THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT MADE UNDER THE
SECURITIES ACT OF 1933 /THE "ACT") OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT.
PPA TECHNOLOGIES, INC.
UNDERWRITER'S WARRANT
PPA Technologies, Inc., a New Jersey corporation (the "Company"),
hereby certifies that, for an aggregate consideration of $ , (" ") is entitled,
subject to the terms set forth below, at any time or from time to time but not
earlier than twelve (12) months nor later than five (5) years from , 1998 (the
"Issue Date"), to purchase from the Company
, ( ) Units, each such Unit consisting of one share of Common Stock
(no par value) of the Company and one redeemable common stock purchase warrant,
exercisable into one share of Common Stock per warrant for a period of one year
from the date of the purchase from the Company of the Unit at the purchase price
per Unit of Seven Dollars ($7.20) (equal to 120% of the public offering price
per Unit) (the purchase price per unit, as adjusted from time to time pursuant
to the provisions hereunder set forth, being referred to herein as the "Exercise
Price") , all as described in the prospectus contained in the Company's
Registration Statement on Form SB-2 (File No. ) , as amended, which Registration
Statement was originally filed with the Securities and Exchange Commission on
, 1997 (the "Registration Statement"). The Issue Date shall be
the same date as the closing date of the public offering. Except as set forth
herein, the Units issuable upon exercise of this Underwriter's Warrant have the
same respective terms as the Units offered by the Registration Statement. This
Underwriter's Warrant and all rights hereunder, to the extent such rights shall
not have been exercised, shall terminate and become null and void to the extent
the holder fails to exercise any portion of this Underwriter's Warrant prior to
5:00 p.m., New Jersey time, on , 2003, or if the Transfer Agent (as defined in
Section 4 below) shall not regularly be open for business on that day, then on
the next such business day.
1. Registration.
a. The Company agrees for a period of four years commencing one year
after the Issue Date, that if during such four-year period, no current
registration statement by the Company is on file with the U.S. Securities and
Exchange Commission covering the securities underlying this Underwriter's
Warrant, upon receipt of a demand for registration in the form of a written
request from the holder of this Underwriter's Warrant or a majority of the
securities issued or issuable hereunder, it will prepare and file under the Act
one registration statement or Notification on Form 1-A, if then required, to
permit a public offering of this Underwriter's Warrant and the securities then
underlying this Underwriter's Warrant, and will use its best efforts to cause
such registration statement or notification to become effective at the earliest
possible date and to remain effective for a period not to exceed 90 days. The
Company will bear the cost of such registration statement, including but not
limited to counsel fees of the Company and disbursements, accountants' fees and
printing costs, if any, but excluding the fees of counsel and others hired by
the holder. The foregoing demand registration right by the Underwriter at the
expense of the Company shall be on a one-time request basis only.
b. Additionally, whenever during the four-year period commencing one year
after the Issue Date the Company or any successor proposes to file a
Notification on Form 1-A under the Act or a registration statement relating to a
public offering of its equity securities under the Act (whether for its own
benefit or for the holders of any of its equity securities or otherwise), but
not including a registration on Form S-8, it shall offer, upon 30 days' written
notice to the holder of this Underwriter's Warrant or the holders of the
underlying securities (the "Holders"), to include and shall include, at the
Holders' option(s), all or any portion of this Underwriter's Warrant and the
securities underlying this Underwriter's Warrant in such registration statement
at the expense of the Company, limited in the case of a Regulation A Offering to
the amount of the available exemption.
c. In connection with any registration statement or Notification on Form 1-A
pursuant to subsection a or b of this Section 1, the Company agrees that it will
furnish to you the representations and warranties and opinions of counsel to the
same effect as provided in Sections 1 and 5(b) of the Underwriting Agreement
entered into by the parties hereto on , 1997 (the "Underwriting Agreement"), to
the extent then applicable, except that such representations, warranties, and
opinions shall relate to the registration statement or Notification on Form 1-A
and to the securities which shall be offered thereby. The Company and you
further agree that as to such registration statement or Notification on Form
1-A, the provisions of Section 3 (but not including subsections (l), (m) or (n))
of the Underwriting Agreement, shall apply. The Company and you further agree
that the provisions of section 8 of the Underwriting Agreement shall apply, with
the holder having the rights and obligations afforded the Underwriter in that
section, and that such section shall apply with respect to that offering.
2. Exercise of Warrant.
a. This Underwriter's Warrant may be exercised in full or from time to time in
part by the Holder by surrendering it, with the form of subscription at the end
hereof duly executed by such holder, to the Company's transfer agent accompanied
by payment in full, in cash or by certified or official bank check, of the
Exercise Price payable in respect of all or part of this Underwriter's Warrant
being exercised.
b. Upon such surrender of this Underwriter's Warrant and payment of such
Exercise Price, the Company shall issue and cause to be delivered to or upon the
written order of the holder of this Underwriter's Warrant and in such name or
names as the Holder may designate a certificate or certificates for the number
of full Units so purchased, together with cash, as provided in Section 3 hereof,
in respect of any fractional Units otherwise issuable upon such surrender. 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 Units as of the date of surrender of this Underwriter's Warrant
and payment of such Exercise Price notwithstanding that the certificate or
certificates representing such Units shall not actually have been delivered or
that the stock transfer books of the Company shall then be closed.
c. If less than the entire Underwriter's Warrant is exercised, the company
shall, upon such exercise, execute and deliver to the holder thereof a new
warrant in the same form as this Underwriter's Warrant evidencing that
Underwriter's Warrant to the extent not exercised.
d. The Company shall, at the time of any exercise of all or part of this
Underwriter's Warrant, upon the request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such Holders shall continue to be entitled after such exercise in accordance
with the provisions of this Underwriter's Warrant, provided that if the holder
of this Underwriter's Warrant shall fail to make any such request, such failure
shall not affect the continuing obligations of the Company to afford to such
Holder any such rights.
3. Fractional units. No fractional securities or scrip representing fractional
securities shall be issued upon the exercise of this Underwriter's Warrant. With
respect to any fraction of a Unit called upon any such exercise hereof, the
Company shall pay to the holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional securities, determined
as follows:
a. If the security is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange, the current value shall be the
last reported sale price of the security on such exchange on the last business
day prior to the date of exercise of this Underwriter's Warrant, or if no such
sale is made on such day, the average closing bid and asked prices for such day
on such exchange; or
b. If the security is not listed or admitted to unlisted trading privileges,
the current value shall be the last reported sale price or the mean of the last
reported bid and asked prices reported by the National Association of Securities
Dealers Automated Quotation System (or, if not so quoted on NASDAQ, by the
National Quotation Bureau, Inc.) on the last business day prior to the date of
the exercise of this Underwriter's Warrant; or
c. If the security is not so listed or admitted to unlisted trading privileges
and prices are not reported on NASDAQ, the current value shall be an amount, not
less than the book value, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
4. Exchange, Assignment, or Loss of Warrant.
a. This Underwriter's Warrant is exchangeable, without expense, at the option
of the Holder, upon presentation and surrender hereof to the transfer agent for
other Underwriter's Warrants of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of securities purchased
hereunder. This Underwriter's Warrant is restricted from sale, transfer,
assignment, or hypothecation except to the officers, principals and successors
of Kenneth Jerome & Co., Inc., and may be exercised in whole or in part at any
time and from time to time during the four (4) year period following the
expiration of one (1) year from the Issue Date. Any such assignment shall be
made by surrender of this Underwriter's Warrant to American Stock Transfer and
Registrar Co., Inc. or any successor transfer agent designated by the Company in
writing (the "Transfer Agent") with the Form of Assignment annexed hereto duly
executed and funds sufficient to pay any transfer tax, whereupon the Transfer
Agent shall, without charge, cause to be executed and delivered a new
Underwriter's Warrant in the name of the assignee named in such instrument or
assignment and this Underwriter's Warrant shall promptly be canceled. This
Underwriter's Warrant may be divided or combined with other Underwriter's
Warrants that carry the same rights upon presentation hereof to the office of
the Transfer Agent together with a written notice specifying the name and
denomination in which new Underwriter's Warrants are to be issued and signed by
the holder hereof. The term "Underwriter's Warrant" as used in this Warrant
includes any Underwriter's Warrants issued in substitution for or replacement of
this Underwriter's Warrant, or into which this Underwriter's Warrant may be
divided or exchanged.
b. Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Underwriter's Warrant, and, in the case
of loss, theft or destruction of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Underwriter's Warrant, if mutilated, the
Transfer Agent will cause to be executed and delivered a new Underwriter's
Warrant of like tenor and date. Any such new Underwriter's Warrant executed and
delivered shall constitute an additional contractual obligation on the part of
the Company, whether or not this Underwriter's Warrant so lost, stolen,
destroyed, or mutilate
5. Rights of the Holder. The Holder of this Underwriter's Warrant shall not, by
virtue hereof, be entitled to any rights of a stockholder in the Company, either
at law or equity, and the rights of the holder are limited to those expressed in
this Underwriter's Warrant.
6. Adjustments.
a. In case the Company shall, while this Underwriter's Warrant remains in
force, effect a recapitalization of such character that the securities covered
hereby shall be changed into or become exchangeable for a larger or smaller
number of such securities, then thereafter, the number of securities of the
Company which the holder of this Underwriter's Warrant shall be entitled to
purchase hereunder, shall be increased or decreased, as the case may be, in
direct proportion to the increase or decrease in the number of shares of the
Company, by reason of such recapitalization, and the purchase price hereunder,
per Unit, shall in the case of an increase in the number of shares be
proportionately reduced, and in the case of a decrease in the number of share be
proportionately increased.
b. In case the Company shall, at any time prior to the
exercise of an Underwriter's Warrant, consolidate or merge with, or shall
transfer its property as an entirety to, or substantially as an entirety to, any
other corporation, the Holder of an Underwriter's Warrant who thereafter
exercises the same as herein provided shall be entitled to receive, for the
purchase price per Unit stated in this Underwriter's Warrant, that number of
shares or other securities or property of the corporation resulting from such
consolidation or merger or transfer to which each Unit deliverable upon exercise
of this Underwriter's Warrant would have been entitled, upon such consolidation
or merger or transfer, had the holder of such Underwriter's Warrant exercised
his right to purchase Units, and had such holder exercised the redeemable common
stock purchase warrant comprising a part of the Unit, and had said shares or
other securities been issued and outstanding, and had such holder been the
holder of record of such shares or other securities at the time of such
consolidation or merger or transfer.
c. In case the Company shall at any time prior to the exercise of an
Underwriter's Warrant make any distribution of its assets to holders of its
Common Stock by liquidating or partial liquidating dividend or by way of return
of capital, or other than as a dividend payable out of earnings or any surplus
legally available for dividends under the laws of the State of New Jersey, then
the Holder of an Underwriter's Warrant who thereafter exercises the same as
herein provided and the redeemable common stock purchase warrant comprising a
part of the Unit as therein provided after the date of record for the
determination of those Holders of Common Stock entitled to such distribution of
assets, shall be entitled to receive for the purchase price, in addition to each
Share, the amount of such assets (or at the option of the Company a sum equal to
the value thereof at the time of such distribution to holders of Common Stock as
such value is determined by the Board of Directors of the Company in good faith)
which would have been payable to such Holder had he been the holder of record of
such share receivable upon exercise of such Underwriter's Warrant and redeemable
common stock purchase warrant on the record date for the determination of those
entitled to such distribution.
d. In case of the dissolution, liquidation or winding-up of the Company, all
rights under this Underwriter's Warrant and the redeemable common stock purchase
warrants shall terminate on a date fixed by the Company, such date so fixed to
be not earlier than the date of the commencement of the proceedings for such
dissolution, liquidation or winding-up and not later than thirty days after such
commencement date. In any such case of termination of purchase rights the
Company shall give notice of such termination date to the registered holder of
this Underwriter's Warrant.
e. Upon any adjustment of the purchase price and/or any increase or decrease
in the number of securities purchasable upon the exercise of this Underwriters
Warrant or the redeemable common stock purchase warrant comprising a part of the
Unit, then, and in each case, the company, within 30 days thereafter, shall give
written notice thereof to the registered holder of this Underwriter's Warrant,
which notice shall state the adjusted purchase price and/or the increased or
decreased number of securities purchasable upon the exercise of this
Underwriter's Warrant or the redeemable common stock purchase warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.
7. Notices of Record Dates, Etc. Upon the occurrence of any of the events listed
in subsections a to c below, the Company shall mail or cause to be mailed (on
the same date as the company informs its stockholders of such event) to the
Holder of this Underwriter's Warrant a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which a record is to be taken for the
purpose of voting on or approving such reorganization, recapitalization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding up and the date on which such event is to take place and the time, if
any is to be fixed, as of which the holder of record of Common Stock (or any
other securities at the time deliverable on exercise of this Underwriter's
Warrant) shall be entitled to exchange its shares of Common Stock (or such other
securities) for securities or other property deliverable on such reorganization,
recapitalization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
a. The Company shall fix a record date of the holders of Common Stock (or
other securities at the time deliverable on exercise of this Underwriter's
Warrant) for the purpose of entitling or enabling them to receive any dividends
or other distribution, or to receive any right to subscribe for or purchase any
shares of any class or any securities, or to receive any other right
contemplated by section 6 or otherwise; or
b. Any reorganization or recapitalization of the Company, any reclassification
of the Capital stock of the Company, any consolidation or merger of the Company
with or into another corporation or any transfer of all or substantially all of
the assets of the Company to another entity; or
c. The voluntary or involuntary dissolution, liquidation or
winding up of the Company.
8. Reservation of the Units and Shares. The Company shall at all times reserve,
and the Transfer Agent shall be irrevocably authorized and directed at all times
to reserve, for the purpose of issuance on exercise of this Underwriter's
Warrant, such number of authorized Units and authorized shares of Common Stock
or such class or classes of capital stock or other securities as shall from time
to time be sufficient to comply with this Underwriter's Warrant, and the Company
shall promptly take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized and unissued Units and authorized and
unissued shares of Common Stock or such other class or classes of capital stock
or other securities to such number as shall be sufficient for that purpose. The
Company shall keep a copy of this Underwriter's Warrant on file with the
Transfer Agent. The Company shall supply the Transfer Agent with duly executed
stock and other certificates, as appropriate, for such purpose and shall provide
or otherwise make available any cash which may be payable as provided in section
3 hereof.
9. Approvals. The Company shall from time to time use its best efforts to obtain
and continue in effect any and all permits, consents, registrations,
qualifications and approvals of governmental agencies and authorities and to
make all filings under applicable securities laws that may be or become
necessary in connection with the issuance, sale, transfer and delivery of this
Underwriter's Warrant and the issuance of securities on any exercise hereof, and
if any such permits, consent, qualifications, registrations, approvals or
filings are not obtained or continued in effect as required, the Company shall
immediately notify the holder thereof. Nothing contained in this Section 9 shall
in any way expand, alter or limit the rights of the holder set forth in Section
1 hereof.
10. Survival. All agreements, covenants, representations and warranties herein
shall survive the execution and delivery of this Underwriter's Warrant and any
investigation at any time made by or on behalf of any parties hereto and the
exercise, sale and purchase of this Underwriter's Warrant (and any other
securities or property) issuable on exercise hereof.
11. Remedies. The company agrees that the remedies at law of the Holder of this
Underwriters Warrant, in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Underwriter's Warrant, are not adequate and such terms may, in addition to and
not in lieu of any other remedy, be specifically enforced by a decree of
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
12. Notices. All demands, notices, consents and other communications to be given
hereunder shall be in writing and shall be deemed duly given when delivered
personally or by telecopier or five days after being mailed by first class mail,
postage prepaid, properly addressed, if to the holder of this Underwriter's
Warrant, to Kenneth Jerome & Co., Inc., 247 Columbia Turnpike, Florham Park, New
Jersey 07932 (201) 966-6669 Fax:(201) 966-6319 Attention: Mr. Robert Kaplon,
with a copy to Steven I. Gutstein, Esq., 276 Fifth Avenue, New York, New York
10001 (212) 725-7110 Fax: (212) 725-7527; if to the Company, to PPA
Technologies, Inc., 163 South Street, Hackensack, New Jersey 07601 Attention:
Gerald Sugerman, with a copy to: Roger Fidler, Esq., 400 Grove Street, Glen
Rock, New Jersey 07452 (201) 457-1221 Fax: (201)457-1331. The Company and each
Holder may change such address at any time or times by notice hereunder to the
other.
13. Amendments; Waivers; Terminations; Governing Law; Headings. This
Underwriter's Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Underwriter's Warrant and any disputes arising hereunder shall be governed by
and construed and interpreted in accordance with the laws of the State of New
Jersey. The headings in this Underwriter's Warrant are for convenience of
reference only and are not part of this Underwriter's Warrant.
14. Payment of Taxes. The Company shall pay all taxes, if any, attributable to
the initial issuance of this Underwriter's Warrant and the Units and the
securities comprising the Units; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any secondary
transfer of this Underwriter's Warrant on the Units.
DATED: November 10, 1997
PPA TECHNOLOGIES, INC., a
New Jersey corporation
(CORPORATE SEAL)
By:
Roger Fidler
President
ATTEST:
By:
Corporate Secretary
FORM OF ASSIGNMENT
(To be executed upon transfer of Warrant)
FOR VALUE RECEIVED, hereby
sells, assigns and transfers to the within Underwriter's Warrant together with
all rights, title and interest therein, and does hereby irrevocably constitute
and appoint attorney to transfer such Underwriter's Warrant on the warrant
register of the within named Company, with full power of substitution.
Signature:
Dated:
Signature Guarantee:
SUBSCRIPTION
(To be completed and signed only upon an exercise of
the Underwriter's Warrant in whole or in part)
To:
as Transfer Agent for PPA Technologies, Inc.
The undersigned, the Holder of the attached Underwriter's Warrant, hereby
irrevocably elects to exercise the purchase right represented by the
Underwriter's Warrant for, and to purchase thereunder, Units (as such terms are
defined in the original Underwriter's Warrant dated , 1997, from PPA
Technologies, Inc.), and herewith makes payment of $ therefor in cash or by
certified or official bank check. The undersigned hereby requests that the
Certificate(s) for such securities be issued in the name(s) and delivered to the
address(es) as follows:
Name:
Address:
Deliver to:
Address:
(Attach additional sheets as necessary)
If the foregoing Subscription evidences an exercise of the Underwriter's
Warrant to purchase fewer than all of the Units (or other securities or
property) to which the undersigned is entitled under such Underwriter's Warrant,
please issue a new Underwriter's Warrant, of like tenor, for the remaining Units
(or other securities or property) in the name(s), and deliver the same to the
address(es), as follows:
Name:
Address:
(Attach additional sheets as necessary)
DATED:
(Name of Holder)
(Signature of Holder or Authorized Signatory)
(Social Security or Taxpayer Identification Number of
Holder)