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 ($7.25)
(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: , 1997
PPA
TECHNOLOGIES, INC., a
New Jersey
corporation
(CORPORATE SEAL)
By:
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)
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