which the securities referred to in subsection
(b)(ii) of this Section 9(b) are, convertible or exchangeable, which change
results from the application of the anti-dilution provisions thereof in
connection with an event for which, subject to subsection (iv) of Section
9(f), an adjustment to the Exercise Price and the number of securities
issuable upon exercise of the Warrants will be required to be made pursuant
to this Section 9.
(c) Subdivision and Combination. In case the Company shall at any time
after the Closing Date subdivide or combine the outstanding shares of Common
Stock, the Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination.
(d) Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 9, the number of shares of
Common Stock issuable upon the exercise of the Warrants shall be adjusted to the
nearest full whole number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of the Warrants immediately
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prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price; provided, however, that the number of shares of Common Stock
purchasable upon exercise of the Warrant shall not be decreased.
(e) Reclassification, Consolidation, Merger. etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder were the owner of the shares of
Common Stock underlying the Warrants immediately prior to any such events at a
price equal to the product of (x) the number of shares issuable upon exercise of
the Warrants and (y) the Exercise Price in effect immediately prior to the
record date for such reclassification, change, consolidation, merger, sale or
conveyance as if such Holder had exercised the Warrant.
(f) No Adjustment of Exercise Price in Certain Cases. Notwithstanding
anything herein to the contrary, no adjustment of the Exercise Price shall be
made:
(i) Upon the issuance or sale of the Underwriter's Warrants, the
shares of Common Stock or Warrants issuable upon the exercise of the
Underwriter's Warrants or the
18
shares of Common Stock issuable upon exercise of the Warrants underlying
the Underwriter's Warrants; or
(ii) Upon the issuance or sale of (A) the shares of Common Stock or
Warrants issued by the Company in the IPO (including pursuant to the
Over-allotment Option) or other shares of Common Stock or warrants issued
by the Company upon consummation of the IPO or, (B) the shares of Common
Stock (or other securities) issuable upon exercise of Warrants; or
(iii) Upon (A) the issuance of shares of Common Stock and options
pursuant to the Company's stock option plan in effect on the date hereof or
as hereafter amended in accordance with the terms thereof or any other
employee or executive stock option plan approved by stockholders of the
Company or the sale by the Company of any shares of Common Stock pursuant
to the exercise of any such options, or (B) the sale by the Company of any
shares of Common Stock pursuant to the exercise of any options or warrants
issued and outstanding on the date of closing of the sale of Common Stock
and Warrants pursuant to the IPO; or (C) the issuance or sale by the
Company of any shares of Common Stock in connection with any bona fide
merger, acquisition or other business combination; or
(iv) If the amount of said adjustment shall be less than five cents
($.05) per share of Common Stock; provided, however, such amount shall be
included in any subsequent adjustment.
(g) Dividends and Other Distributions with Respect to Outstanding
Securities. In the event that the Company shall at any time after the Closing
Date and prior to the exercise or expiration of all Warrants declare a dividend
(other than a dividend consisting solely of shares of
19
Common Stock or a cash dividend or distribution payable out of current or
retained earnings) or otherwise distribute to the holders of Common Stock any
monies, assets, property, rights, evidences of indebtedness, securities (other
than such a cash dividend or distribution or dividend consisting solely of
shares of Common Stock), whether issued by the Company or by another person or
entity, or any other thing of value, the Holders of the unexercised Warrants
shall thereafter be entitled, in addition to the shares of Common Stock or other
securities receivable upon the exercise thereof, to receive, upon the exercise
of such Warrants, the same monies, property, assets, rights, evidences of
indebtedness, securities or any other thing of value that they would have been
entitled to receive at the time of such dividend or distribution as if the
Holders were the owners of the shares of Common Stock underlying such Warrants.
At the time of any such dividend or distribution, the Company shall make
appropriate reserves to ensure the timely performance of the provisions of this
Section 9(g).
(h) Subscription of Common Stock or Other Securities. In case the Company
or an affiliate of the Company shall at anytime after the date hereof and prior
to the exercise of all the Warrants issue any rights to subscribe for shares of
Common Stock or any other securities of the Company or of such affiliate to all
the holders of Common Stock, the Holders of the unexercised Warrants shall be
entitled, in addition to the shares of Common Stock or other securities
receivable upon the exercise of the Warrants, to receive such rights at the time
such rights are distributed to the other stockholders of the Company but only to
the extent of the number of shares of Common Stock, if any, for which the
Warrants remain exercisable.
(i) Notice in Event of Dissolution. In case of the dissolution, liquidation
or winding-up of the Company, all rights under the Warrants shall terminate on a
date fixed by the
20
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to each registered holder of the Warrants, as the
same shall appear on the books of the Company maintained by the Warrant Agent,
by registered mail at least thirty (30) days prior to such termination date.
(j) Computations. The Company may retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section 9, and any certificate setting forth
such computation signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section 9.
Section 10. FRACTIONAL INTERESTS. The Warrants may only be exercised to
purchase full shares of Common Stock and the Company shall not be required to
issue fractions of shares of Common Stock on the exercise of Warrants. However,
if a Warrantholder exercises all Warrants then owned of record by him and such
exercise would result in the issuance of a fractional share, the Company will
deduct from the aggregate Exercise Price payable by such Warrantholder, in lieu
of the issuance of any fractional share otherwise issuable, the fractional
amount of the Exercise Price attributable to any fractional share. Such
deduction shall not affect the Exercise Fee pursuant to Section 5(a).
Section 11. NOTICES TO WARRANTHOLDERS.
(a) Upon any adjustment of the Exercise Price and the number of shares
of Common Stock issuable upon exercise of a Warrant, then and in each such
case, the Company shall give written notice thereof to the Warrant Agent,
which notice shall state the Exercise Price
21
resulting from such adjustment and the increase in the number of shares
purchasable at such price upon the exercise of a Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The Company shall also mail such notice to the
holders of the Warrants at their respective addresses appearing in the
Warrant register. Failure to give or mail such notice, or any defect
therein, shall not affect the validity of the adjustments.
(b) In case at any time after the Closing Date:
(i) the Company shall pay dividends payable in stock upon its
Common Stock or make any distribution (other than regular cash
dividends) to the holders of Common Stock; or
(ii) the Company shall offer for subscription pro rata to all of
the holders of Common Stock any additional shares of stock of any
class or other rights; or
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with, or sale of substantially all of its
assets to another corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then in any one or more of such cases, the Company shall give written
notice to the Warrant Agent and the holders of the Warrants in the manner set
forth in Section 11(a) of the date on which (A) a record shall be taken for such
dividend, distribution or subscription rights, or (B) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up shall take place, as the case may be. Such notice shall also specify
the date as of which the holders of Common Stock of record shall participate in
such dividend, distribution or
22
subscription rights, or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, as the case may be. Such notice shall be given at least ten (10)
days prior to the action in question and not less than ten (10) days prior to
the record date in respect thereof. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any of the matters set
forth in this Section 11(b).
(c) The Company shall cause copies of all financial statements and reports,
proxy statements and other documents that are sent to its stockholders to be
sent by an identical class of mail, postage prepaid, on the date of mailing to
such stockholders, to each registered holder of Warrants at his address
appearing in the Warrant register as of the record date for the determination of
the stockholders entitled to such documents.
Section 12. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS.
(a) The Warrant Agent shall promptly forward to the Company all monies
received by the Warrant Agent for the purchase of shares of Common Stock
through the exercise of these Warrants.
(b) The Warrant Agent shall keep copies of this Agreement available
for inspection by holders of Warrants during normal business hours.
Section 13. REDEMPTION OF WARRANTS. The Warrants, excluding the
Underwriter's Warrants and Warrants issuable thereunder, are redeemable by the
Company commencing on the first anniversary of the date of the Prospectus
included in the Registration Statement, in whole or in part, on not less than
thirty (30) days' prior written notice at a redemption price of $.10 per
Warrant, provided the closing bid quotation of the Common Stock
23
as reported on The NASDAQ SmallCap Market, if traded thereon, or if not traded
thereon, the closing sale price if listed on a national securities exchange or
the NASDAQ National Market (or other reporting system that provides last sale
prices), has been in excess of 150% of the Exercise Price for any 20 trading
days within a period of 30 consecutive trading days ending on the 15th day prior
to the date on which the Company gives notice of redemption. Any redemption in
part shall be made pro rata to all Warrant holders. The redemption notice shall
be mailed to the holders of the Warrants at their respective addresses appearing
in the Warrant register. Any such notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given on the date of mailing in
accordance with this Agreement whether or not the registered holder receives
such notice. 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 registered holder of a Warrant (i) to whom notice was not mailed
or (ii) whose notice was defective. An affidavit of the Warrant Agent or the
Secretary or Assistant Secretary of the Company that notice of redemption has
been mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein. Holders of the Warrants will have exercise rights until the
close of business on the day immediately preceding the date fixed for
redemption.
Section 14. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT. Any
corporation or company which may succeed to the corporate trust business of the
Warrant Agent by any merger or consolidation or otherwise shall be the successor
to the Warrant Agent hereunder without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 16 of this Agreement.
24
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 holders of
each Warrant.
In case at the time such successor to the Warrant Agent shall succeed to
the agency created by this Agreement any of the Warrants shall have been
countersigned but not delivered, any such successor to the Warrant Agent may
adopt the countersignature of the original Warrant Agent and deliver such
Warrants so countersigned.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and
deliver Warrants so countersigned. In all such cases such Warrants shall have
the full force provided in the Warrants and in this Agreement,
Section 15. DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements of fact and recitals contained herein and in the
Warrants shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except as
such describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrants except as herein expressly provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants in this Agreement or in the
Warrants to be complied with by the Company.
25
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
holder of any Warrant in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(d) Any notice, statement, instruction, resolution, waiver, consent,
order, certificate or demand of the Company shall be sufficiently evidenced
by an instrument signed by the Chairman of the Board of Directors, Chief
Executive Officer, President or any Vice-President, unless other evidence
in respect thereof is herein specifically prescribed. Any resolution of the
Board of Directors may be evidenced to the Warrant Agent by a copy thereof
certified by the Secretary of the Company. The Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant
for any action taken in reliance on any notice, statement, instruction,
resolution, waiver, consent, order, certificate, demand or other instrument
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for its
reasonable expenses, incurred by the Warrant Agent in the execution of this
Agreement and to indemnify the Warrant Agent and save it harmless against
any and all liabilities, including judgments, costs and reasonable counsel
fees, for anything done or omitted by the Warrant Agent in the execution of
this Agreement except as a result of the Warrant Agent's negligence,
willful misconduct or bad faith.
26
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expenses unless the Company or one or more registered holders of
Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or without
any such security or indemnity. All rights of action under this Agreement
or under any of the Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrants or the production thereof at any
trial or other proceeding. Any such action, suit or proceeding instituted
by the Warrant Agent shall be brought in its name as Warrant Agent, and any
recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrants, as their respective rights and interests may
appear.
(g) The Warrant Agent and any stockholder, director, officer, partner
or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to or otherwise act as fully and freely as
though it were not the Warrant Agent under this Agreement. Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent and its
duties shall be determined solely by the provisions hereof.
Section 16. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and be
discharged from its duties under this Agreement, except liabilities arising as a
result of the Warrant Agent's own gross negligence, wilful misconduct or bad
faith, by giving to the Company
27
notice in writing, and to the holders of the Warrants notice by mailing such
notice to the holders at their respective addresses appearing on the Warrant
register, of such resignation, specifying a date when such resignation shall
take effect. The Warrant Agent may be removed by like notice to the Warrant
Agent from the Company and the like mailing of notice to the holders of the
Warrants. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of action, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of
twenty (20) days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or after the Company has received such notice from a registered holder of a
Warrant (who shall, with such notice, submit his Warrant for inspection by the
Company), then the registered holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Any successor Warrant Agent, whether appointed by the Company or by such a
court, shall be a bank or trust company, in good standing, incorporated under
New York or federal law, having a capital and surplus, as shown by its last
published report to its stockholders, of not less than $10,000,000 or a stock
transfer company. After appointment, the successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibility as if it had been
originally named as Warrant Agent without further act or deed and the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent all
canceled Warrants, records and property at the time held by it hereunder, and
execute and deliver any further assurance or conveyance necessary for this
purpose. Failure to file or mail any notice provided for in this Section 16,
however, or any defect
28
therein, shall not affect the validity of the resignation or removal of the
Warrant Agent or the appointment of the successor Warrant Agent, as the case may
be.
Section 17. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment of
any transfer agent for the shares of Common Stock or of any subsequent transfer
agent for the shares of Common Stock, the Company will file with the Warrant
Agent a statement setting forth the name and address of such transfer agent.
Section 18. NOTICES. Any notice pursuant to this Agreement to be given by
the Warrant Agent or the registered holder of any Warrant to the Company, shall
be sufficiently given if sent by first-class mail, postage prepaid, or
facsimile, addressed (until another is filed in writing by the Company with the
Warrant Agent) as follows:
International Plastic Technologies, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Chief Executive Officer
Facsimile Number: (000) 000-0000
and a copy thereof to:
Xxxxxxx Xxxxxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
Any notice pursuant to this Agreement to be given by the Company or the
registered holder of any Warrant to the Warrant Agent shall be sufficiently
given if sent by first-class mail, postage prepaid, or facsimile, addressed
(until another address is filed in writing by the Warrant Agent with the
Company) as follows:
29
Continental Stock Transfer & Trust Company
0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile Number: (000) 000-0000
Any notice pursuant to this Agreement to be given by the Warrant Agent or
the Company to the Representative shall be sufficiently given if sent by
first-class mail, postage prepaid, or facsimile, addressed (until another
address is filed in writing with the Warrant Agent) as follows:
Network 1 Financial Securities, Inc.
The Galleria, Penthouse
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
and a copy thereof to:
Xxxxx Xxxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile Number: (000) 000-0000
Section 19. SUPPLEMENTS AND AMENDMENTS. The Company, the Warrant Agent and
the Representative may from time to time supplement or amend this Agreement in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions in regard to matters or questions arising
hereunder which the Company, the Warrant Agent and the Representative may deem
necessary or desirable and which shall not be inconsistent with the
30
provisions of the Warrants and which shall not materially adversely affect the
interest of the holders of Warrants; and in addition the Company, the Warrant
Agent and the Representative may modify, supplement or alter this Agreement with
the consent in writing of the registered holders of the Warrants representing
not less than a majority of the Warrants then outstanding.
Section 20. NEW YORK CONTRACT. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State of
New York and shall be construed in accordance with the laws of New York without
regard to the conflicts of law principles thereof.
Section 21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, the Representative and the registered holders of the Warrants any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrants.
Section 22. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors mid assigns hereunder.
Section 23. SEVERABILITY. Should any provision or portion of any provision
of this Agreement be invalidated for any reason, the validity of the remaining
provisions or of the other portion of the provision in question shall not be
affected thereby. This Agreement supersedes any prior letter, agreement or
understanding concerning the subject matter hereof.
31
Section 24. 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.
Section 25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
By:______________________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
By:______________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
NETWORK 1 FINANCIAL SECURITIES, INC.
By:______________________________________
Name: Xxxxxxx X. Xxxx
Title: President
32
No. W _________ VOID AFTER _______, 2003
______ WARRANTS
REDEEMABLE COMMON STOCK PURCHASE WARRANT
CERTIFICATE TO PURCHASE ONE SHARE OF COMMON STOCK
INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
EXERCISABLE FROM ___________, 1999
UNTIL 5:00 P.M. (EST) _________, 2003
CUSIP 46017R 11 2
THIS WARRANT CERTIFICATE CERTIFIES THAT, FOR VALUE RECEIVED
___________ or registered assigns (the "Registered Holder") is the owner of
the number of Redeemable Common Stock Purchase Warrants (the "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 fully paid and nonassessable
share of Common Stock, $.001 par value (the "Common Stock"), of International
Plastic Technologies, Inc., a Delaware corporation (the "Company"), at any time
from _______, 1999 (the "Initial Warrant Exercise Date") and prior to the
Expiration Date (as hereinafter defined) upon the presentation and surrender of
this Warrant Certificate with the Exercise Form on the reverse hereof duly
executed, at the corporate office of Continental Stock Transfer & Trust Company,
0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Warrant Agent, or its successor (the
"Warrant Agent"), accompanied by payment of $5.00, subject to adjustment (the
"Exercise Price"), in lawful money of the United States of America in cash or by
certified or bank 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, dated as of _______, 1998, among the Company,
Network 1 Financial Securities, Inc. (the "Representative") and the Warrant
Agent (the "Warrant Agreement").
In the event of certain contingencies provided for in the Warrant
Agreement, the Exercise Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares will be issued. In the 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. (New York City time) on
________, 2003; provided, that if such date is not a business day, it shall mean
5:00 p.m., New York City time, on the next following business day. For purposes
hereof, the term "business day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in New York City, New York, are
authorized or obligated by law to be closed.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of the Warrants represented hereby unless at the time of exercise
the Company has filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended (the "Act"), covering the
securities issuable upon exercise of the Warrants represented hereby and such
registration statement has been declared and shall remain effective and shall be
current, and such securities have been registered or qualified or be exempt
under the securities laws of the state or other jurisdiction of residence of the
Registered Holder and the exercise of the Warrants represented hereby in any
such state or other jurisdiction shall not otherwise be unlawful.
This 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 the presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto for registration of
transfer of this Warrant Certificate at such office, 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, as such, 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 provided in the Warrant
Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $.10 per
Warrant, at any time commencing _______, 1999, provided that the closing bid
quotations of the Common Stock as reported on The NASDAQ SmallCap Market or the
Boston Stock Exchange, if traded thereon, or if not traded thereon, the closing
sale price if listed on a national or regional securities exchange (or other
reporting system that provides last sale prices), shall have for a period of any
20 trading
2
days within a period of 30 consecutive trading days ending on the 15th day prior
to the date on which the Company gives the Notice of Redemption (as defined
below) exceeds 150% of the then Exercise Price, subject to the right of the
Registered Holder to exercise such Warrants prior to redemption. Notice of
redemption (the "Notice of Redemption") shall be given by the Company no less
than 30 days 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 right with respect to this Warrant except to receive the
$.10 per Warrant upon surrender of this Certificate.
Under certain circumstances described in the Warrant Agreement, the
Representative shall be entitled to receive as a solicitation fee an aggregate
of 5% of the Exercise Price of the Warrants represented hereby.
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, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without regard to the conflicts of law
principles thereof.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
3
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.
Dated July 30, 1997
SEAL INTERNATIONAL PLASTIC TECHNOLOGIES, INC.
By: _____________________________________
Xxxxxx Xxxxxxxx
Chief Executive Officer
By: _____________________________________
Xxxxx Xxxxxxx
Secretary
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY,
as Warrant Agent
By:____________________________________
Authorized Officer
4
EXERCISE FORM
To Be Executed by the Registered Holder
in order to Exercise Warrant
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 name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
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(please print or type name and address)
and be delivered to
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(please print or type name and address)
and if such number of exercised 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.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. If the exercise of this Warrant was solicited by Network 1 Financial
Securities, Inc., please check the following box. |_|
2. The exercise of this Warrant was solicited by
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3. If the exercise of this Warrant was not solicited, please check the
following box. |_|
Dated: X
------------------------- _____________________________
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Address
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Social Security or Taxpayer
Identification Number
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Signature Guaranteed
2
ASSIGNMENT
To be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, __________________, hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
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(please print or type name and address)
______________________ of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitutes and appoints ________________________________
as its/his/her attorney-in-fact to transfer this Warrant Certificate on the
books of the Company, with full power of substitution in the premises.
Dated: ___________________________ x___________________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE EXERCISE 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 BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER
ENTITY WHICH IS A MEMBER IN GOOD STANDING OF THE SECURITIES TRANSFER AGENTS
MEDALLION PROGRAM.
