SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
EPL Technologies, Inc.
(Name of Issuer)
Common Stock, $ .001 par value
(Title of Class of Securities)
268920204000
(CUSIP Number)
Ely D. Tendler, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
December 6 , 1999
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Page 1 of 13 pages
Exhibit Index appears on page 11
<PAGE>
SCHEDULE 13D
CUSIP No. 268920204000 Page 2 of 13 Pages
- -------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
G.M.H., INC. 13-3104199
- -------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) SEE ITEM 5
- -------------------------------------------------------------------------------
3) SEC USE ONLY
- -------------------------------------------------------------------------------
4) SOURCE OF FUNDS
WC
- -------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
- -------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
- -------------------------------------------------------------------------------
NEW YORK
NUMBER 7) SOLE VOTING POWER
OF 4,370,487.5 (See Item 5)
SHARES ---------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY (See Item 5)
EACH ---------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 4,370,487.5 (See Item 5)
WITH ---------------------------------------------------
10) SHARED DISPOSITIVE POWER
(See Item 5)
- -------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(See Item 5)
- -------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (See Item 5)
- -------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE 13D
CUSIP No. 268920204000 Page 3 of 13 Pages
- -------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
JOSEPH GIAMANCO
- -------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) SEE ITEM 5
- -------------------------------------------------------------------------------
3) SEC USE ONLY
- -------------------------------------------------------------------------------
4) SOURCE OF FUNDS
PF
- -------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
- -------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- -------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 3,227,412.5 (See Item 5)
SHARES -----------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY (See Item 5)
EACH -----------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 3,227,412.5 (See Item 5)
WITH -----------------------------------------------------
10) SHARED DISPOSITIVE POWER
(See Item 5)
- -------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(See Item 5)
- -------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (See Item 5)
- -------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE 13D
CUSIP No. 268920204000 Page 3 of 13 Pages
- -------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
- -------------------------------------------------------------------------------
RONALD J. MENELLO
- -------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) SEE ITEM 5
- -------------------------------------------------------------------------------
3) SEC USE ONLY
- -------------------------------------------------------------------------------
4) SOURCE OF FUNDS
PF
- -------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
- -------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- -------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 20,000
SHARES ------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY (See Item 5)
EACH ------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 20,000
WITH ------------------------------------------------------
10) SHARED DISPOSITIVE POWER
(See Item 5)
- -------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(See Item 5)
- -------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (See Item 5)
- -------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
4
<PAGE>
SCHEDULE 13D
CUSIP No. 268920204000 Page 3 of 13 Pages
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
GARY A. HERMAN
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) SEE ITEM 5
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS
PF
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
NUMBER 7) SOLE VOTING POWER
OF 15,000
SHARES
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY (See Item 5)
EACH
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 15,000
WITH
10) SHARED DISPOSITIVE POWER
(See Item 5)
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(See Item 5)
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (See Item 5)
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
5
<PAGE>
Schedule 13D
Item 1. Security and Issuer.
This Statement on Schedule 13D (the "Statement") relates to
the Common Stock, $.001 par value (the "Common Stock"), of EPL Technologies,
Inc., a Colorado corporation (the "Company"). The principal executive offices of
the Company are located at 2 International Plaza, Suite 245, Philadelphia,
Pennsylvania, 19113-1507.
Item 2. Identity and Background.
(a) - (c) This Statement is being filed by G.H.M., Inc.,
("G.H.M."), Joseph Giamanco, Ronald J. Menello and Gary A. Herman. G.H.M.,
Joseph Giamanco, Ronald J. Menello, and Gary A. Herman are collectively referred
to as the "Reporting Persons."
G.H.M. is a New York corporation engaged in certain investment
activities, including, but not limited to, (i) the purchase of marketable and
non-marketable securities and other obligations of bankrupt or near bankrupt
companies, (ii) risk-arbitrage transactions undertaken in connection with, among
other things, mergers and acquisitions and (iii) the purchase of securities in
entities which appear to be undervalued.
Joseph Giamanco holds a 52% ownership interest in G.H.M. and
is the President and CEO of G.H.M. Ronald Menello holds a 24% ownership interest
in G.H.M. and is the Senior Vice President of G.H.M. Gary A. Herman holds a 24%
ownership interest in G.H.M. and is the Senior Vice President of G.H.M.
The business address and the address of the principal
executive office of G.H.M. is 74 Trinity Place, New York, New York 10006. The
business address of Joseph Giamanco, Ronald J. Menello and Gary A. Herman is c/o
G.H.M., Inc., 74 Trinity Place, New York, New York 10006.
The name, business address and present principal occupation or
employment of each of the executive officers and directors of G.H.M., including
Joseph Giamanco, Ronald J. Menello and Gary A. Herman are set forth on Schedule
I annexed hereto, which is incorporated herein by reference.
(d) - (e) During the last five years, none of the Reporting
Persons, and, to the best knowledge of the Reporting Persons, none of the
persons listed on Schedule I hereto, has been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any violation
with respect to such laws.
(f) Each natural person identified in this Item 2 is a citizen
of the United States.
6
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
The shares of Common Stock reported to be owned by G.H.M., and
Joseph Giamanco were acquired in the open market and pursuant to the
Subscription Agreements (the "Subscription Agreements") dated December 3, 1999,
between G.H.M. and Joseph Giamanco, respectively, and EPL Technologies, Inc.,
pursuant to the Securities Purchase Agreements (the "Securities Purchase
Agreements"), dated December 9, 1999, between G.H.M. and Joseph Giamanco,
respectively, and Halifax Fund, L.P., an unaffiliated third party, pursuant to
the Securities Conversion Agreements (the "Securities Conversion Agreements"),
dated December 9, 1999, between G.H.M. and Joseph Giamanco, respectively, and
EPL Technologies, Inc., and pursuant to the Warrant Agreements (the "Warrant
Agreements"), dated December 9, 1999, between G.H.M. and Giamanco, respectively,
and EPL Technologies, Inc. The shares of Common Stock reported to be owned by
Ronald J. Menello and Gary A. Herman were acquired in the open market. The total
cost of the reported shares by G.H.M., Joseph Giamanco, Ronald J. Menello and
Gary Herman was $2,412,625, $2,853,074, $49,930 and $147,194, respectively. Such
costs were funded out of personal funds (and in the case of G.H.M., Inc.,
working capital), which may, at any given time, include margin loans made by
brokerage firms in the ordinary course of business.
Item 4. Purpose of Transaction.
The Reporting Persons acquired beneficial ownership of the
shares of Common Stock to which this Statement relates for investment.
The Reporting Persons may acquire additional shares of Common
Stock or other securities of the Company or sell or otherwise dispose of any or
all of the shares of Common Stock or other securities of the Company
beneficially owned by them. The Reporting Persons may take any other action with
respect to the Company or any of its debt or equity securities in any manner
permitted by law.
Except as disclosed in this Item 4, the Reporting Persons have
no current plans or proposals which relate to or would result in any of the
events described in Items (a) through (j) of the instructions to Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Persons beneficially own an aggregate of
7,632,900 shares of Common Stock, representing approximately 26.71% of the
Common Stock outstanding. G.H.M. owns 4,370,487.5 of such shares, representing
approximately 15.29% of the Common Stock outstanding, which number of shares
includes immediately exercisable five-year warrants to purchase 1,000,000 shares
at an exercise price of $0.5170 per share. Joseph Giamanco owns 3,227,412.5 of
such shares, representing approximately 11.29% of the Common Stock outstanding,
which number of shares includes immediately exercisable five-year warrants to
purchase 1,000,000 shares at an exercise price of $0.5170 per share. Ronald J.
Menello owns 20,000 of such shares, representing approximately 0.07% of the
Common Stock outstanding.
7
<PAGE>
Gary A. Herman owns 15,000 of such shares, representing approximately 0.05% of
the Common Stock outstanding.
(b) By reason of his position as president and chief executive
officer of G.H.M., and his 52% ownership interest in G.H.M., Joseph Giamanco may
be deemed to possess the power to vote and dispose of the shares of Common Stock
beneficially owned by G.H.M. By reason of his position as senior vice president
of G.H.M, and his 24% ownership interest in G.H.M., Ronald J. Menello may be
deemed to possess the power to vote and dispose of the shares of Common Stock
beneficially owned by G.H.M. By reason of his position as senior vice president
of G.H.M. and his 24% ownership interest in G.H.M., Gary A. Herman may be deemed
to possess the power to vote and dispose of the shares of Common Stock
beneficially owned by G.H.M. Pursuant to Rule 13d-4 promulgated under the
Securities Exchange Act of 1934, as amended, (i) G.H.M., Inc., disclaims
beneficial ownership of all shares of Common Stock beneficially owned by Joseph
Giamanco, Ronald J. Menello and Gary A. Herman, (ii) Joseph Giamanco disclaims
beneficial ownership of all shares of Common Stock beneficially owned by Ronald
J. Menello, Gary A. Herman, and G.H.M., except to the extent of Mr. Giamanco's
actual economic interest in G.H.M., (iii) Ronald J. Menello disclaims beneficial
ownership of all shares of Common Stock beneficially owned by Joseph Giamanco,
Gary A. Herman and G.H.M., except to the extent of Mr. Menello's actual economic
interest in G.H.M., and (iv) Gary A. Herman disclaims beneficial ownership of
all shares of Common Stock beneficially owned by Joseph Giamanco, Ronald J.
Menello and G.H.M., except to the extent of Mr. Herman's actual economic
interest in G.H.M.
(c) Except for the transactions set forth on Schedule II
annexed hereto, none of the persons identified in Item 2 has effected any
transactions in the Common Stock during the past 60 days. Such transactions were
effected in the open market, pursuant to the Subscription Agreements, dated
December 3, 1999, pursuant to the Securities Purchase Agreements, dated December
9, 1999, pursuant to the Securities Conversion Agreements, dated December 9,
1999, and pursuant to the Warrant Agreements, dated December 9, 1999.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
In connection with the Subscription Agreements, Securities
Purchase Agreements, Securities Conversion Agreements and Warrant
Agreements, each of G.H.M. and Mr. Giamanco have been granted certain
registration and other rights as more fully set forth in the forms of
such agreements attached hereto as Exhibits.
In addition, pursuant to the Warrant Agreements, each of
G.H.M. and Mr. Giamanco hold immediately exercisable five-year warrants
to purchase 1,000,000 shares of EPL Technologies Common Stock at an
exercise price of $0.5170 per share, and other rights as more fully set
forth in the forms of such agreements attached hereto as Exhibits.
8
<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Agreement of joint filing pursuant to Rule 13d-1(f)
promulgated under the Securities Exchange Act of 1934, as
amended.
Exhibit 2 Subscription Agreement, dated December 3, 1999, between G.H.M.,
Inc., and EPL Technologies, Inc.
Exhibit 3 Subscription Agreement, dated December 3, 1999, between Joseph
Giamanco and EPL Technologies, Inc.
Exhibit 4 Letter of Understanding, dated as of December 3, 1999, among
EPL Technologies, Inc., G.H.M., Inc., and Joseph Giamanco.
Exhibit 5 Securities Purchase Agreement, dated December 9, 1999, between
G.H.M., Inc., and Halifax Fund, L.P.
Exhibit 6 Securities Purchase Agreement, dated December 9, 1999, between
Joseph Giamanco and Halifax Fund, L.P.
Exhibit 7 Securities Conversion Agreement, dated December 9, 1999,
between G.H.M., Inc., and EPL Technologies, Inc.
Exhibit 8 Securities Conversion Agreement, dated December 9, 1999,
between Joseph Giamanco and EPL Technologies, Inc.
Exhibit 9 Warrant Agreement, dated December 9, 1999, between G.H.M.,
Inc., and EPL Technologies, Inc.
Exhibit 10 Warrant Agreement, dated December 9, 1999, between Joseph
Giamanco and EPL Technologies, Inc.
Exhibit 11 Warrant Agreement (for additional warrants), dated December 9,
1999, between G.H.M., Inc., and EPL Technologies, Inc.
Exhibit 12 Warrant Agreement (for additional warrants), dated December 9,
1999, between Joseph Giamanco and EPL Technologies, Inc.
9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this Statement is true, complete and correct.
Date: December 16, 1999
G.H.M., INC.
By: Joseph Giamanco, as President of
G.H.M., Inc.
/s/ Joseph Giamanco
Name: Joseph Giamanco
Joseph Giamanco
/s/ Joseph Giamanco
Name: Joseph Giamanco
Ronald J. Menello
/s/ Ronald J. Menello
Name: Ronald J. Menello
Gary A. Herman
/s/ Gary A. Herman
Name: Gary A. Herman
10
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
1 Agreement of joint filing pursuant to Rule 13d-1(f)
promulgated under the Securities Exchange Act of 1934, as
amended
2 Subscription Agreement, dated December 3, 1999, between
G.H.M., Inc., and EPL Technologies, Inc.
3 Subscription Agreement, dated December 3, 1999, between
Joseph Giamanco and EPL Technologies, Inc.
4 Letter of Understanding, dated as of December 3, 1999,
among EPL Technologies, Inc., G.H.M., Inc., and Joseph
Giamanco.
5 Securities Purchase Agreement, dated December 9, 1999,
between G.H.M., Inc., and Halifax Fund, L.P.
6 Securities Purchase Agreement, dated December 9, 1999,
between Joseph Giamanco and Halifax Fund, L.P.
7 Securities Conversion Agreement, dated December 9, 1999,
between G.H.M., Inc., and EPL Technologies, Inc.
8 Securities Conversion Agreement, dated December 9, 1999,
between Joseph Giamanco and EPL Technologies, Inc.
9 Warrant Agreement, dated December 9, 1999, between
G.H.M., Inc., and EPL Technologies, Inc.
10 Warrant Agreement, dated December 9, 1999, between Joseph
Giamanco and EPL Technologies, Inc.
11 Warrant Agreement (for additional warrants), dated
December 9, 1999, between G.H.M., Inc., and EPL
Technologies, Inc.
12 Warrant Agreement (for additional warrants), dated
December 9, 1999, between Joseph Giamanco and EPL
Technologies, Inc.
11
<PAGE>
SCHEDULE 1
EXECUTIVE OFFICERS AND DIRECTORS
The name and present principal occupation or employment of
each of the executive officers and directors of G.H.M., Inc., are set forth
below. The principal business address of each of the sole director and the
officers of G.H.M., Inc., named below is c/o G.H.M., Inc., 74 Trinity Place, New
York, New York 10006.
G.H.M., Inc.
------------
Name and Present Principal
Positions Held Occupation or Employment
- -------------- ------------------------
Joseph Giamanco President, CEO of G.H.M., Inc.
President, CEO and Director
Ronald J. Menello Senior Vice President of G.H.M., Inc.
Gary A. Herman Senior Vice President of G.H.M., Inc.
12
<PAGE>
SCHEDULE II
OPEN MARKET TRANSACTIONS IN COMMON
STOCK OF
EPL TECHNOLOGIES, INC.
DURING THE PRECEDING 60 DAYS
Shares Purchased by G.H.M., Inc.,
- ---------------------------------
<TABLE>
<CAPTION>
Number of
Shares Price per Total
Date Purchased share Commission Cost
- ---- --------- ----- ---------- ----
<S> <C> <C> <C> <C>
12/3/99 1,450,677 0.5169 0 $750,000
12/6/99 990,000 0.5625 $250 $556,875
12/6/99 620,000 0.6875 $250 $426,250
12/9/99 309,810.5 0.5229 0 $162,000
12/9/99 1,000,000 0.5170 0 $517,000
Shares Purchased by Joseph Giamanco
Number of
Shares Price per Total
Date Purchased share Commission Cost
- ---- --------- ----- ---------- ----
<S> <C> <C> <C> <C>
11/3/99 400 0.5938 0 $335.84
12/3/99 1,450,677 0.5169 0 $750,000
12/9/99 309,810.5 0.5229 0 $162,000
12/9/99 1,000,000 0.5170 0 $517,000
</TABLE>
Shares Sold by Joseph Giamanco
Number of Sale Purchase
Shares Price per Price per
Date Sold share share
- ---- ---- ----- -----
11/05/99 1000 $0.7468 $4.000
11/05/99 1000 $0.7468 $4.000
11/05/99 6575 $0.7468 $4.000
11/05/99 1425 $0.7468 $5.129
11/10/99 3575 $0.6217 $5.129
11/10/99 1000 $0.6217 $16.287
11/10/99 1500 $0.6217 $16.160
11/10/99 1500 $0.6217 $16.035
11/10/99 1000 $0.6217 $15.911
11/10/99 1000 $0.6217 $15.786
13
<PAGE>
11/10/99 1000 $0.6217 $15.662
11/10/99 1000 $0.6217 $15.412
11/10/99 1000 $0.6217 $15.412
11/10/99 1000 $0.6217 $15.287
11/10/99 1000 $0.6217 $15.537
11/10/99 500 $0.6217 $15.168
11/10/99 500 $0.6217 $15.168
11/10/99 1000 $0.6217 $15.037
11/10/99 750 $0.6217 $14.914
11/10/99 500 $0.6217 $14.793
11/10/99 750 $0.6217 $14.789
11/10/99 750 $0.6217 $14.664
11/10/99 250 $0.6217 $14.556
11/10/99 425 $0.6217 $15.283
11/12/99 2075 $0.6219 $15.283
11/12/99 500 $0.6219 $14.668
11/12/99 500 $0.6219 $14.668
11/12/99 500 $0.6219 $14.668
11/12/99 500 $0.6219 $14.543
11/12/99 750 $0.6219 $14.539
11/12/99 750 $0.6219 $14.414
11/12/99 750 $0.6219 $14.289
11/12/99 750 $0.6219 $14.164
11/12/99 750 $0.6219 $14.039
11/12/99 750 $0.6219 $13.914
11/12/99 750 $0.6219 $13.789
11/12/99 750 $0.6219 $13.664
11/12/99 750 $0.6219 $13.539
11/12/99 450 $0.6219 $13.045
11/12/99 1000 $0.6219 $14.037
11/12/99 725 $0.6219 $13.912
11/16/99 275 $0.6218 $13.912
11/16/99 250 $0.6218 $13.556
11/16/99 250 $0.6218 $13.556
11/16/99 500 $0.6218 $13.418
11/16/99 500 $0.6218 $13.293
11/16/99 500 $0.6218 $13.168
11/16/99 2250 $0.6218 $12.831
11/16/99 2750 $0.6218 $12.422
11/16/99 100 $0.6217 $12.158
11/16/99 500 $0.6218 $11.793
11/16/99 500 $0.6218 $11.668
11/16/99 500 $0.6218 $11.668
11/16/99 1125 $0.6218 $11.786
11/17/99 25 $0.6208 $11.786
11/17/99 500 $0.6211 $11.543
11/17/99 500 $0.6211 $11.418
14
<PAGE>
11/17/99 500 $0.6211 $11.293
11/17/99 250 $0.6211 $11.181
11/17/99 250 $0.6211 $11.181
11/17/99 1000 $0.6211 $11.037
11/17/99 500 $0.6211 $11.043
11/17/99 100 $0.6211 $10.970
11/17/99 900 $0.6211 $10.912
11/17/99 475 $0.6211 $10.918
11/19/99 25 $0.6716 $10.918
11/19/99 500 $0.6716 $10.918
11/19/99 500 $0.6716 $10.918
11/19/99 250 $0.6716 $10.806
11/19/99 500 $0.6716 $10.793
11/19/99 300 $0.6716 $10.677
11/19/99 250 $0.6716 $10.806
11/19/99 500 $0.6716 $10.793
11/19/99 450 $0.6716 $10.670
11/19/99 750 $0.6716 $10.664
11/19/99 750 $0.6716 $10.539
11/19/99 250 $0.6716 $10.431
11/19/99 500 $0.6716 $10.418
11/19/99 250 $0.6716 $10.306
11/19/99 500 $0.6716 $10.293
11/19/99 250 $0.6716 $10.181
11/19/99 250 $0.6716 $10.181
11/19/99 250 $0.6716 $10.181
11/19/99 250 $0.6716 $10.056
11/19/99 1600 $0.6716 $11.534
11/19/99 1800 $0.6716 $11.379
11/19/99 500 $0.6716 $11.418
11/19/99 400 $0.6716 $11.421
11/19/99 100 $0.6716 $11.345
11/19/99 200 $0.6716 $10.063
11/19/99 300 $0.6716 $10.074
11/19/99 625 $0.6716 $11.958
11/22/99 2875 $0.6845 $11.958
11/22/99 250 $0.6845 $11.556
11/22/99 500 $0.6845 $11.543
11/22/99 250 $0.6845 $11.556
11/22/99 500 $0.6845 $11.418
11/22/99 500 $0.6845 $11.293
11/22/99 750 $0.6845 $11.289
11/22/99 250 $0.6845 $11.306
11/22/99 750 $0.6845 $11.164
11/22/99 750 $0.6845 $11.039
11/22/99 750 $0.6845 $10.914
11/22/99 150 $0.6845 $10.699
15
<PAGE>
11/22/99 350 $0.6845 $10.674
11/22/99 500 $0.6845 $10.543
11/22/99 500 $0.6845 $10.543
11/22/99 500 $0.6845 $10.418
11/22/99 500 $0.6845 $10.543
11/22/99 1000 $0.6845 $10.412
11/22/99 250 $0.6845 $10.806
11/22/99 500 $0.6845 $10.918
11/22/99 750 $0.6845 $10.789
11/22/99 1000 $0.6845 $10.662
11/22/99 875 $0.6845 $13.256
11/23/99 1125 $0.6366 $13.256
11/23/99 500 $0.6366 $13.293
11/23/99 1000 $0.6366 $10.898
11/23/99 2000 $0.6366 $10.821
11/23/99 500 $0.6366 $10.831
11/23/99 500 $0.6366 $10.768
11/23/99 500 $0.6366 $10.706
11/23/99 500 $0.6366 $10.643
11/23/99 500 $0.6366 $10.643
11/23/99 1000 $0.6366 $10.824
11/23/99 1000 $0.6366 $10.762
11/23/99 500 $0.6366 $10.643
11/23/99 375 $0.6366 $10.655
11/24/99 125 $0.652 $10.655
11/24/99 1000 $0.6520 $10.574
11/24/99 500 $0.6520 $10.581
11/24/99 1000 $0.6520 $10.574
11/24/99 1375 $0.65204 $10.509
11/30/99 125 $0.6218 $10.509
11/30/99 500 $0.6218 $10.518
11/30/99 500 $0.6218 $10.518
11/30/99 1500 $0.6218 $10.384
11/30/99 2000 $0.6218 $10.258
11/30/99 2000 $0.6218 $10.133
11/30/99 500 $0.6218 $9.893
11/30/99 500 $0.6218 $9.893
11/30/99 1000 $0.6218 $9.762
11/30/99 875 $0.6218 $9.636
16
<PAGE>
Shares Purchased by Ronald J. Menello
Number of
Shares Price per Total
Date Purchased share Commission Cost
- ---- --------- ----- ---------- ----
11/12/99 13,000 0.625 $130 $8,255
17
Exhibit 1 Agreement of Joint Filing
EXHIBIT 1
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, the undersigned persons hereby agree to file with the
Securities and Exchange Commission the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of December 16, 1999.
G.H.M., INC.
By: Joseph Giamanco, as President of
G.H.M., Inc.
/s/ Joseph Giamanco
Name: Joseph Giamanco
Joseph Giamanco
/s/ Joseph Giamanco
Name: Joseph Giamanco
Ronald J. Menello
/s/ Ronald J. Menello
Name: Ronald J. Menello
Gary A. Herman
/s/ Gary A. Herman
Name: Gary A. Herman
Exhibit 2
EPL TECHNOLOGIES, INC.
SUBSCRIPTION AGREEMENT
GHM, INC.
----------------------------
NAME
1
----------------------------
NUMBER
<PAGE>
THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE NOT
BEEN FILED OR REGISTERED WITH OR APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THE SUBSCRIPTION AGREEMENT. NO STATE SECURITIES LAW ADMINISTRATOR HAS PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR THE ADEQUACY OF
THE SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IT IS INTENDED THAT THE SECURITIES OFFERED HEREBY WILL BE MADE
AVAILABLE ONLY TO ACCREDITED INVESTORS, AS DEFINED IN REGULATION D PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
SECURITIES OFFERED HEREBY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, FOR NON-PUBLIC OFFERINGS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF
INVESTORS TO WHICH THE OFFERING WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFERS
OF THE SECURITIES.
THE SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO
CAN AFFORD TO SUSTAIN A LOSS OF THEIR INVESTMENT. INVESTORS WILL BE REQUIRED TO
REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS OFFERING,
AND THAT THEY OR THEIR PURCHASER REPRESENTATIVES HAVE SUCH KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT THEY ARE CAPABLE OF EVALUATING
THE MERITS AND RISKS OF THIS INVESTMENT.
NO SECURITIES MAY BE RESOLD OR OTHERWISE DISPOSED OF BY AN INVESTOR
UNLESS IN THE OPINION OF COUNSEL FOR OR SATISFACTORY TO THE COMPANY,
REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE SECURITIES LAWS IS NOT
REQUIRED OR THERE IS COMPLIANCE WITH SUCH REGISTRATION REQUIREMENTS.
THE SUBSCRIPTION AGREEMENT IS SUBMITTED IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SECURITIES AND DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED. IN ADDITION, THE SUBSCRIPTION AGREEMENT CONSTITUTES AN OFFER ONLY IF
A NAME AND IDENTIFICATION NUMBER APPEAR IN THE APPROPRIATE SPACES PROVIDED ON
THE COVER PAGE AND CONSTITUTES AN OFFER ONLY TO THE PERSON WHOSE NAME APPEARS
THEREON.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY.
-2-
<PAGE>
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
-3-
<PAGE>
Subject to the terms and conditions contained in this Agreement, the
undersigned (the "Subscriber") hereby subscribes for 1,450,677 shares of common
stock (the "Common Stock") of EPL Technologies, Inc. (the "Company").
In its sole discretion, the Company may accept or reject this Agreement
in whole or in part.
1. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS.
The Subscriber acknowledges that the Company is offering the
Common Stock in reliance upon the representations, warranties and other
information set forth by the Subscriber. The Subscriber undertakes to notify the
Company immediately of any changes in any of the representations, warranties and
other information contained herein.
(a) Sophistication. The Subscriber represents that he has such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of acquiring the Common Stock and of making an
informed investment decision with respect thereto. The undersigned is a person
who is able to bear the economic risk of his investment in the Company and has
adequate means of providing for his current needs and possible personal
contingencies with no need for liquidity of this investment. In making this
statement, consideration has been given to whether the undersigned could afford
to hold his investment in the Company for an indefinite period of time and
whether, at this time, he could afford a complete loss of his investment.
(b) Access to Information About the Company. The Subscriber
acknowledges that he has received and read the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 and its Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30,
1999. The Subscriber represents that he has had the opportunity to ask questions
of, and receive answers from, representatives of the Company concerning the
terms and conditions of this Offering. Any questions raised by the Subscriber
concerning the Offering have been answered to the satisfaction of the
Subscriber.
(c) Investment Representation. The Subscriber acknowledges
that the sale or resale of the Common Stock has not been registered under the
Securities Act of 1933, as amended (the "Act"), or any other Federal or state
law. The Subscriber represents that he is acquiring the securities hereunder for
investment purposes of his own account and not with a view to reselling or
otherwise distributing such securities in violation of any Federal or state
securities laws and understands and agrees that the securities to be issued
hereunder are restricted on transfer and must be held for an indefinite period
unless (i) they are registered under the Act or (ii) an exemption from
registration is available, and the issuer of the securities has received an
opinion of counsel, in form and substance satisfactory to it, to such effect.
(d) The Company shall deliver to the undersigned, certificates
representing the Common Stock which securities shall bear a legend in
substantially the following form:
"The securities represented by this
certificate have been acquired for investment and have not
been
-4-
<PAGE>
registered pursuant to the Securities Act of 1933, as
amended, or any applicable state statutes. Such securities
may not be sold, transferred, pledged, hypothecated or
otherwise disposed of without either an effective
registration statement relating to such disposition or any
opinion of counsel satisfactory to the Company that the
securities may be so disposed without being registered".
(e) The Company may deem and treat the undersigned as the
holder and owner of the Common Stock for all purposes and shall not be affected
by any notice to the contrary until the presentation to the Company of such
certificate for transfer pursuant to an effective registration statement under
the Act or pursuant to an opinion of counsel satisfactory to the Company that
such registration is unnecessary.
(f) The undersigned meets at least one of the following
criteria as an "Accredited Investor" (please check all that apply):
[ ] (a) The undersigned is a director or
executive officer of the Company;
[ ] (b) The undersigned is a natural person
whose individual net worth, or joint net
worth with that person's spouse, at the time
of purchase exceeds $1,000,000;
[ ] (c) The undersigned is a natural person
who had an individual income in excess of
$200,000 in each of the two most recent
years or joint income with that person's
spouse in excess of $300,000 in each of
those years and who reasonably expects the
same income level in the current year;
[ ] (d) The undersigned is an entity, and
all of the equity owners of such entity meet
the qualifications of either (a), (b) or (c)
above or (e) below; or
[ ] (e) The undersigned is a domestic bank,
whether acting in its individual or
fiduciary capacity; a domestic insurance
company; an investment company registered
under the Investment Company Act of 1940
(the "1940 Act"), or business development
company as defined in the 1940 Act; a Small
Business Investment Company licensed by the
United States Small Business Administration;
an employee benefit plan within the meaning
of Title I of the Employee Retirement
-5-
<PAGE>
Income Security Act of 1974, if the
investment decision is made by a plan
fiduciary which is either a bank, savings
and loan association, insurance company, or
registered investment advisor, or if the
employee benefit plan has total assets in
excess of $5,000,000, or if a self-directed
plan, with investment decisions made solely
by persons that meet the qualifications of
(a), (b), (c) or (d) above; a private
business development company as defined in
Section 202(a)(22) of the Investment
Advisors Act of 1940; an entity described in
Section 501(c)(3) of the Internal Revenue
Code, not formed for the purpose of
acquiring the securities offered, with total
assets in excess of $5,000,000; or a trust,
with total assets in excess of $5,000,000,
not formed for the specific purpose of
acquiring the securities offered, whose
purchase is directed by a sophisticated
person.
(g) Authority. The Subscriber represents that he has full
legal power and authority to enter into this Agreement and to purchase the
Common Stock subscribed for.
(h) No State Review. The Subscriber acknowledges that the
Common Stock is being sold pursuant to exemption from the registration
requirements of the state indicated as the Subscriber's state of residence, that
no securities commission or regulatory authority has approved, passed upon or
endorsed the merits of this Offering, nor is it intended that any such agency
will do so. Any representation to the contrary is unlawful.
(i) State Residence Status. Subscriber represents that he is a
resident and domiciliary (not a temporary or transient resident) of the state
and country set forth below, has no present intention to become a resident of
any other jurisdiction, and all communications, written or oral, concerning the
Common Stock have been directed to the Subscriber in, and received by him in,
such jurisdiction.
(j) Decision to Invest. In making his decision to purchase the
Common Stock the Subscriber has relied solely upon the information contained
and/or referred to herein and upon independent investigations made by him or his
legal counsel or investment advisor. He is not purchasing any Common Stock as a
result of or subsequent to (i) any advertisement, article, notice of other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or (ii) any seminar or meeting whose attendees,
including the Subscriber, were invited as a result of, subsequent to, or
pursuant to, any general solicitation.
(k) Irrevocable Agreement. The Subscriber hereby acknowledges
and agrees, except as provided by the law of the jurisdiction in which he
resides, that this Agreement is irrevocable and will survive the death or
disability of the undersigned; provided, however, that neither party shall have
any obligations unless and until the Agreement is executed by the Company.
-6-
<PAGE>
2. TERMS AND CONDITIONS.
The Subscriber acknowledges that this Offering is made by the
Company, subject to the following terms and conditions:
(a) Acceptance by the Company. Subscriptions for Common Stock
will be accepted, if at all, at the sole discretion of the Company.
(b) Share Certificates to be Delivered to Subscriber. As soon
as practicable upon the execution of this Agreement, the Company shall deliver
to the Subscriber certificates representing the Common Stock issued in the name
of the Subscriber. The securities issued hereunder, when delivered to the
Subscriber in accordance with the terms hereof, shall be duly authorized by
appropriate corporate action, shall be validly issued, fully paid and
non-assessable outstanding securities of the Company and shall be free from all
taxes, liens and charges with respect to the issuance thereof.
(c) Use of Proceeds. The Company shall use the proceeds of the
Offering to redeem 1,500 shares of Series D Convertible Preferred Stock of the
Company held by Heights Capital Management, Inc.
(d) Registration Statement. Within 30 days after the execution
of this Agreement, the Company agrees to file an S-3 registration statement
("Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), covering both the Common Stock and all of the "Warrant Shares" issued
under the "Warrant Agreement", each as defined in Section 2(e) below, and shall
use its best efforts to cause such Registration Statement to be declared
effective by the Securities and Exchange Commission (`SEC").
(e) Covenants with Respect to the Registration Statement
(i) Obligation to Maintain Effectiveness. The Company
shall keep effective any registration or qualification contemplated hereunder
and shall from time to time amend or supplement each applicable Registration
Statement, preliminary prospectus, final prospectus, application, document, and
communication for a period of 270 days beginning from the effective date of the
Registration Statement, provided, however, that, if the Company is required to
keep any such registration or qualification in effect with respect to securities
other than the Common Stock and the Warrant Shares beyond such period, the
Company shall keep such registration or qualification in effect as it relates to
the Common Stock and the Warrant Shares for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
(ii) Provision of Registration Statement. The Company
shall furnish to the Subscriber such reasonable number of copies of the
Registration Statement and of each amendment and supplement thereto (in each
case, including all exhibits), such reasonable number of copies of each
prospectus contained in such Registration Statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other
-7-
<PAGE>
documents, as such holder may reasonably request to facilitate the disposition
of the Common Stock and the Warrant Shares held by the Subscriber.
(iii) Opinion of Counsel. The Company shall furnish the
Subscriber with an opinion of its counsel, subject to ordinary and customary
qualifications and (reasonably acceptable to the Subscriber) to the effect that
(A) the Registration Statement has become effective under the Act and no order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of the Registration Statement, any preliminary prospectus,
and final prospectus, or any amendment or supplement thereto has been issued,
nor to the best knowledge of such counsel has the SEC or any securities or blue
sky authority of any jurisdiction instituted or threatened to institute any
proceedings with respect to such an order, (B) each document, if any,
incorporated by reference in the Registration Statement and the prospectus
included therein (except for financial statements and related schedules, as to
which such counsel need express no opinion) complied as to form when filed with
the SEC in all material respects with the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the SEC
thereunder, and (C) the Registration Statement and the prospectus included
therein and any supplements or amendments thereto (except for financial
statements and related schedules, as to which such counsel need express no
opinion) comply as to form in all material respects with the Act and the rules
and regulations of the SEC thereunder. In addition, such counsel shall state
that it has participated in conferences with officers and other representatives
of the Company and representatives of independent accountants for the Company,
at which conferences such counsel made inquiries of such officers,
representatives and accountants; discussed the contents of the preliminary
prospectus; the Registration Statement; and the prospectus and related matters
were discussed and, although such counsel is not passing and does not assume any
responsibility for the accuracy, completeness or fairness, the statements
contained in the preliminary prospectus, the Registration Statement and the
prospectus, on the basis of the foregoing, no facts have come to the attention
of such counsel which lead it to believe that either the Registration Statement
or on any amendment thereto, at the time such Registration Statement or
amendment became effective or the preliminary prospectus or prospectus or
amendment or any supplement thereto as of the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
(it being understood that such counsel need express no opinion with respect to
the financial statements and schedules and other financial and statistical data
included in the preliminary prospectus, the Registration Statement, or
prospectus).
(iv) Indemnification by the Company. Subject to the
conditions set forth below, the Company agrees to indemnify and hold harmless
the Subscriber, its officers, directors, partners, employees, agents, and
counsel, and each person, if any, who controls any such person within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, from and
against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Agreement, without
limitation, reasonable attorney's fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out of,
based upon, or in connection with (A) any untrue statement or alleged untrue
statement of a material fact contained (1) in the Registration Statement,
preliminary prospectus, or final
-8-
<PAGE>
prospectus (as from time to time amended or supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Common Stock or the
Warrant Shares or (2) in any application or other document or communication (in
this Agreement collectively called an "application") executed by or on behalf of
the Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to register or qualify any of the
Common Stock or the Warrant Shares under the securities or blue sky laws thereof
or filed with the SEC or any securities exchange; or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to such holder of Common Stock or the Warrant Shares
included in the Registration Statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or (B) any breach of any representation, warranty, covenant, or
agreement of the Company contained in this Agreement. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise have,
including liabilities arising pursuant to this Agreement.
The Company agrees promptly to notify each holder of
Common Stock or the Warrant Shares of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the sale of any Common Stock or Warrant Shares or any
preliminary prospectus, prospectus, the Registration Statement, or amendment or
supplement thereto, or any application relating to any sale of Common Stock or
Warrant Shares.
(f) Warrant Agreement. As an inducement to Subscriber to enter
into this Agreement, on the date of its execution, the Company agrees to issue a
warrant in favor of the Subscriber in substantially the form annexed hereto as
Exhibit A (the "Warrant Agreement") to purchase 500,000 shares of the common
stock of the Company (the "Warrant Shares"). If the Registration Statement is
not filed within 30 days after the execution of this Agreement, on the close of
business on such thirtieth day the Company will issue to the Subscriber under
the Warrant Agreement an additional 50,000 Warrant Shares. In addition, if the
Registration Statement is not declared effective by the SEC on the 61st day
after the execution of this Agreement, the Company, on such 61st day and at the
end of each thirty days thereafter during which the Registration Statement is
not effective, shall under the Warrant Agreement issue to the Subscriber an
additional 50,000 Warrant Shares. The exercise price applicable to the initial
500,000 Warrant Shares shall be the closing bid price of the Company's common
stock on the Nasdaq SmallCap Market, or the principal exchange upon which such
stock is then traded (the "Market Price"). Any additional Warrant Shares issued
under this Section 2(e) shall have an exercise price equal to the lower of such
Market Price or the Market Price on the date such additional Warrant Shares are
issuable under this Section 2(e).
3. MISCELLANEOUS PROVISIONS.
(a) Use of Speech. All pronouns contained herein and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the parties may require.
(b) Waiver. No waiver of any right under this Agreement shall
be deemed effective unless contained in a writing signed by the party charged
with such waiver, and no
-9-
<PAGE>
waiver of any right arising from any breach or failure to perform shall be
deemed to be a waiver of any future such right or of any other right arising
under this Agreement.
(c) Entire Agreement, Modification. This Agreement constitutes
the entire agreement between the parties and supersedes any prior understanding
or agreements concerning the subject matter hereof. This Agreement may be
amended, modified or terminated only by a written instrument signed by the
parties hereto.
(d) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to such state's principles of conflicts of laws.
(f) Notices. All notices, requests, demands, and
communications related to this Agreement will be deemed given if and when
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, to the addresses indicated on the last page of this
Agreement.
(g) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives and successors.
(h) Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions hereof.
(i) Unenforceability. If any provision of this Agreement is or
becomes or is deemed invalid, illegal, or unenforceable in any jurisdiction, to
the maximum extent permissible, such provision shall be deemed amended to
conform to applicable laws so as to be valid and enforceable or, if it cannot be
so amended without materially altering the intention of the parties, it shall be
stricken and the remainder of this Agreement shall remain in full force and
effect.
(j) Assignment. The Subscriber may not assign this Agreement
or its rights hereunder without the Company's prior written consent.
(k) Multiple Subscribers. If more than one person is signing
this Agreement, each representation, warranty, and undertaking stated herein
shall be the joint and several representation, warranty, and undertaking of each
such person. The Subscriber understands the meaning and legal consequence of the
representations and warranties contained in this Agreement.
4. SUBSCRIPTION.
Purchase.
Number of shares of Common Stock subscribed for: 1,450,677
-10-
<PAGE>
Total Purchase Price: $750,000
The Subscriber hereby subscribes for the Common Stock offered
by the Company in the amount as set forth above.
The Subscriber hereby agrees to pay the amount set forth above
to the Company upon execution of this Agreement.
GHM, INC.
By: ________________________________
Name:
Title:
________________________________
Date
74 Trinity Place
-----------------------------------------
Street
New York, New York 10006
-----------------------------------------
City State Zip
United States
-----------------------------------------
Country
________________________________
Social Security Number or
Federal ID Number
________________________________
Telephone No. of Subscriber
(Home/Business)
AGREED TO AND ACCEPTED BY:
EPL TECHNOLOGIES, INC.
By:____________________________________
Its: President and Chief Executive Officer
Dated:_________________________________
-11-
Exhibit 3
EPL TECHNOLOGIES, INC.
SUBSCRIPTION AGREEMENT
Joseph Giamanco
--------------------------
NAME
2
--------------------------
NUMBER
<PAGE>
THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE NOT
BEEN FILED OR REGISTERED WITH OR APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THE SUBSCRIPTION AGREEMENT. NO STATE SECURITIES LAW ADMINISTRATOR HAS PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR THE ADEQUACY OF
THE SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IT IS INTENDED THAT THE SECURITIES OFFERED HEREBY WILL BE MADE
AVAILABLE ONLY TO ACCREDITED INVESTORS, AS DEFINED IN REGULATION D PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
SECURITIES OFFERED HEREBY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, FOR NON-PUBLIC OFFERINGS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF
INVESTORS TO WHICH THE OFFERING WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFERS
OF THE SECURITIES.
THE SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO
CAN AFFORD TO SUSTAIN A LOSS OF THEIR INVESTMENT. INVESTORS WILL BE REQUIRED TO
REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS OFFERING,
AND THAT THEY OR THEIR PURCHASER REPRESENTATIVES HAVE SUCH KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT THEY ARE CAPABLE OF EVALUATING
THE MERITS AND RISKS OF THIS INVESTMENT.
NO SECURITIES MAY BE RESOLD OR OTHERWISE DISPOSED OF BY AN INVESTOR
UNLESS IN THE OPINION OF COUNSEL FOR OR SATISFACTORY TO THE COMPANY,
REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE SECURITIES LAWS IS NOT
REQUIRED OR THERE IS COMPLIANCE WITH SUCH REGISTRATION REQUIREMENTS.
THE SUBSCRIPTION AGREEMENT IS SUBMITTED IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SECURITIES AND DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED. IN ADDITION, THE SUBSCRIPTION AGREEMENT CONSTITUTES AN OFFER ONLY IF
A NAME AND IDENTIFICATION NUMBER APPEAR IN THE APPROPRIATE SPACES PROVIDED ON
THE COVER PAGE AND CONSTITUTES AN OFFER ONLY TO THE PERSON WHOSE NAME APPEARS
THEREON.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY.
-2-
<PAGE>
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
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<PAGE>
Subject to the terms and conditions contained in this Agreement, the
undersigned (the "Subscriber") hereby subscribes for 1,450,677 shares of common
stock (the "Common Stock") of EPL Technologies, Inc. (the "Company").
In its sole discretion, the Company may accept or reject this Agreement
in whole or in part.
1. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS.
The Subscriber acknowledges that the Company is offering the
Common Stock in reliance upon the representations, warranties and other
information set forth by the Subscriber. The Subscriber undertakes to notify the
Company immediately of any changes in any of the representations, warranties and
other information contained herein.
(a) Sophistication. The Subscriber represents that he has such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of acquiring the Common Stock and of making an
informed investment decision with respect thereto. The undersigned is a person
who is able to bear the economic risk of his investment in the Company and has
adequate means of providing for his current needs and possible personal
contingencies with no need for liquidity of this investment. In making this
statement, consideration has been given to whether the undersigned could afford
to hold his investment in the Company for an indefinite period of time and
whether, at this time, he could afford a complete loss of his investment.
(b) Access to Information About the Company. The Subscriber
acknowledges that he has received and read the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 and its Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30,
1999. The Subscriber represents that he has had the opportunity to ask questions
of, and receive answers from, representatives of the Company concerning the
terms and conditions of this Offering. Any questions raised by the Subscriber
concerning the Offering have been answered to the satisfaction of the
Subscriber.
(c) Investment Representation. The Subscriber acknowledges
that the sale or resale of the Common Stock has not been registered under the
Securities Act of 1933, as amended (the "Act"), or any other Federal or state
law. The Subscriber represents that he is acquiring the securities hereunder for
investment purposes of his own account and not with a view to reselling or
otherwise distributing such securities in violation of any Federal or state
securities laws and understands and agrees that the securities to be issued
hereunder are restricted on transfer and must be held for an indefinite period
unless (i) they are registered under the Act or (ii) an exemption from
registration is available, and the issuer of the securities has received an
opinion of counsel, in form and substance satisfactory to it, to such effect.
(d) The Company shall deliver to the undersigned, certificates
representing the Common Stock which securities shall bear a legend in
substantially the following form:
"The securities represented by this
certificate have been acquired for investment and have not
been
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<PAGE>
registered pursuant to the Securities Act of 1933, as
amended, or any applicable state statutes. Such securities
may not be sold, transferred, pledged, hypothecated or
otherwise disposed of without either an effective
registration statement relating to such disposition or any
opinion of counsel satisfactory to the Company that the
securities may be so disposed without being registered".
(e) The Company may deem and treat the undersigned as the
holder and owner of the Common Stock for all purposes and shall not be affected
by any notice to the contrary until the presentation to the Company of such
certificate for transfer pursuant to an effective registration statement under
the Act or pursuant to an opinion of counsel satisfactory to the Company that
such registration is unnecessary.
(f) The undersigned meets at least one of the following
criteria as an "Accredited Investor" (please check all that apply):
[ ] (a) The undersigned is a director or
executive officer of the Company;
[ ] (b) The undersigned is a natural person
whose individual net worth, or joint net worth
with that person's spouse, at the time of
purchase exceeds $1,000,000;
[ ] (c) The undersigned is a natural person who
had an individual income in excess of $200,000
in each of the two most recent years or joint
income with that person's spouse in excess of
$300,000 in each of those years and who
reasonably expects the same income level in the
current year;
[ ] (d) The undersigned is an entity, and all
of the equity owners of such entity meet the
qualifications of either (a), (b) or (c) above
or (e) below; or
[ ] (e) The undersigned is a domestic bank,
whether acting in its individual or fiduciary
capacity; a domestic insurance company; an
investment company registered under the
Investment Company Act of 1940 (the "1940
Act"), or business development company as
defined in the 1940 Act; a Small Business
Investment Company licensed by the United
States Small Business Administration; an
employee benefit plan within the meaning of
Title I of the Employee Retirement
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<PAGE>
Income Security Act of 1974, if the investment
decision is made by a plan fiduciary which is
either a bank, savings and loan association,
insurance company, or registered investment
advisor, or if the employee benefit plan has
total assets in excess of $5,000,000, or if a
self-directed plan, with investment decisions
made solely by persons that meet the
qualifications of (a), (b), (c) or (d) above; a
private business development company as defined
in Section 202(a)(22) of the Investment
Advisors Act of 1940; an entity described in
Section 501(c)(3) of the Internal Revenue Code,
not formed for the purpose of acquiring the
securities offered, with total assets in excess
of $5,000,000; or a trust, with total assets in
excess of $5,000,000, not formed for the
specific purpose of acquiring the securities
offered, whose purchase is directed by a
sophisticated person.
(g) Authority. The Subscriber represents that he has full
legal power and authority to enter into this Agreement and to purchase the
Common Stock subscribed for.
(h) No State Review. The Subscriber acknowledges that the
Common Stock is being sold pursuant to exemption from the registration
requirements of the state indicated as the Subscriber's state of residence, that
no securities commission or regulatory authority has approved, passed upon or
endorsed the merits of this Offering, nor is it intended that any such agency
will do so. Any representation to the contrary is unlawful.
(i) State Residence Status. Subscriber represents that he is a
resident and domiciliary (not a temporary or transient resident) of the state
and country set forth below, has no present intention to become a resident of
any other jurisdiction, and all communications, written or oral, concerning the
Common Stock have been directed to the Subscriber in, and received by him in,
such jurisdiction.
(j) Decision to Invest. In making his decision to purchase the
Common Stock the Subscriber has relied solely upon the information contained
and/or referred to herein and upon independent investigations made by him or his
legal counsel or investment advisor. He is not purchasing any Common Stock as a
result of or subsequent to (i) any advertisement, article, notice of other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or (ii) any seminar or meeting whose attendees,
including the Subscriber, were invited as a result of, subsequent to, or
pursuant to, any general solicitation.
(k) Irrevocable Agreement. The Subscriber hereby acknowledges
and agrees, except as provided by the law of the jurisdiction in which he
resides, that this Agreement is irrevocable and will survive the death or
disability of the undersigned; provided, however, that neither party shall have
any obligations unless and until the Agreement is executed by the Company.
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<PAGE>
2. TERMS AND CONDITIONS.
The Subscriber acknowledges that this Offering is made by the
Company, subject to the following terms and conditions:
(a) Acceptance by the Company. Subscriptions for Common Stock
will be accepted, if at all, at the sole discretion of the Company.
(b) Share Certificates to be Delivered to Subscriber. As soon
as practicable upon the execution of this Agreement, the Company shall deliver
to the Subscriber certificates representing the Common Stock issued in the name
of the Subscriber. The securities issued hereunder, when delivered to the
Subscriber in accordance with the terms hereof, shall be duly authorized by
appropriate corporate action, shall be validly issued, fully paid and
non-assessable outstanding securities of the Company and shall be free from all
taxes, liens and other charges with respect to the issuance thereof.
(c) Use of Proceeds. The Company shall use the proceeds of the
Offering to redeem 1,500 shares of Series D Convertible Preferred Stock of the
Company held by Heights Capital Management, Inc.
(d) Registration Statement. Within 30 days after the execution
of this Agreement, the Company agrees to file an S-3 registration statement
("Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), covering both the Common Stock and all of the "Warrant Shares" issued
under the "Warrant Agreement", each as defined in Section 2(e) below, and shall
use its best efforts to cause such Registration Statement to be declared
effective by the Securities and Exchange Commission (`SEC").
(e) Covenants with Respect to the Registration Statement
(i) Obligation to Maintain Effectiveness. The Company
shall keep effective any registration or qualification contemplated hereunder
and shall from time to time amend or supplement each applicable Registration
Statement, preliminary prospectus, final prospectus, application, document, and
communication for a period of 270 days beginning from the effective date of the
Registration Statement, provided, however, that, if the Company is required to
keep any such registration or qualification in effect with respect to securities
other than the Common Stock and the Warrant Shares beyond such period, the
Company shall keep such registration or qualification in effect as it relates to
the Common Stock and the Warrant Shares for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
(ii) Provision of Registration Statement. The Company
shall furnish to the Subscriber such reasonable number of copies of the
Registration Statement and of each amendment and supplement thereto (in each
case, including all exhibits), such reasonable number of copies of each
prospectus contained in such Registration Statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other
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<PAGE>
documents, as such holder may reasonably request to facilitate the disposition
of the Common Stock and the Warrant Shares held by the Subscriber.
(iii) Opinion of Counsel. The Company shall furnish
the Subscriber with an opinion of its counsel, subject to ordinary and customary
qualifications and (reasonably acceptable to the Subscriber) to the effect that
(A) the Registration Statement has become effective under the Act and no order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of the Registration Statement, any preliminary prospectus,
and final prospectus, or any amendment or supplement thereto has been issued,
nor to the best knowledge of such counsel has the SEC or any securities or blue
sky authority of any jurisdiction instituted or threatened to institute any
proceedings with respect to such an order, (B) each document, if any,
incorporated by reference in the Registration Statement and the prospectus
included therein (except for financial statements and related schedules, as to
which such counsel need express no opinion) complied as to form when filed with
the SEC in all material respects with the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the SEC
thereunder, and (C) the Registration Statement and the prospectus included
therein and any supplements or amendments thereto (except for financial
statements and related schedules, as to which such counsel need express no
opinion) comply as to form in all material respects with the Act and the rules
and regulations of the SEC thereunder. In addition, such counsel shall state
that it has participated in conferences with officers and other representatives
of the Company and representatives of independent accountants for the Company,
at which conferences such counsel made inquiries of such officers,
representatives and accountants; discussed the contents of the preliminary
prospectus; the Registration Statement; and the prospectus and related matters
were discussed and, although such counsel is not passing and does not assume any
responsibility for the accuracy, completeness or fairness, the statements
contained in the preliminary prospectus, the Registration Statement and the
prospectus, on the basis of the foregoing, no facts have come to the attention
of such counsel which lead it to believe that either the Registration Statement
or on any amendment thereto, at the time such Registration Statement or
amendment became effective or the preliminary prospectus or prospectus or
amendment or any supplement thereto as of the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
(it being understood that such counsel need express no opinion with respect to
the financial statements and schedules and other financial and statistical data
included in the preliminary prospectus, the Registration Statement, or
prospectus).
(iv) Indemnification by the Company. Subject to the
conditions set forth below, the Company agrees to indemnify and hold harmless
the Subscriber, its officers, directors, partners, employees, agents, and
counsel, and each person, if any, who controls any such person within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, from and
against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Agreement, without
limitation, reasonable attorney's fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out of,
based upon, or in connection with (A) any untrue statement or alleged untrue
statement of a material fact contained (1) in the Registration Statement,
preliminary prospectus, or final
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<PAGE>
prospectus (as from time to time amended or supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Common Stock or the
Warrant Shares or (2) in any application or other document or communication (in
this Agreement collectively called an "application") executed by or on behalf of
the Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to register or qualify any of the
Common Stock or the Warrant Shares under the securities or blue sky laws thereof
or filed with the SEC or any securities exchange; or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to such holder of Common Stock or the Warrant Shares
included in the Registration Statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or (B) any breach of any representation, warranty, covenant, or
agreement of the Company contained in this Agreement. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise have,
including liabilities arising pursuant to this Agreement.
The Company agrees promptly to notify each holder of
Common Stock or the Warrant Shares of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the sale of any Common Stock or Warrant Shares or any
preliminary prospectus, prospectus, the Registration Statement, or amendment or
supplement thereto, or any application relating to any sale of Common Stock or
Warrant Shares.
(f) Warrant Agreement. As an inducement to Subscriber to enter
into this Agreement, on the date of its execution, the Company agrees to issue a
warrant in favor of the Subscriber in substantially the form annexed hereto as
Exhibit A (the "Warrant Agreement") to purchase 500,000 shares of the common
stock of the Company (the "Warrant Shares"). If the Registration Statement is
not filed within 30 days after the execution of this Agreement, on the close of
business on such thirtieth day the Company will issue to the Subscriber under
the Warrant Agreement an additional 50,000 Warrant Shares. In addition, if the
Registration Statement is not declared effective by the SEC on the 61st day
after the execution of this Agreement, the Company, on such 61st day and at the
end of each thirty days thereafter during which the Registration Statement is
not effective, shall under the Warrant Agreement issue to the Subscriber an
additional 50,000 Warrant Shares. The exercise price applicable to the initial
500,000 Warrant Shares shall be the closing bid price of the Company's common
stock on the Nasdaq SmallCap Market, or the principal exchange upon which such
stock is then traded (the "Market Price"). Any additional Warrant Shares issued
under this Section 2(e) shall have an exercise price equal to the lower of such
Market Price or the Market Price on the date such additional Warrant Shares are
issuable under this Section 2(e).
3. MISCELLANEOUS PROVISIONS.
(a) Use of Speech. All pronouns contained herein and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the parties may require.
(b) Waiver. No waiver of any right under this Agreement shall
be deemed effective unless contained in a writing signed by the party charged
with such waiver, and no
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<PAGE>
waiver of any right arising from any breach or failure to perform shall be
deemed to be a waiver of any future such right or of any other right arising
under this Agreement.
(c) Entire Agreement, Modification. This Agreement constitutes
the entire agreement between the parties and supersedes any prior understanding
or agreements concerning the subject matter hereof. This Agreement may be
amended, modified or terminated only by a written instrument signed by the
parties hereto.
(d) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to such state's principles of conflicts of laws.
(f) Notices. All notices, requests, demands, and
communications related to this Agreement will be deemed given if and when
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, to the addresses indicated on the last page of this
Agreement.
(g) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives and successors.
(h) Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions hereof.
(i) Unenforceability. If any provision of this Agreement is or
becomes or is deemed invalid, illegal, or unenforceable in any jurisdiction, to
the maximum extent permissible, such provision shall be deemed amended to
conform to applicable laws so as to be valid and enforceable or, if it cannot be
so amended without materially altering the intention of the parties, it shall be
stricken and the remainder of this Agreement shall remain in full force and
effect.
(j) Assignment. The Subscriber may not assign this Agreement
or its rights hereunder without the Company's prior written consent.
(k) Multiple Subscribers. If more than one person is signing
this Agreement, each representation, warranty, and undertaking stated herein
shall be the joint and several representation, warranty, and undertaking of each
such person. The Subscriber understands the meaning and legal consequence of the
representations and warranties contained in this Agreement.
4. SUBSCRIPTION.
Purchase.
Number of shares of Common Stock subscribed for: 1,450,677
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<PAGE>
Total Purchase Price: $750,000
The Subscriber hereby subscribes for the Common Stock offered
by the Company in the amount as set forth above.
The Subscriber hereby agrees to pay the amount set forth above
to the Company upon execution of this Agreement.
By: ________________________________
Signature
Joseph Giamanco__________________________
Printed Name
________________________________
Date
c/o GHM, Inc. 74 Trinity Place
-----------------------------------------
Street
New York, New York 10006
-----------------------------------------
City State Zip
United States
-----------------------------------------
Country
________________________________
Social Security Number or
Federal ID Number
________________________________
Telephone No. of Subscriber
(Home/Business)
AGREED TO AND ACCEPTED BY:
EPL TECHNOLOGIES, INC.
By:____________________________________
Its: President and Chief Executive Officer
Dated:_________________________________
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EPL Technologies, Inc.
Two International Plaza, Suite 245
Philadelphia, Pennsylvania
19113-1507
As of December 3, 1999
Joseph Giamanco
c/o G.H.M. Inc.,
74 Trinity Place
New York, NY 10006
G.H.M. Inc.,
74 Trinity Place
New York, NY 10006
Attention: Joseph Giamanco
Re: Letter of Understanding among
G.H.M., Joseph Giamanco, and EPL Technologies, Inc.
---------------------------------------------------
Notwithstanding any other provision of those certain
Subscription Agreements, dated as of December 3, 1999, between Joseph Giamanco
and EPL Technologies, Inc., and between G.H.M. Inc., and EPL Technologies, Inc.,
G.H.M.'s and Mr. Giamanco's respective obligations to consummate the
transactions contemplated thereby are subject to EPL Technologies' satisfaction
of those additional conditions which the parties have discussed. It is our
anticipation that such conditions shall be satisfied on December 9, 1999. Per
our understanding, the funds transferred to us pursuant to the Subscription
Agreements will be held by us pending satisfaction of such conditions.
Your countersignature below will indicate your acknowledgment
of the foregoing.
Sincerely,
EPL Technologies, Inc.
By: /s/ Paul L. Devine
--------------------------
Name: Paul L. Devine
Title: President and CEO
/s/ Joseph Giamanco
- -----------------------
Joseph Giamanco
G.H.M. Inc.
By: /s/ Joseph Giamanco
--------------------
Joseph Giamanco
President
Exhibit 5
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
9, 1999, by and among HALIFAX FUND, L.P., a _____________________________ (the
"Seller"), and GHM, INC., a ________________ corporation (the "Buyer").
WHEREAS, the Buyer desires to purchase and the Seller desires to sell,
upon the terms and conditions set forth in this Agreement, shares of the Series
D Convertible Preferred Stock (the "Preferred Stock") of EPL Technologies, Inc.,
a Colorado corporation (the "Company");
NOW THEREFORE, the Seller and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
a. Purchase of Preferred Shares. On the Closing Date (as defined
below), the Seller shall sell to the Buyer and the Buyer shall purchase from the
Seller 162 shares of the Preferred Stock (the "Preferred Shares").
b. Form of Payment. On the Closing Date (as defined below), (i) the
Buyer shall pay One Hundred Sixty Two Thousand Dollars ($162,000) for the
Preferred Shares (the "Purchase Price") by wire transfer of immediately
available funds to the Seller, in accordance with the Seller's written wiring
instructions, against delivery of the certificates representing the Preferred
Shares, and (ii) the Seller shall deliver (or cause the Escrow Agent to deliver)
the certificates representing the Preferred Shares to the Buyer, against
delivery of such Purchase Price.
c. Escrow of Preferred Shares. Upon the execution of this Agreement,
the Seller will deposit with Ballard, Spahr, Andrews & Ingersoll (the "Escrow
Agent") the certificates representing the Preferred Shares, which certificates
will be released to the Buyer upon receipt of the Purchase Price by the Seller.
In the event the Closing does not occur on or before December 14, 1999, subject
to extension by written agreement of the parties in their sole discretion (the
"Termination Date"), the Escrow Agent shall return the certificates representing
the Preferred Shares to the Seller.
d. Closing Date. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 5 and Section 6 below, the date and time
of the sale and
<PAGE>
purchase of the Preferred Shares pursuant to this Agreement (the "Closing Date")
shall be as soon as practicable after the date hereof, but in no event later
than the Termination Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur on the Closing Date at the Philadelphia
offices of the Escrow Agent, or at such other location as may be agreed to by
the parties.
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
represents and warrants to the Seller that:
a. Authorization; Enforcement. The Buyer has all requisite power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Buyer, and this Agreement constitutes the valid and binding agreement of the
Buyer enforceable in accordance with its terms.
b. Information; Acknowledgement of Risk; Independence of Action.
(i) The Company has furnished the Buyer and its advisors, if any,
with all
materials relating to the business, finances and operations of the Company and
materials relating to the Preferred Shares which have been requested by the
Buyer or its advisors. The Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and have received satisfactory
answers to such questions. The Buyer fully understands the financial condition
of the Company and understands that its investment in the Preferred Shares
involves a significant degree of risk. The Buyer is a sophisticated investor
with considerable experience in investments of this nature. The Buyer
acknowledges that the Seller makes no representations or warranties concerning
the business, finances or operations of the Company. Except for the
representations and warranties of the Seller set forth in Section 3 below, the
Buyer acknowledges that the Seller makes no representations or warranties with
respect to the Preferred Shares. In making its decision to enter into this
Agreement and purchase the Preferred Shares pursuant to the terms herein, the
Buyer has in no way relied upon any statement made or information provided by
the Seller. With full recognition of the foregoing, the Buyer wishes to purchase
the Preferred Shares on the terms set forth herein.
(ii) The Buyer acknowledges that the Seller may be in possession
of information, including material non-public information concerning the Company
or the Preferred Shares (the "Material Information"), which may not be known to
the Buyer. Such Material Information may include, but not be limited to,
information concerning the financial condition, results of operations,
businesses, projections, assets, liabilities, management, appraisals, plans and
proposals, and securities and the market therefor of the Company. The Buyer
represents and acknowledges that any and all non-public information available to
the Seller may be materially adverse to the Buyer's own interests and that, if
the Buyer were in possession of some or all of that
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<PAGE>
information, the Buyer might not enter into the transactions contemplated by
this Agreement. The Buyer acknowledges and agrees that it is not relying on the
Seller to disclose, and the Seller is not disclosing, any information including
Material Information. The Buyer has conducted its own investigation, to the
extent the Buyer deemed necessary or desirable for the purpose of entering into
the transactions contemplated by this Agreement, regarding the Company and the
Preferred Shares and agrees that, notwithstanding any other term or provision of
this Agreement, the Seller shall have no liability whatsoever to the Buyer based
on the Seller's knowledge, use, possession or non-disclosure of any information
including the Material Information. The Buyer has requested, received, reviewed
and considered all information it deems necessary or appropriate to make an
informed decision regarding the purchase of the Preferred Shares and has
independently, without reliance upon the Seller or any representations or
warranties by the Seller, made its own analysis and decision to enter into this
Agreement. Based upon the foregoing, the Buyer for itself and its heirs,
executors administrators, successors and assigns hereby releases, remises,
acquits and forever discharges the Seller and each of the Seller's investment
managers, directors, officers, representatives, employees, partners and agents,
each of its and their successors and assigns, and each of the affiliates of each
of the foregoing from any and all claims, demands, controversies, actions,
causes of action, obligations, liabilities, costs, expenses, fees and damages
whatsoever, of any or all character, nature and kind, in law or in equity, past
or present, known or unknown, suspected or unsuspected, from the beginning of
time which arise on account of or in any way grow out of the Seller's possession
of any information (including Material Information) or the Seller's failure to
disclose such information (including Material Information) to the Buyer.
(iii) The Buyer acknowledges and agrees (A) that the Buyer has
acted independently in its decision to purchase the Preferred Shares from the
Seller; (B) that, prior to entering into this Agreement, the Buyer had no
agreement, arrangement or understanding whatsoever with the Seller or any other
person with respect to the Company or the Preferred Shares; and (C) that, upon
consummation of the transactions contemplated by this Agreement, the Buyer will
have no such agreement, arrangement or understanding.
c. Investment Purpose. The Buyer is purchasing the Preferred Shares
and the shares of Common Stock issuable upon conversion of or otherwise pursuant
to the Preferred Shares for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or
exempted from registration under the Securities Act of 1933, as amended (the
"Securities Act").
d. Accredited Investor Status. The Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
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<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to the Buyer that:
a. Authorization; Enforcement. The Seller has all requisite power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Seller, and this Agreement constitutes the valid and binding agreement of the
Seller enforceable in accordance with its terms.
b. Ownership of Preferred Shares. The Seller is the beneficial and
record owner of the Preferred Shares being sold to the Buyer pursuant to this
Agreement, the Seller has good and valid title to the Preferred Shares, and at
the Closing the Seller shall deliver to the Buyer the Preferred Shares free from
all taxes, liens, claims and encumbrances.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts to satisfy
timely each of the conditions described in Sections 5 and 6 of this Agreement.
b. Expenses. Each of the parties to this Agreement shall bear its
own expenses.
5. CONDITIONS TO THE SELLER'S OBLIGATION TO SELL. The
obligation of the Seller hereunder to sell the Preferred Shares to the Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions thereto, provided that these conditions are for
the Seller's sole benefit and may be waived by the Seller at any time in its
sole discretion:
a. The Buyer shall have executed this Agreement and delivered the
same to the Seller.
b. The Buyer shall have delivered the Purchase Price in accordance
with Section 1(b) above.
c. The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time, and the Buyer shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Buyer at or prior to the Closing Date.
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<PAGE>
d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
6. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE. The
obligation of the Buyer hereunder to purchase the Preferred Shares from the
Seller at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Buyer's sole benefit and may be waived by the Buyer at any time in its
sole discretion:
a. The Seller shall have executed this Agreement and delivered the
same to the Buyer.
b. The Seller or the Escrow Agent shall have delivered to the Buyer
the certificates representing the Preferred Shares in accordance with Section
1(b) above.
c. The representations and warranties of the Seller shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time, and the Seller shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Seller at or prior to the Closing Date.
d. No litigation, statute, rule, regulation, executive order,
decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
7. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed in the State of Delaware (without regard to principles
of conflict of laws). Both parties irrevocably consent to the jurisdiction of
the United States federal courts and the state courts located in Delaware with
respect to any suit or proceeding based on or arising under this Agreement or
the transactions contemplated hereby and irrevocably agree that all claims in
respect of such suit or proceeding may be determined in such courts. Both
parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Both parties further agree that
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<PAGE>
service of process upon a party mailed by first class mail shall be deemed in
every respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any other manner permitted by law. Both parties agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
b. Counterparts; Signatures by Facsimile. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same instrument, and shall become effective when counterparts have been
signed by each party and delivered to the other party. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement.
e. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to the matters covered herein and,
except as specifically set forth herein, neither the Seller nor the Buyer makes
any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Seller:
___________________________
___________________________
___________________________
___________________________
Attention:_________________
Facsimile: ________________
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<PAGE>
If to the Buyer:
GHM, Inc.
74 Trinity Place
New York, New York 10006
Attention: Joseph Giamanco
Facsimile: ____________________
Each party shall provide notice to the other party of any
change in address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective permitted successors
and assigns. Neither the Seller nor the Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. The representations and warranties of the Buyer set
forth in Sections 2(b) and 2(c) hereof shall survive the Closing hereunder. The
Buyer agrees to indemnify and hold harmless the Seller and each of the Seller's
investment managers, directors, officers, representatives, employees, partners
and agents, each of its and their successors and assigns, and each of the
affiliates of each of the foregoing for loss or damage arising as a result of or
related to any breach or alleged breach by the Buyer of any of its
representations and warranties set forth in this Agreement, including
advancement of expenses as they are incurred.
j. Publicity. Neither the Seller nor the Buyer shall issue any press
release or make any public statement concerning this Agreement and the
transactions contemplated hereby without the prior approval of the other party.
k. Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
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<PAGE>
m. Remedies. Each of the parties acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the other party by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, each such party acknowledges that the remedy at law for a breach of
its obligations under this Agreement will be inadequate and agrees, in the event
of a breach or threatened breach by such party of the provisions of this
Agreement, that the non-breaching party shall be entitled, in addition to all
other available remedies in law or in equity, to an injunction or injunctions to
prevent or cure any breaches of the terms or provisions of this Agreement and to
enforce specifically the terms and provisions of this Agreement, without the
necessity of showing economic loss and without any bond or other security being
required.
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<PAGE>
IN WITNESS WHEREOF, the undersigned Buyer and Seller have
caused this Agreement to be duly executed as of the date first above written.
GHM, INC.
By:__________________________________
Name:_______________________
Title:______________________
HALIFAX FUND, L.P.
By:__________________________________
Name:_______________________
Title:______________________
-9-
Exhibit 6
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
9, 1999, by and among HALIFAX FUND, L.P., a _____________________________ (the
"Seller"), and JOSEPH GIAMANCO (the "Buyer").
WHEREAS, the Buyer desires to purchase and the Seller desires to sell,
upon the terms and conditions set forth in this Agreement, shares of the Series
D Convertible Preferred Stock (the "Preferred Stock") of EPL Technologies, Inc.,
a Colorado corporation (the "Company");
NOW THEREFORE, the Seller and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
a. Purchase of Preferred Shares. On the Closing Date (as defined
below), the Seller shall sell to the Buyer and the Buyer shall purchase from the
Seller 162 shares of the Preferred Stock (the "Preferred Shares").
b. Form of Payment. On the Closing Date (as defined below), (i) the
Buyer shall pay One Hundred Sixty Two Thousand Dollars ($162,000) for the
Preferred Shares (the "Purchase Price") by wire transfer of immediately
available funds to the Seller, in accordance with the Seller's written wiring
instructions, against delivery of the certificates representing the Preferred
Shares, and (ii) the Seller shall deliver (or cause the Escrow Agent to deliver)
the certificates representing the Preferred Shares to the Buyer, against
delivery of such Purchase Price.
c. Escrow of Preferred Shares. Upon the execution of this Agreement,
the Seller will deposit with Ballard, Spahr, Andrews & Ingersoll (the "Escrow
Agent") the certificates representing the Preferred Shares, which certificates
will be released to the Buyer upon receipt of the Purchase Price by the Seller.
In the event the Closing does not occur on or before December 14, 1999, subject
to extension by written agreement of the parties in their sole discretion (the
"Termination Date"), the Escrow Agent shall return the certificates representing
the Preferred Shares to the Seller.
d. Closing Date. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 5 and Section 6 below, the date and time
of the sale and
<PAGE>
purchase of the Preferred Shares pursuant to this Agreement (the "Closing Date")
shall be as soon as practicable after the date hereof, but in no event later
than the Termination Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur on the Closing Date at the Philadelphia
offices of the Escrow Agent, or at such other location as may be agreed to by
the parties.
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to the Seller that:
a. Authorization; Enforcement. The Buyer has all requisite power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Buyer, and this Agreement constitutes the valid and binding agreement of the
Buyer enforceable in accordance with its terms.
b. Information; Acknowledgement of Risk; Independence of Action.
(i) The Company has furnished the Buyer and its advisors, if any,
with all
materials relating to the business, finances and operations of the Company and
materials relating to the Preferred Shares which have been requested by the
Buyer or its advisors. The Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and have received satisfactory
answers to such questions. The Buyer fully understands the financial condition
of the Company and understands that its investment in the Preferred Shares
involves a significant degree of risk. The Buyer is a sophisticated investor
with considerable experience in investments of this nature. The Buyer
acknowledges that the Seller makes no representations or warranties concerning
the business, finances or operations of the Company. Except for the
representations and warranties of the Seller set forth in Section 3 below, the
Buyer acknowledges that the Seller makes no representations or warranties with
respect to the Preferred Shares. In making its decision to enter into this
Agreement and purchase the Preferred Shares pursuant to the terms herein, the
Buyer has in no way relied upon any statement made or information provided by
the Seller. With full recognition of the foregoing, the Buyer wishes to purchase
the Preferred Shares on the terms set forth herein.
(ii) The Buyer acknowledges that the Seller may be in possession
of information, including material non-public information concerning the Company
or the Preferred Shares (the "Material Information"), which may not be known to
the Buyer. Such Material Information may include, but not be limited to,
information concerning the financial condition, results of operations,
businesses, projections, assets, liabilities, management, appraisals, plans and
proposals, and securities and the market therefor of the Company. The Buyer
represents and acknowledges that any and all non-public information available to
the Seller may be materially adverse to the Buyer's own interests and that, if
the Buyer were in possession of some or all of that
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<PAGE>
information, the Buyer might not enter into the transactions contemplated by
this Agreement. The Buyer acknowledges and agrees that it is not relying on the
Seller to disclose, and the Seller is not disclosing, any information including
Material Information. The Buyer has conducted its own investigation, to the
extent the Buyer deemed necessary or desirable for the purpose of entering into
the transactions contemplated by this Agreement, regarding the Company and the
Preferred Shares and agrees that, notwithstanding any other term or provision of
this Agreement, the Seller shall have no liability whatsoever to the Buyer based
on the Seller's knowledge, use, possession or non-disclosure of any information
including the Material Information. The Buyer has requested, received, reviewed
and considered all information it deems necessary or appropriate to make an
informed decision regarding the purchase of the Preferred Shares and has
independently, without reliance upon the Seller or any representations or
warranties by the Seller, made its own analysis and decision to enter into this
Agreement. Based upon the foregoing, the Buyer for itself and its heirs,
executors administrators, successors and assigns hereby releases, remises,
acquits and forever discharges the Seller and each of the Seller's investment
managers, directors, officers, representatives, employees, partners and agents,
each of its and their successors and assigns, and each of the affiliates of each
of the foregoing from any and all claims, demands, controversies, actions,
causes of action, obligations, liabilities, costs, expenses, fees and damages
whatsoever, of any or all character, nature and kind, in law or in equity, past
or present, known or unknown, suspected or unsuspected, from the beginning of
time which arise on account of or in any way grow out of the Seller's possession
of any information (including Material Information) or the Seller's failure to
disclose such information (including Material Information) to the Buyer.
(iii) The Buyer acknowledges and agrees (A) that the Buyer has
acted independently in its decision to purchase the Preferred Shares from the
Seller; (B) that, prior to entering into this Agreement, the Buyer had no
agreement, arrangement or understanding whatsoever with the Seller or any other
person with respect to the Company or the Preferred Shares; and (C) that, upon
consummation of the transactions contemplated by this Agreement, the Buyer will
have no such agreement, arrangement or understanding.
c. Investment Purpose. The Buyer is purchasing the Preferred Shares
and the shares of Common Stock issuable upon conversion of or otherwise pursuant
to the Preferred Shares for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or
exempted from registration under the Securities Act of 1933, as amended (the
"Securities Act").
d. Accredited Investor Status. The Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
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<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Buyer that:
a. Authorization; Enforcement. The Seller has all requisite power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the
Seller, and this Agreement constitutes the valid and binding agreement of the
Seller enforceable in accordance with its terms.
b. Ownership of Preferred Shares. The Seller is the beneficial and
record owner of the Preferred Shares being sold to the Buyer pursuant to this
Agreement, the Seller has good and valid title to the Preferred Shares, and at
the Closing the Seller shall deliver to the Buyer the Preferred Shares free from
all taxes, liens, claims and encumbrances.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts to satisfy
timely each of the conditions described in Sections 5 and 6 of this Agreement.
b. Expenses. Each of the parties to this Agreement shall bear its
own expenses.
5. CONDITIONS TO THE SELLER'S OBLIGATION TO SELL. The obligation of the
Seller hereunder to sell the Preferred Shares to the Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions thereto, provided that these conditions are for the
Seller's sole benefit and may be waived by the Seller at any time in its sole
discretion:
a. The Buyer shall have executed this Agreement and delivered the
same to the Seller.
b. The Buyer shall have delivered the Purchase Price in accordance
with Section 1(b) above.
c. The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time, and the Buyer shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Buyer at or prior to the Closing Date.
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<PAGE>
d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
6. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE. The obligation of
the Buyer hereunder to purchase the Preferred Shares from the Seller at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the Buyer's
sole benefit and may be waived by the Buyer at any time in its sole discretion:
a. The Seller shall have executed this Agreement and delivered the
same to the Buyer.
b. The Seller or the Escrow Agent shall have delivered to the Buyer
the certificates representing the Preferred Shares in accordance with Section
1(b) above.
c. The representations and warranties of the Seller shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time, and the Seller shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Seller at or prior to the Closing Date.
d. No litigation, statute, rule, regulation, executive order,
decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
7. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed in the State of Delaware (without regard to principles
of conflict of laws). Both parties irrevocably consent to the jurisdiction of
the United States federal courts and the state courts located in Delaware with
respect to any suit or proceeding based on or arising under this Agreement or
the transactions contemplated hereby and irrevocably agree that all claims in
respect of such suit or proceeding may be determined in such courts. Both
parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Both parties further agree that
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<PAGE>
service of process upon a party mailed by first class mail shall be deemed in
every respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any other manner permitted by law. Both parties agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
b. Counterparts; Signatures by Facsimile. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same instrument, and shall become effective when counterparts have been
signed by each party and delivered to the other party. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement.
e. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to the matters covered herein and,
except as specifically set forth herein, neither the Seller nor the Buyer makes
any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Seller:
_______________________________
_______________________________
_______________________________
_______________________________
Attention:_____________________
Facsimile: ____________________
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<PAGE>
If to the Buyer:
Joseph Giamanco
c/o GHM, Inc.
74 Trinity Place
New York, New York 10006
Facsimile: ____________________
Each party shall provide notice to the other party of any
change in address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective permitted successors
and assigns. Neither the Seller nor the Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. The representations and warranties of the Buyer set
forth in Sections 2(b) and 2(c) hereof shall survive the Closing hereunder. The
Buyer agrees to indemnify and hold harmless the Seller and each of the Seller's
investment managers, directors, officers, representatives, employees, partners
and agents, each of its and their successors and assigns, and each of the
affiliates of each of the foregoing for loss or damage arising as a result of or
related to any breach or alleged breach by the Buyer of any of its
representations and warranties set forth in this Agreement, including
advancement of expenses as they are incurred.
j. Publicity. Neither the Seller nor the Buyer shall issue any press
release or make any public statement concerning this Agreement and the
transactions contemplated hereby without the prior approval of the other party.
k. Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
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<PAGE>
m. Remedies. Each of the parties acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the other party by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, each such party acknowledges that the remedy at law for a breach of
its obligations under this Agreement will be inadequate and agrees, in the event
of a breach or threatened breach by such party of the provisions of this
Agreement, that the non-breaching party shall be entitled, in addition to all
other available remedies in law or in equity, to an injunction or injunctions to
prevent or cure any breaches of the terms or provisions of this Agreement and to
enforce specifically the terms and provisions of this Agreement, without the
necessity of showing economic loss and without any bond or other security being
required.
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<PAGE>
IN WITNESS WHEREOF, the undersigned Buyer and Seller have
caused this Agreement to be duly executed as of the date first above written.
_________________________________
JOSEPH GIAMANCO
HALIFAX FUND, L.P.
By:______________________________
Name:___________________
Title:__________________
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Exhibit 7
SECURITIES CONVERSION AGREEMENT
SECURITIES CONVERSION AGREEMENT (this "Agreement") dated as of December
9, 1999 by and among EPL Technologies, Inc., a Colorado corporation with
headquarters located at 2 International Plaza, Suite 245, Philadelphia, PA
19113-1507 ("EPL") and GHM, Inc. (the "Holder").
WHEREAS, the Holder pursuant to a Securities Purchase Agreement dated
as of the date hereof (the "Purchase Agreement") purchased from either RGC
International Investors, LDC or Halifax Fund, L.P. ("Seller") 162 shares of
Series D Convertible Preferred Stock (the "Preferred Stock") (the Purchase
Agreement is attached hereto as Exhibit A);
WHEREAS, the preferences and rights of the Preferred Stock are set
forth in the Certificate of Designation of EPL attached hereto as Exhibit B (the
"Certificate"), which forms a part of EPL's Articles of Incorporation, as
amended.
WHEREAS, the Holder, pursuant to the Certificate and this Agreement,
wishes to convert the Preferred Stock into EPL's common stock, par value $.001
per share (the "Common Stock").
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, EPL and the Holder hereby agree as follows:
1. CERTAIN DEFINITIONS. Except as otherwise provided herein, the
capitalized terms used in this Agreement shall have the meanings ascribed to
them in either the Purchase Agreement or the Certificate.
2. CONVERSION OF PREFERRED STOCK
(a) Notice of Conversion. The Holder hereby gives EPL notice
that as of the date hereof it intends to convert all of the Preferred Stock
owned both of record and beneficially into the shares of Common Stock is
issuable pursuant to the Certificate. Such conversion shall be effected pursuant
to the delivery by the Holder to EPL of Notice of Conversion in the form
attached to this Agreement as Exhibit C.
(b) Number of Shares of Common Stock. The Holder: (i)
acknowledges and agrees that the number of shares of Common Stock into which the
Preferred Stock shall be converted (the "Conversion Shares") has been calculated
pursuant to the Certificate; Holder (ii) represents that it (he/she) has read,
is fully familiar with and understands the Certificate in all respects
(including, without limitation, the optional conversion provisions included in
Article VI thereof); and (iii) agrees in all respects with the calculation of
the Conversion Shares (including the Premium Amount) set forth in Exhibit C.
(c) Premium Amount. Holder agrees that upon the conversion of
the Preferred Stock, Holder will contribute to EPL that number of Conversion
Shares equal to the
<PAGE>
Premium Amount set forth in Exhibit C as an additional contribution to capital
by the Holder, to be held by EPL as treasury shares pursuant to the Colorado
Business Corporation Act. With respect to such contribution to capital, the
Holder agrees that upon the conversion of the Preferred Stock, EPL may retain in
its treasury the amount of Conversion Shares equal to the Premium Amount.
(d) Delivery of Conversion Shares. The Conversion Shares shall
be delivered by EPL to the Holder within the time periods and otherwise in
accordance with the provisions of Article VI E(b) and (c) of the Certificate.
(e) Terms of Certificate Shall Control. Except as expressly
otherwise provided in this Agreement, the terms and conditions of the
Certificate shall govern the conversion of the Preferred Stock hereunder.
3. HOLDER'S REPRESENTATIONS AND WARRANTIES. The Holder represents and
warrants to EPL that:
(a) Authorization; Enforcement. The Holder has all requisite
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
authorized by all necessary corporate, partnership, LLC or individual action by
the Holder. This Agreement has been duly executed and delivered on behalf of the
Holder, and this Agreement constitutes valid and binding agreements of the
Holder enforceable in accordance with its terms.
(b) Information; Acknowledgment of Risk. EPL has furnished the
Holder with EPL's Form 10K for the year ended December 31, 1998, EPL's 1999
Proxy Statement, each Form 10-Q, 8-K or any other filing made by EPL during the
year 1999 (through the date hereof) pursuant to the filing and disclosure
requirements of the Securities Exchange Act of 1934 (the "1934 Act") (the
foregoing documents shall collectively be referred to herein as the "Current
1934 Act Filings"). EPL has also provided the Holder with the Registration
Statement on Form S-3 (the "Registration Statement") covering the Conversion
Shares. Holder acknowledges that Holder has had access to all other 1934 Act
filings made by EPL since it registered its Common Stock under Section 12(g) of
the 1934 Act (the "1934 Act Filings"). Holder has read and examined the Current
1934 Act Filings (and such of the 1934 Act Filings, if any, that it (he/she) has
deemed advisable) and the Registration Statement and fully understands the same.
Holder has made the decision to enter into this Agreement and to consummate the
transactions contemplated hereby (including, without limitation, the conversion
of the Preferred Stock into the Conversion Shares and the contribution to EPL of
Conversion Shares equal to the Premium Amount) on the basis of such examination
and understanding. On the basis of such examination and understanding the Holder
fully understands that its decision to convert the Preferred Stock into
Conversion Shares involves a significant degree of risk including the risk
factors set forth in the Registration Statement. The Holder is a sophisticated
investor with considerable experience in investments of this nature. Except for
the representations and warranties of EPL set forth in Section 4 below, the
Holder acknowledges that EPL makes no representations or warranties with respect
to either the Preferred Shares, the Conversion Shares, or the Common Stock of
EPL in general. In making its (his/her) decision to enter into this Agreement
and to convert the Preferred Shares into the Conversion Shares, the Holder has
in no way relied on upon any
-2-
<PAGE>
statement made by EPL, its officers, directors, employees or agents or any
company information provided by EPL except the Current 1934 Act Filings, the
1934 Act Filings (to the extent examined by the Holder) and the Registration
Statement. With full recognition of the foregoing, the Holder wishes to convert
the Preferred Stock to the Conversion Shares on the terms set forth herein.
(c) Investment Representations. The holder is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933 (the "1933 Act"). As of the date hereof, the
Holder intends to hold the Conversion Shares delivered to it (him/her) pursuant
to the terms and conditions of this Agreement for its (his/her) account and not
with a present view toward the public sale or distribution thereof, except (i)
pursuant to the Registration Statement (in accordance with the provisions of
Section 5 below) or (ii) sales exempt under the 1933 Act.
(d) Reliance on Exemptions. The Holder understands that the
Conversion Shares are being delivered to it (he/she) in reliance upon specific
exemptions from the registration requirements of the United States federal and
state securities laws and that EPL is relying upon the truth and accuracy of,
and the Holder's compliance with, the representations, warranties, agreements,
acknowledgments, and understandings of the Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of the Holder
to acquire the Conversion Shares.
4. REPRESENTATIONS AND WARRANTIES OF EPL. EPL represents and warrants
to the Holder that:
(a) Authorization; Enforcement. EPL has all requisite power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized by all requisite corporate action. This Agreement has been duly
executed and delivered on behalf of EPL, and this Agreement constitutes valid
and binding agreements of EPL enforceable in accordance with its terms.
(b) The Conversion Shares. Upon their issuance in accordance
with the Certificate and this Agreement, the Conversion Shares shall be fully,
paid and non-assessable shares of Common Stock and shall be free from all taxes,
liens, claims and encumbrances.
5. AMENDMENT OF THE REGISTRATION STATEMENT.
(a) Amendment to Include Holder. EPL shall within thirty (30)
business days from the date of this Agreement file with the U.S. Securities and
Exchange Commission an amendment to the Registration Statement (the
"Amendment"). The Amendment shall amend the list of Selling Shareholders
identified in the Registration Statement to include the Holder. EPL shall notify
the Holder when the Amendment is filed with the SEC (pursuant to Rule 424(b)(3)
under the 1933 Act, the Amendment will be effective on the date of its filing)
and shall furnish the Holder with a copy thereof or notify the Holder when the
Amendment is available on EDGAR (www.sec.gov).
(b) Sales of Conversion Shares Under the Registration
Statement. The Holder acknowledges that it (he/she) cannot, and the Holder will
not, sell any of the Conversion
-3-
<PAGE>
Shares covered by the Registration Statement unless and until the Amendment is
effective. Any sales of the Conversion Shares under the Registration Statement
and Amendment shall be made in strict compliance therewith, including, without
limitation, the prospectus delivery requirements as set forth therein and under
the 1933 Act.
6. GOVERNING LAW; MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed in the Commonwealth of
Pennsylvania (without regard to principles of conflict of laws). Both parties
irrevocably consent to the jurisdiction of the United States federal courts and
the state courts located in Pennsylvania with respect to any suit or proceeding
based on or arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby and
irrevocable agree that all claims in respect of such suit or proceeding may be
determined in such courts. Both parties irrevocably waive the defense of an
inconvenient forum to the maintenance of such suit or proceeding. Both parties
further agree that service of process upon a party mailed by first class mail
shall be deemed in every respect effective service of process upon the party in
any such suit or proceeding. Nothing herein shall affect either party's right to
serve process in any other manner permitted by law. Both parties agree that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.
(b) Counterparts; Signatures by Facsimile. This Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. Agreement, once executed
by a party, may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither EPL nor the Holder makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.
(f) Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered
-4-
<PAGE>
personally or by courier (including a recognized overnight delivery services) or
by facsimile and shall be effective five days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If to EPL:
EPL Technologies, Inc.
2 International Plaza, Suite 245
Philadelphia, Pennsylvania 11913
Attention: Paul L. Devine, President
Facsimile: 610-521-5985
If to Holder:
GHM, Inc.
74 Trinity Place
New York, New York 10006
Facsimile:____________________
Each party shall provide notice to the other party of any
change in address.
(g) Successors and Assigns. This agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither EPL nor the Holder shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
(h) Third Party Beneficiaries. This agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any other person hereof enforce
any provision
(i) Publicity. Neither EPL nor the Holder shall issue any
press release or make any public statement concerning this Agreement and the
transactions contemplated hereby without the prior approval of the other party,
except as otherwise required by law, including any securities law.
(j) Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
-5-
<PAGE>
(l) Remedies. Each of the parties acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the other
party by vitiating the intent and purpose of the transactions contemplated
hereby. Accordingly, each such party acknowledges that the remedy at law for a
breach of its obligations under this Agreement will be inadequate and agrees, in
the event of a breach or threatened breach by such party of the provisions of
this Agreement, that the non-breaching party shall be entitled, in addition to
all other available remedies in law or in equity, to an injunction or
injunctions to prevent or cure any breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions of this Agreement, without
the necessity of showing economic loss and without any bond or other security
being required.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Holder and EPL have caused this Agreement to be
duly executed as of the date first above written.
GHM, INC.
By:__________________________
Name:
Title:
EPL TECHNOLOGIES, INC.
By:____________________________
Name: Paul L. Devine
Title: President and Chief Executive Officer
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<PAGE>
EXHIBIT C
NOTICE OF CONVERSION
(To be Executed by the Holder In order to Convert the Series D Preferred Stock)
The undersigned hereby irrevocably elects to convert shares of
Series D Preferred Stock, represented by stock certificate No(s). (the
"Preferred Stock Certificates") into shares of common stock ("Common Stock") of
EPL Technologies, Inc. (the "Corporation") according to the conditions of the
Certificate of Designation of Series D preferred Stock, as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herein such certificates. No fee will be charged to
the holder for any conversion, except for transfer taxes, if any. A copy of each
Preferred Stock Certificate is attached hereto (or evidence of loss, theft or
destruction thereof).
The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Series D Preferred Stock shall be made pursuant to
registration of the securities under the Securities Act of 1933, as amended (the
"Act"), or pursuant to an exemption from registration under the Act.
Date of Conversion:___________________________________________
Market Price Days:____________________________________________
Applicable Conversion Price:__________________________________
Number of Shares of
Common Stock to be Issued:____________________________________
Number of Premium Shares
Included in Number of Shares
Of Common Stock to be Issued:_________________________________
Signature:____________________________________________________
Name:_________________________________________________________
Address:______________________________________________________
*The Corporation is not required to issue shares of Common Stock until the
original Series D Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Corporation or the
Transfer Agent. The Corporation shall issue and deliver shares of Common Stock
to an overnight courier not later than three (3) business days following receipt
of the original Preferred Stock Certificate(s) to be converted, and shall make
payments pursuant to the Certificate of Designation for the number of business
days such issuance and delivery is late.
-8-
Exhibit 8
SECURITIES CONVERSION AGREEMENT
SECURITIES CONVERSION AGREEMENT (this "Agreement") dated as of December
9, 1999 by and among EPL Technologies, Inc., a Colorado corporation with
headquarters located at 2 International Plaza, Suite 245, Philadelphia, PA
19113-1507 ("EPL") and Joseph Giamanco (the "Holder").
WHEREAS, the Holder pursuant to a Securities Purchase Agreement dated
as of the date hereof (the "Purchase Agreement") purchased from either RGC
International Investors, LDC or Halifax Fund, L.P. ("Seller") 162 shares of
Series D Convertible Preferred Stock (the "Preferred Stock") (the Purchase
Agreement is attached hereto as Exhibit A);
WHEREAS, the preferences and rights of the Preferred Stock are set
forth in the Certificate of Designation of EPL attached hereto as Exhibit B (the
"Certificate"), which forms a part of EPL's Articles of Incorporation, as
amended.
WHEREAS, the Holder, pursuant to the Certificate and this Agreement,
wishes to convert the Preferred Stock into EPL's common stock, par value $.001
per share (the "Common Stock").
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, EPL and the Holder hereby agree as follows:
1. CERTAIN DEFINITIONS. Except as otherwise provided herein, the
capitalized terms used in this Agreement shall have the meanings ascribed to
them in either the Purchase Agreement or the Certificate.
2. CONVERSION OF PREFERRED STOCK
(a) Notice of Conversion. The Holder hereby gives EPL notice
that as of the date hereof it intends to convert all of the Preferred Stock
owned both of record and beneficially into the shares of Common Stock is
issuable pursuant to the Certificate. Such conversion shall be effected pursuant
to the delivery by the Holder to EPL of Notice of Conversion in the form
attached to this Agreement as Exhibit C.
(b) Number of Shares of Common Stock. The Holder: (i)
acknowledges and agrees that the number of shares of Common Stock into which the
Preferred Stock shall be converted (the "Conversion Shares") has been calculated
pursuant to the Certificate; Holder (ii) represents that it (he/she) has read,
is fully familiar with and understands the Certificate in all respects
(including, without limitation, the optional conversion provisions included in
Article VI thereof); and (iii) agrees in all respects with the calculation of
the Conversion Shares (including the Premium Amount) set forth in Exhibit C.
(c) Premium Amount. Holder agrees that upon the conversion of
the Preferred Stock, Holder will contribute to EPL that number of Conversion
Shares equal to the
<PAGE>
Premium Amount set forth in Exhibit C as an additional contribution to capital
by the Holder, to be held by EPL as treasury shares pursuant to the Colorado
Business Corporation Act. With respect to such contribution to capital, the
Holder agrees that upon the conversion of the Preferred Stock, EPL may retain in
its treasury the amount of Conversion Shares equal to the Premium Amount.
(d) Delivery of Conversion Shares. The Conversion Shares shall
be delivered by EPL to the Holder within the time periods and otherwise in
accordance with the provisions of Article VI E(b) and (c) of the Certificate.
(e) Terms of Certificate Shall Control. Except as expressly
otherwise provided in this Agreement, the terms and conditions of the
Certificate shall govern the conversion of the Preferred Stock hereunder.
3. HOLDER'S REPRESENTATIONS AND WARRANTIES. The Holder represents and
warrants to EPL that:
(a) Authorization; Enforcement. The Holder has all requisite
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
authorized by all necessary corporate, partnership, LLC or individual action by
the Holder. This Agreement has been duly executed and delivered on behalf of the
Holder, and this Agreement constitutes valid and binding agreements of the
Holder enforceable in accordance with its terms.
(b) Information; Acknowledgment of Risk. EPL has furnished the
Holder with EPL's Form 10K for the year ended December 31, 1998, EPL's 1999
Proxy Statement, each Form 10-Q, 8-K or any other filing made by EPL during the
year 1999 (through the date hereof) pursuant to the filing and disclosure
requirements of the Securities Exchange Act of 1934 (the "1934 Act") (the
foregoing documents shall collectively be referred to herein as the "Current
1934 Act Filings"). EPL has also provided the Holder with the Registration
Statement on Form S-3 (the "Registration Statement") covering the Conversion
Shares. Holder acknowledges that Holder has had access to all other 1934 Act
filings made by EPL since it registered its Common Stock under Section 12(g) of
the 1934 Act (the "1934 Act Filings"). Holder has read and examined the Current
1934 Act Filings (and such of the 1934 Act Filings, if any, that it (he/she) has
deemed advisable) and the Registration Statement and fully understands the same.
Holder has made the decision to enter into this Agreement and to consummate the
transactions contemplated hereby (including, without limitation, the conversion
of the Preferred Stock into the Conversion Shares and the contribution to EPL of
Conversion Shares equal to the Premium Amount) on the basis of such examination
and understanding. On the basis of such examination and understanding the Holder
fully understands that its decision to convert the Preferred Stock into
Conversion Shares involves a significant degree of risk including the risk
factors set forth in the Registration Statement. The Holder is a sophisticated
investor with considerable experience in investments of this nature. Except for
the representations and warranties of EPL set forth in Section 4 below, the
Holder acknowledges that EPL makes no representations or warranties with respect
to either the Preferred Shares, the Conversion Shares, or the Common Stock of
EPL in general. In making its (his/her) decision to enter into this Agreement
and to convert the Preferred Shares into the Conversion Shares, the Holder has
in no way relied on upon any
-2-
<PAGE>
statement made by EPL, its officers, directors, employees or agents or any
company information provided by EPL except the Current 1934 Act Filings, the
1934 Act Filings (to the extent examined by the Holder) and the Registration
Statement. With full recognition of the foregoing, the Holder wishes to convert
the Preferred Stock to the Conversion Shares on the terms set forth herein.
(c) Investment Representations. The holder is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933 (the "1933 Act"). As of the date hereof, the
Holder intends to hold the Conversion Shares delivered to it (him/her) pursuant
to the terms and conditions of this Agreement for its (his/her) account and not
with a present view toward the public sale or distribution thereof, except (i)
pursuant to the Registration Statement (in accordance with the provisions of
Section 5 below) or (ii) sales exempt under the 1933 Act.
(d) Reliance on Exemptions. The Holder understands that the
Conversion Shares are being delivered to it (he/she) in reliance upon specific
exemptions from the registration requirements of the United States federal and
state securities laws and that EPL is relying upon the truth and accuracy of,
and the Holder's compliance with, the representations, warranties, agreements,
acknowledgments, and understandings of the Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of the Holder
to acquire the Conversion Shares.
4. REPRESENTATIONS AND WARRANTIES OF EPL. EPL represents and warrants
to the Holder that:
(a) Authorization; Enforcement. EPL has all requisite power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized by all requisite corporate action. This Agreement has been duly
executed and delivered on behalf of EPL, and this Agreement constitutes valid
and binding agreements of EPL enforceable in accordance with its terms.
(b) The Conversion Shares. Upon their issuance in accordance
with the Certificate and this Agreement, the Conversion Shares shall be fully,
paid and non-assessable shares of Common Stock and shall be free from all taxes,
liens, claims and encumbrances.
5. AMENDMENT OF THE REGISTRATION STATEMENT.
(a) Amendment to Include Holder. EPL shall within thirty (30)
business days from the date of this Agreement file with the U.S. Securities and
Exchange Commission an amendment to the Registration Statement (the
"Amendment"). The Amendment shall amend the list of Selling Shareholders
identified in the Registration Statement to include the Holder. EPL shall notify
the Holder when the Amendment is filed with the SEC (pursuant to Rule 424(b)(3)
under the 1933 Act, the Amendment will be effective on the date of its filing)
and shall furnish the Holder with a copy thereof or notify the Holder when the
Amendment is available on EDGAR (www.sec.gov).
(b) Sales of Conversion Shares Under the Registration
Statement. The Holder acknowledges that it (he/she) cannot, and the Holder will
not, sell any of the Conversion
-3-
<PAGE>
Shares covered by the Registration Statement unless and until the Amendment is
effective. Any sales of the Conversion Shares under the Registration Statement
and Amendment shall be made in strict compliance therewith, including, without
limitation, the prospectus delivery requirements as set forth therein and under
the 1933 Act.
6. GOVERNING LAW; MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed in the Commonwealth of
Pennsylvania (without regard to principles of conflict of laws). Both parties
irrevocably consent to the jurisdiction of the United States federal courts and
the state courts located in Pennsylvania with respect to any suit or proceeding
based on or arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby and
irrevocable agree that all claims in respect of such suit or proceeding may be
determined in such courts. Both parties irrevocably waive the defense of an
inconvenient forum to the maintenance of such suit or proceeding. Both parties
further agree that service of process upon a party mailed by first class mail
shall be deemed in every respect effective service of process upon the party in
any such suit or proceeding. Nothing herein shall affect either party's right to
serve process in any other manner permitted by law. Both parties agree that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.
(b) Counterparts; Signatures by Facsimile. This Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. Agreement, once executed
by a party, may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither EPL nor the Holder makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.
(f) Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered
-4-
<PAGE>
personally or by courier (including a recognized overnight delivery services) or
by facsimile and shall be effective five days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If to EPL:
EPL Technologies, Inc.
2 International Plaza, Suite 245
Philadelphia, Pennsylvania 11913
Attention: Paul L. Devine, President
Facsimile: 610-521-5985
If to Holder:
Joseph Giamanco
74 Trinity Place
New York, New York 10006
Facsimile:____________________
Each party shall provide notice to the other party of any
change in address.
(g) Successors and Assigns. This agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither EPL nor the Holder shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
(h) Third Party Beneficiaries. This agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any other person hereof enforce
any provision
(i) Publicity. Neither EPL nor the Holder shall issue any
press release or make any public statement concerning this Agreement and the
transactions contemplated hereby without the prior approval of the other party,
except as otherwise required by law, including any securities law.
(j) Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
-5-
<PAGE>
(l) Remedies. Each of the parties acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the other
party by vitiating the intent and purpose of the transactions contemplated
hereby. Accordingly, each such party acknowledges that the remedy at law for a
breach of its obligations under this Agreement will be inadequate and agrees, in
the event of a breach or threatened breach by such party of the provisions of
this Agreement, that the non-breaching party shall be entitled, in addition to
all other available remedies in law or in equity, to an injunction or
injunctions to prevent or cure any breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions of this Agreement, without
the necessity of showing economic loss and without any bond or other security
being required.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Holder and EPL have caused this Agreement to be
duly executed as of the date first above written.
_____________________________
JOSEPH GIAMANCO
_____________________________
EPL TECHNOLOGIES, INC.
By:___________________________
Name: Paul L. Devine
Title: President and Chief Executive Officer
-7-
<PAGE>
EXHIBIT C
NOTICE OF CONVERSION
(To be Executed by the Holder In order to Convert the Series D Preferred Stock)
The undersigned hereby irrevocably elects to convert shares of
Series D Preferred Stock, represented by stock certificate No(s). (the
"Preferred Stock Certificates") into shares of common stock ("Common Stock") of
EPL Technologies, Inc. (the "Corporation") according to the conditions of the
Certificate of Designation of Series D preferred Stock, as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herein such certificates. No fee will be charged to
the holder for any conversion, except for transfer taxes, if any. A copy of each
Preferred Stock Certificate is attached hereto (or evidence of loss, theft or
destruction thereof).
The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Series D Preferred Stock shall be made pursuant to
registration of the securities under the Securities Act of 1933, as amended (the
"Act"), or pursuant to an exemption from registration under the Act.
Date of Conversion:___________________________________________
Market Price Days:____________________________________________
Applicable Conversion Price:__________________________________
Number of Shares of
Common Stock to be Issued:____________________________________
Number of Premium Shares
Included in Number of Shares
Of Common Stock to be Issued:_________________________________
Signature:____________________________________________________
Name:_________________________________________________________
Address:______________________________________________________
*The Corporation is not required to issue shares of Common Stock until the
original Series D Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Corporation or the
Transfer Agent. The Corporation shall issue and deliver shares of Common Stock
to an overnight courier not later than three (3) business days following receipt
of the original Preferred Stock Certificate(s) to be converted, and shall make
payments pursuant to the Certificate of Designation for the number of business
days such issuance and delivery is late.
-8-
Exhibit 9
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED (I) EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) EXCEPT PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO RESTRICTIONS ON SALE AS SET FORTH HEREIN.
No. W-GHM
Void after 5:00 p.m. Eastern Standard Time, on December 9, 2004.
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, GHM, Inc. or its
permitted assigns under the terms hereof ("Holder"), is entitled to purchase,
subject to the provisions of this Warrant, from EPL TECHNOLOGIES, INC., a
Colorado corporation ("Company"), an aggregate of Five Hundred Thousand
(500,000) shares of common stock, par value $0.001 per share, of the Company
(the "Common Stock"), at an exercise price equal to 0.5170 dollars (United
States Dollars $0.5170), per share, for each of such shares of Common Stock
issuable under this Warrant, at any time during the period of December 9, 1999
to December 9, 2004, but not later than 5:00 p.m. Eastern Standard Time, on
December 9, 2004, subject to modification and adjustment as provided herein.
This Warrant is the Warrant referred to in, and is entitled to the benefits of,
that certain Subscription Agreement dated as of December 1, 1999, by and between
GHM, Inc. and the Company (the "Agreement"). The number of shares of Common
Stock to be received upon the exercise of this Warrant and the price to be paid
may be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares" and the exercise price of
a share of Common Stock in effect at any time and as adjusted from time to time
is hereinafter sometimes referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of
subsection (f) hereof, this Warrant may be exercised in whole or in part at any
time or from time to time on or after December 9, 1999 and until December 9,
2004 or, if either such day is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
the Exercise Price, payable via certified or official bank check or wire
transfer payable to the
<PAGE>
Company or its order. If this Warrant should be exercised in part only, and
provided the Warrant shall not have then expired, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant of
like tenor and date evidencing the rights of the Holder thereof to purchase the
balance of the shares purchasable thereunder. Upon receipt by the Company of
this Warrant, accompanied by payment of the Exercise Price for the number of
shares for which this Warrant is being exercised, at its office, or by the stock
transfer agent of the Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise immediately prior to the close of business on the
date of such exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder; provided,
however, that if on such date the transfer books for the Common Stock shall be
closed, the certificates for the shares or other securities in respect of which
the Warrant has been exercised shall be issuable on the date on which such books
shall next be opened, and until such date, the Company shall be under no
obligation to deliver any certificates for such shares or other securities.
The Company covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(b) Reservation of Shares. The Company hereby agrees
that at all times there shall
be reserved for issuance and/or delivery upon exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall round up such fraction to the next whole number of
shares.
(d) Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft or destruction
of this warrant and of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time be enforceable by anyone. This Warrant shall
not be transferable upon the transfer books of the Company with respect to
record ownership of this Warrant or the Warrant Shares until and unless any such
proposed transferee executes and delivers to the Company, in writing,
representations and warranties of the Holder under this Warrant comparable to
those set
-2-
<PAGE>
forth in paragraph (I) below and delivers to the Company an opinion of counsel,
satisfactory to the Company in its sole discretion, both as to the issuer of the
opinion and the substance of such opinion, that such transfer does not require
registration under the Securities Act and that such transfer is exempt from any
such registration under the Securities Act or any applicable state securities
laws.
(e) Rights of the Holder. The Holder shall not, by
virtue of holding this Warrant prior to any exercise of this Warrant, be
entitled to any rights of a shareholder in the Company either at law or equity,
including without limitation the right to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the Warrant, for any purpose whatsoever, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein until such Holder shall have
exercised the Warrant and been issued shares of Common Stock in accordance with
the provisions hereof.
(f) Anti-Dilution Provisions. The Exercise Price and
the number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time, but only upon the occurrence
of any of the events as hereinafter provided:
(i) In the event the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, the
Exercise Price then in effect shall be proportionately decreased, effective at
the close of business on the record date for the determination of stockholders
entitled to receive the same (it being understood that any issuance of Common
Stock as a dividend on any class of the Company's preferred stock shall have no
effect on the Exercise Price);
(ii) In the event the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, by reclassification
or otherwise, the Exercise Price then in effect shall be proportionately
decreased or increased, as the case may be, effective immediately after the
effective date of such subdivision or combination; and
(iii) If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of each Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the shares of the
Common Stock of the Company purchasable and receivable upon the exercise of the
rights represented by such Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock purchasable and receivable upon the exercise of the rights represented by
such Warrant had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such reorganization, reclassification,
consolidation, merger or sale, appropriate provision shall be made with respect
to the rights and interests of the Holder to the end that the provisions of the
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<PAGE>
Warrant (including, without limitation, provisions for adjustment of the
Exercise Price and of the number of shares issuable upon the exercise of the
Warrants) shall thereafter be applicable as nearly as may be in relation to any
shares of stock, securities, or assets thereafter deliverable upon exercise of
stock, securities, or assets thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such consolidation, merger or sale, unless
prior to or simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume, by written
instrument, the obligation to deliver to the Holder such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase.
(iv) Upon each adjustment of the Exercise Price
pursuant to this Section (f), the number of shares of Common Stock specified in
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share of Common
Stock) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of such Warrant and dividing the product
so obtained by the Exercise Price in effect after such adjustment.
(v) Irrespective of any adjustments of the number
or kind of securities issuable upon exercise of Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number of shares of Common Stock and Exercise Price as are stated in similar
Warrants previously issued.
(vi) The Company may retain the independent public
auditing firm regularly retained by the Company, or another firm of independent
public auditors of nationally recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f).
(vii) Whenever there is an adjustment in the
Exercise Price or in the number or kind of securities issuable upon exercise of
the Warrants, or both, as provided in this Section (f), the Company shall (A)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of each Warrant after such adjustment; and (B) cause a notice stating
that such adjustment has been effected and the Exercise Price then in effect and
the number and kind of securities issuable upon exercise of each Warrant to be
sent to each registered holder of a Warrant.
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<PAGE>
(viii) If an event occurs which is similar in
nature to the events described in this Section (f), but is not expressly covered
hereby, the Board of Directors of the Company shall make or arrange for an
equitable adjustment to the number of shares of Common Stock issuable pursuant
hereto and the Exercise Price. The Company further agrees, as a general matter,
(I) that it will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observation of performance of
any of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company, (ii) promptly to take all action as may from time to
time be required in order to permit the Holder to exercise this Warrant and the
Company duly and effectively to issue shares of its Common Stock or other
securities as provided herein upon the exercise hereof, and (iii) promptly to
take all action required or provided for herein to protect the rights of the
Holder granted hereunder against dilution.
(g) Notices To Warrant Holders. So long as this Warrant
shall be outstanding, (I) if the Company shall offer to the holders of the
Common Stock for subscription or purchase by them any share of any class or any
other rights or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all or the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record date is to be fixed for the purpose of such rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding upon.
(h) Governing Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
(i) Representations and Warranties of the Holder.
The Holder hereby represents and warrants to the
Company, intending that the Company rely on such representations and warranties
in issuing the Warrant and any Warrant Shares to the Holder, as follows:
(A) The Holder is an "accredited investor"
as defined under the rules and regulations under the Securities Act and is a
sophisticated investor who is fully familiar with the nature of the Company's
business or, that the Company has previously acknowledged in writing to the
Holder that the Holder need not be an "accredited investor."
-5-
<PAGE>
(B) The Holder understands that the Warrants
and the Warrant Shares have not been and will not, in connection with the
issuance of the Warrant to the Holder, be registered under the Securities Act,
are subject to substantial restrictions on transfer as set forth herein and may
not be sold or transferred absent such registration unless the Holder provides
the Company with an opinion of counsel which is satisfactory to the Company
(both as to the issuer of the opinion and the form and substance thereof) that
the Warrant or the Warrant Shares proposed to be transferred may be transferred
in reliance on an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws.
(C) The Holder represents and warrants that
it is acquiring the Warrant for its own account, as principal, for investment
only and not with a view to resale or distribution and that it will not sell or
otherwise transfer any of the Warrant or the Warrant Shares, except in
accordance with applicable securities laws.
(D) The Holder represents and warrants that
it is able to bear the economic risk of losing its entire investment in the
Warrant and the Warrant Shares.
(E) Holder understands that the Warrant and
the Warrant Shares are being offered and sold in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company and its controlling persons are relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth in this Warrant to determine the applicability of such
exemptions and the suitability of the Holder to acquire the Warrant and the
Warrant Shares.
(F) Holder represents and warrants that the
information set forth in this Warrant concerning the Holder is true and correct.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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<PAGE>
(G) Holder acknowledges and understands the
meaning of the representations made by Holder in this Agreement and hereby
agrees to indemnify and hold harmless the Company and all persons deemed to be
in control of the Company from and against any and all loss, costs, expenses,
damages and liabilities (including, without limitation, court costs and
attorneys' fees) arising out of or due to a breach by the Holder of any such
representations. All representations set forth in subparagraphs (B), (C), (E)
and (G) shall survive the delivery of this Warrant and the purchase by the
Holder of the Warrant and any Warrant Shares.
EPL TECHNOLOGIES, INC.
By__________________________________
Name: Paul L. Devine
Title: President and CEO
Attest:
________________________
Dated: December 9, 1999
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<PAGE>
EPL TECHNOLOGIES, INC.
PURCHASE FORM
Dated:
The undersigned hereby elects to exercise the within Warrant to
the extent of purchasing ___________ shares of Common Stock and hereby delivers
a bank or certified check or wire transfer constituting full payment of the
Exercise Price hereof.
______________________________________________
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<PAGE>
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_________________________________________________________________
(Please type or print in block letters)
Address_______________________________________________________________
______________________________________________________________________
Social Security Number (Employee Identification Number)
______________________________________________________________________
Signature_____________________________________________________________
-9-
Exhibit 10
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED (I) EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) EXCEPT PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO RESTRICTIONS ON SALE AS SET FORTH HEREIN.
No. W-G
Void after 5:00 p.m. Eastern Standard Time, on December 9, 2004.
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, JOSEPH GIAMANCO or
his permitted assigns under the terms hereof ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from EPL TECHNOLOGIES,
INC., a Colorado corporation ("Company"), an aggregate of Five Hundred Thousand
(500,000) shares of common stock, par value $0.001 per share, of the Company
(the "Common Stock"), at an exercise price equal to 0.5170 dollars (United
States Dollars $0.5170), per share, for each of such shares of Common Stock
issuable under this Warrant, at any time during the period of December 9, 1999
to December 9, 2004, but not later than 5:00 p.m. Eastern Standard Time, on
December 9, 2004, subject to modification and adjustment as provided herein.
This Warrant is the Warrant referred to in, and is entitled to the benefits of,
that certain Subscription Agreement dated as of December 1, 1999, by and between
Joseph Giamanco and the Company (the "Agreement"). The number of shares of
Common Stock to be received upon the exercise of this Warrant and the price to
be paid may be adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant Shares" and the exercise
price of a share of Common Stock in effect at any time and as adjusted from time
to time is hereinafter sometimes referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of
subsection (f) hereof, this Warrant may be exercised in whole or in part at any
time or from time to time on or after December 9, 1999 and until December 9,
2004 or, if either such day is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
the
<PAGE>
Exercise Price, payable via certified or official bank check or wire transfer
payable to the Company or its order. If this Warrant should be exercised in part
only, and provided the Warrant shall not have then expired, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant of like tenor and date evidencing the rights of the Holder thereof to
purchase the balance of the shares purchasable thereunder. Upon receipt by the
Company of this Warrant, accompanied by payment of the Exercise Price for the
number of shares for which this Warrant is being exercised, at its office, or by
the stock transfer agent of the Company at its office, in proper form for
exercise, the Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise immediately prior to the close of
business on the date of such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the Holder;
provided, however, that if on such date the transfer books for the Common Stock
shall be closed, the certificates for the shares or other securities in respect
of which the Warrant has been exercised shall be issuable on the date on which
such books shall next be opened, and until such date, the Company shall be under
no obligation to deliver any certificates for such shares or other securities.
The Company covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(b) Reservation of Shares. The Company hereby agrees
that at all times there shall be reserved for issuance and/or delivery upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance and delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall round up such fraction to the next whole number of
shares.
(d) Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft or destruction
of this warrant and of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time be enforceable by anyone. This Warrant shall
not be transferable upon the transfer books of the Company with respect to
record ownership of this Warrant or the Warrant Shares until and unless any such
proposed transferee executes and delivers to the Company, in writing,
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<PAGE>
representations and warranties of the Holder under this Warrant comparable to
those set forth in paragraph (I) below and delivers to the Company an opinion of
counsel, satisfactory to the Company in its sole discretion, both as to the
issuer of the opinion and the substance of such opinion, that such transfer does
not require registration under the Securities Act and that such transfer is
exempt from any such registration under the Securities Act or any applicable
state securities laws.
(e) Rights of the Holder. The Holder shall not, by
virtue of holding this Warrant prior to any exercise of this Warrant, be
entitled to any rights of a shareholder in the Company either at law or equity,
including without limitation the right to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the Warrant, for any purpose whatsoever, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein until such Holder shall have
exercised the Warrant and been issued shares of Common Stock in accordance with
the provisions hereof.
(f) Anti-Dilution Provisions. The Exercise Price and
the number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time, but only upon the occurrence
of any of the events as hereinafter provided:
(i) In the event the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, the
Exercise Price then in effect shall be proportionately decreased, effective at
the close of business on the record date for the determination of stockholders
entitled to receive the same (it being understood that any issuance of Common
Stock as a dividend on any class of the Company's preferred stock shall have no
effect on the Exercise Price);
(ii) In the event the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, by reclassification
or otherwise, the Exercise Price then in effect shall be proportionately
decreased or increased, as the case may be, effective immediately after the
effective date of such subdivision or combination; and
(iii) If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of each Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the shares of the
Common Stock of the Company purchasable and receivable upon the exercise of the
rights represented by such Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock purchasable and receivable upon the exercise of the rights represented by
such Warrant had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such reorganization, reclassification,
consolidation, merger or sale, appropriate provision shall be made with
-3-
<PAGE>
respect to the rights and interests of the Holder to the end that the provisions
of the Warrant (including, without limitation, provisions for adjustment of the
Exercise Price and of the number of shares issuable upon the exercise of the
Warrants) shall thereafter be applicable as nearly as may be in relation to any
shares of stock, securities, or assets thereafter deliverable upon exercise of
stock, securities, or assets thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such consolidation, merger or sale, unless
prior to or simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume, by written
instrument, the obligation to deliver to the Holder such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase.
(iv) Upon each adjustment of the Exercise Price
pursuant to this Section (f), the number of shares of Common Stock specified in
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share of Common
Stock) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of such Warrant and dividing the product
so obtained by the Exercise Price in effect after such adjustment.
(v) Irrespective of any adjustments of the number
or kind of securities issuable upon exercise of Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number of shares of Common Stock and Exercise Price as are stated in similar
Warrants previously issued.
(vi) The Company may retain the independent public
auditing firm regularly retained by the Company, or another firm of independent
public auditors of nationally recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f).
(vii) Whenever there is an adjustment in the
Exercise Price or in the number or kind of securities issuable upon exercise of
the Warrants, or both, as provided in this Section (f), the Company shall (A)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of each Warrant after such adjustment; and (B) cause a notice stating
that such adjustment has been effected and the Exercise Price then in effect and
the number and kind of securities issuable upon exercise of each Warrant to be
sent to each registered holder of a Warrant.
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<PAGE>
(viii) If an event occurs which is similar in
nature to the events described in this Section (f), but is not expressly covered
hereby, the Board of Directors of the Company shall make or arrange for an
equitable adjustment to the number of shares of Common Stock issuable pursuant
hereto and the Exercise Price. The Company further agrees, as a general matter,
(I) that it will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observation of performance of
any of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company, (ii) promptly to take all action as may from time to
time be required in order to permit the Holder to exercise this Warrant and the
Company duly and effectively to issue shares of its Common Stock or other
securities as provided herein upon the exercise hereof, and (iii) promptly to
take all action required or provided for herein to protect the rights of the
Holder granted hereunder against dilution.
(g) Notices To Warrant Holders. So long as this Warrant
shall be outstanding, (I) if the Company shall offer to the holders of the
Common Stock for subscription or purchase by them any share of any class or any
other rights or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all or the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record date is to be fixed for the purpose of such rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding upon.
(h) Governing Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
(i) Representations and Warranties of the Holder.
The Holder hereby represents and warrants to the
Company, intending that the Company rely on such representations and warranties
in issuing the Warrant and any Warrant Shares to the Holder, as follows:
(A) The Holder is an "accredited investor" as
defined under the rules and regulations under the Securities Act and is a
sophisticated investor who is fully familiar with the nature of the Company's
business or, that the Company has previously acknowledged in writing to the
Holder that the Holder need not be an "accredited investor."
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<PAGE>
(B) The Holder understands that the Warrants and
the Warrant Shares have not been and will not, in connection with the issuance
of the Warrant to the Holder, be registered under the Securities Act, are
subject to substantial restrictions on transfer as set forth herein and may not
be sold or transferred absent such registration unless the Holder provides the
Company with an opinion of counsel which is satisfactory to the Company (both as
to the issuer of the opinion and the form and substance thereof) that the
Warrant or the Warrant Shares proposed to be transferred may be transferred in
reliance on an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws.
(C) The Holder represents and warrants that it is
acquiring the Warrant for its own account, as principal, for investment only and
not with a view to resale or distribution and that it will not sell or otherwise
transfer any of the Warrant or the Warrant Shares, except in accordance with
applicable securities laws.
(D) The Holder represents and warrants that it is
able to bear the economic risk of losing its entire investment in the Warrant
and the Warrant Shares.
(E) Holder understands that the Warrant and the
Warrant Shares are being offered and sold in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company and its controlling persons are relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth in this Warrant to determine the applicability of such
exemptions and the suitability of the Holder to acquire the Warrant and the
Warrant Shares.
(F) Holder represents and warrants that the
information set forth in this Warrant concerning the Holder is true and correct.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
-6-
<PAGE>
(G) Holder acknowledges and understands the meaning
of the representations made by Holder in this Agreement and hereby agrees to
indemnify and hold harmless the Company and all persons deemed to be in control
of the Company from and against any and all loss, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the Holder of any such representations. All
representations set forth in subparagraphs (B), (C), (E) and (G) shall survive
the delivery of this Warrant and the purchase by the Holder of the Warrant and
any Warrant Shares.
EPL TECHNOLOGIES, INC.
By________________________________
Name: Paul L. Devine
Title: President and CEO
Attest:
________________________
Dated: December 9, 1999
-7-
<PAGE>
EPL TECHNOLOGIES, INC.
PURCHASE FORM
Dated:
The undersigned hereby elects to exercise the within Warrant to
the extent of purchasing ___________ shares of Common Stock and hereby delivers
a bank or certified check or wire transfer constituting full payment of the
Exercise Price hereof.
___________________________________________________
-8-
<PAGE>
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name______________________________________________________
(Please type or print in block letters)
Address___________________________________________________
__________________________________________________________
Social Security Number (Employee Identification Number)
__________________________________________________________
Signature_________________________________________________
-9-
Exhibit 11
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED (I) EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) EXCEPT PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO RESTRICTIONS ON SALE AS SET FORTH HEREIN.
No. W-GHM-2
Void after 5:00 p.m. Eastern Standard Time, on December 9, 2004.
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, GHM, INC. or its
permitted assigns under the terms hereof ("Holder"), is entitled to purchase,
subject to the provisions of this Warrant, from EPL TECHNOLOGIES, INC., a
Colorado corporation ("Company"), an aggregate of Five Hundred Thousand
(500,000) shares of common stock, par value $0.001 per share, of the Company
(the "Common Stock"), at an exercise price equal to 0.5170 dollars (United
States Dollars $0.5170), per share, for each of such shares of Common Stock
issuable under this Warrant, at any time during the period of December 9, 1999
to December 9, 2004, but not later than 5:00 p.m. Eastern Standard Time, on
December 9, 2004, subject to modification and adjustment as provided herein. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of
subsection (f) hereof, this Warrant may be exercised in whole or in part at any
time or from time to time on or after December 9, 1999 and until December 9,
2004 or, if either such day is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
the Exercise Price, payable via certified or official bank check or wire
transfer payable to the Company or its order. If this Warrant should be
exercised in part only, and provided the
<PAGE>
Warrant shall not have then expired, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant of like tenor and
date evidencing the rights of the Holder thereof to purchase the balance of the
shares purchasable thereunder. Upon receipt by the Company of this Warrant,
accompanied by payment of the Exercise Price for the number of shares for which
this Warrant is being exercised, at its office, or by the stock transfer agent
of the Company at its office, in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise immediately prior to the close of business on the date of such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder; provided, however, that if
on such date the transfer books for the Common Stock shall be closed, the
certificates for the shares or other securities in respect of which the Warrant
has been exercised shall be issuable on the date on which such books shall next
be opened, and until such date, the Company shall be under no obligation to
deliver any certificates for such shares or other securities.
The Company covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(b) Reservation of Shares. The Company hereby agrees
that at all times there shall
be reserved for issuance and/or delivery upon exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall round up such fraction to the next whole number of
shares.
(d) Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft or destruction
of this warrant and of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time be enforceable by anyone. This Warrant shall
not be transferable upon the transfer books of the Company with respect to
record ownership of this Warrant or the Warrant Shares until and unless any such
proposed transferee executes and delivers to the Company, in writing,
representations and warranties of the Holder under this Warrant comparable to
those set forth in paragraph (I) below and delivers to the Company an opinion of
counsel, satisfactory
-2-
<PAGE>
to the Company in its sole discretion, both as to the issuer of the opinion and
the substance of such opinion, that such transfer does not require registration
under the Securities Act and that such transfer is exempt from any such
registration under the Securities Act or any applicable state securities laws.
(e) Rights of the Holder. The Holder shall not, by
virtue of holding this Warrant prior to any exercise of this Warrant, be
entitled to any rights of a shareholder in the Company either at law or equity,
including without limitation the right to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the Warrant, for any purpose whatsoever, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein until such Holder shall have
exercised the Warrant and been issued shares of Common Stock in accordance with
the provisions hereof.
(f) Anti-Dilution Provisions. The Exercise Price and
the number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time, but only upon the occurrence
of any of the events as hereinafter provided:
(i) In the event the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, the
Exercise Price then in effect shall be proportionately decreased, effective at
the close of business on the record date for the determination of stockholders
entitled to receive the same (it being understood that any issuance of Common
Stock as a dividend on any class of the Company's preferred stock shall have no
effect on the Exercise Price);
(ii) In the event the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, by reclassification
or otherwise, the Exercise Price then in effect shall be proportionately
decreased or increased, as the case may be, effective immediately after the
effective date of such subdivision or combination; and
(iii) If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of each Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the shares of the
Common Stock of the Company purchasable and receivable upon the exercise of the
rights represented by such Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock purchasable and receivable upon the exercise of the rights represented by
such Warrant had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such reorganization, reclassification,
consolidation, merger or sale, appropriate provision shall be made with respect
to the rights and interests of the Holder to the end that the provisions of the
Warrant (including, without limitation, provisions for adjustment of the
Exercise Price and
-3-
<PAGE>
of the number of shares issuable upon the exercise of the Warrants) shall
thereafter be applicable as nearly as may be in relation to any shares of stock,
securities, or assets thereafter deliverable upon exercise of stock, securities,
or assets thereafter deliverable upon exercise of Warrants. The Company shall
not effect any such consolidation, merger or sale, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the Holder such shares of stock, securities, or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase.
(iv) Upon each adjustment of the Exercise Price
pursuant to this Section (f), the number of shares of Common Stock specified in
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share of Common
Stock) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of such Warrant and dividing the product
so obtained by the Exercise Price in effect after such adjustment.
(v) Irrespective of any adjustments of the number
or kind of securities issuable upon exercise of Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number of shares of Common Stock and Exercise Price as are stated in similar
Warrants previously issued.
(vi) The Company may retain the independent public
auditing firm regularly retained by the Company, or another firm of independent
public auditors of nationally recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f).
(vii) Whenever there is an adjustment in the
Exercise Price or in the number or kind of securities issuable upon exercise of
the Warrants, or both, as provided in this Section (f), the Company shall (A)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of each Warrant after such adjustment; and (B) cause a notice stating
that such adjustment has been effected and the Exercise Price then in effect and
the number and kind of securities issuable upon exercise of each Warrant to be
sent to each registered holder of a Warrant. (viii) If an event occurs which is
similar in nature to the events described in this Section (f), but is not
expressly covered hereby, the Board of Directors of the Company shall make or
arrange for an equitable adjustment to the number of shares of Common Stock
issuable pursuant hereto and the Exercise Price. The Company further agrees, as
a general matter, (I) that it will not, by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observation of performance of any
-4-
<PAGE>
of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company, (ii) promptly to take all action as may from time to
time be required in order to permit the Holder to exercise this Warrant and the
Company duly and effectively to issue shares of its Common Stock or other
securities as provided herein upon the exercise hereof, and (iii) promptly to
take all action required or provided for herein to protect the rights of the
Holder granted hereunder against dilution.
(g) Notices To Warrant Holders. So long as this Warrant
shall be outstanding, (I) if the Company shall offer to the holders of the
Common Stock for subscription or purchase by them any share of any class or any
other rights or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all or the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record date is to be fixed for the purpose of such rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding upon.
(h) Demand registration At any time during the term of
the Warrant, the Holder shall have the right, exercisable by written notice to
the Company, (the Demand Registration Request), to have the Company prepare and
file with the Securities and Exchange Commission (the Commission) on one
occasion, at the sole expense of the Company, a Registration Statement on Form
S-3 and such other documents as may be necessary (in the opinion of counsel for
the Company) in order to comply with the provisions of the Act, so as to permit
a public offering of the Warrant Shares.
(i) Incidental Registration Rights If the Company
proposes to file a registration statement with the Commission for a public
offering and sale of any equity securities issued by the Company (other than a
registration statement on Form S-8 or Form S-4, or their successors, or any
other form for a similar limited purpose, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation) at any time and from time to time, it will, prior to such
filing, give written notice to the Holder of its intention to do so and, upon
written request of such Holder given within 20 days after the Company provides
such notice (which request shall state the intended method of disposition of the
Warrant Shares), the Company shall use its best efforts to cause all of the
Warrant Shares which the Company has been requested by the Holder to register
under the Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Holder; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this section without obligation
to any Holder.
-5-
<PAGE>
In connection with any registration under this
section involving an underwriting, the Company shall not be required to include
any Warrant Shares in such registration unless the Holder accepts the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Warrant Shares to be
included in the offering, or to exclude them altogether, then the Company shall
be required to include in the registration only that number of Warrant Shares,
if any, which the managing underwriter believes should be included therein;
provided that no persons or entities other than the Company, the Holder and
persons or entities holding registration rights shall be permitted to include
securities in the offering. If the number of Warrant Shares to be included in
the offering in accordance with the foregoing is less that the total number of
shares which the Holder has requested to be included, then the Holder and other
holders of securities entitled to include them in such registration shall
participate in the registration pro rata based upon their total ownership of
shares of common stock (giving effect to the conversion into shares of common
stock of all securities convertible thereunto). If any Holder would thus be
entitled to include more securities that such Holder requested to be registered,
the excess shall be allocated among other requesting holders pro rata in the
manner described in the preceding sentence. If the Holder disapproves of the
terms of any underwriting, it may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(j) Covenants of the Company with respect to
Registration The Company covenants and agrees as follows:
(A) In connection with any registration of the
Warrant Shares under section (h) hereof, the Company shall file the Registration
Statement on Form S-3 as expeditiously as possible, but in any event no later
than thirty (30) days following the receipt of any demand thereof, shall use its
best efforts to have any such Registration Statement declared effective at the
earliest possible time and shall furnish the Holder such number of prospectuses
as shall reasonably be requested.
(B) The Company shall pay all costs, fees and
expenses in connection with all registration Statements on Form S-3 filed in
relation to the Warrant Shares, including, without limitation, the Company's
legal and accounting fees and printing expenses.
(C) The Company will take all necessary action
which may be required in qualifying or registering the Warrant Shares included
in a Registration Statement on Form S-3.
(D) Any Holder, and its successors and assigns,
shall severally and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim or damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holder, or its
-6-
<PAGE>
successors or assigns, for specific inclusion in such Registration Statement.
(E) Nothing contained in this Agreement shall
be construed as requiring the Holder to exercise his Warrants prior to the
initial filing of any registration statement or the effectiveness thereof.
(k) Governing Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
(l) Representations and Warranties of the Holder.
The Holder hereby represents and warrants to the
Company, intending that the Company rely on such representations and warranties
in issuing the Warrant and any Warrant Shares to the Holder, as follows:
(A) The Holder is an "accredited investor" as
defined under the rules and regulations under the Securities Act and is a
sophisticated investor who is fully familiar with the nature of the Company's
business or, that the Company has previously acknowledged in writing to the
Holder that the Holder need not be an "accredited investor."
(B) The Holder understands that the Warrants and
the Warrant Shares have not been and will not, in connection with the issuance
of the Warrant to the Holder, be registered under the Securities Act, are
subject to substantial restrictions on transfer as set forth herein and may not
be sold or transferred absent such registration unless the Holder provides the
Company with an opinion of counsel which is satisfactory to the Company (both as
to the issuer of the opinion and the form and substance thereof) that the
Warrant or the Warrant Shares proposed to be transferred may be transferred in
reliance on an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws.
(C) The Holder represents and warrants that it is
acquiring the Warrant for its own account, as principal, for investment only and
not with a view to resale or distribution and that it will not sell or otherwise
transfer any of the Warrant or the Warrant Shares, except in accordance with
applicable securities laws.
(D) The Holder represents and warrants that it is
able to bear the economic risk of losing its entire investment in the Warrant
and the Warrant Shares.
(E) Holder understands that the Warrant and the
Warrant Shares are being offered and sold in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company and its controlling persons are relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth in this Warrant to determine the applicability of such
exemptions and the suitability of the Holder to acquire the Warrant and the
Warrant Shares.
-7-
<PAGE>
(F) Holder represents and warrants that the
information set forth in this Warrant concerning the Holder is true and correct.
(G) Holder acknowledges and understands the meaning
of the representations made by Holder in this Agreement and hereby agrees to
indemnify and hold harmless the Company and all persons deemed to be in control
of the Company from and against any and all loss, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the Holder of any such representations. All
representations set forth in subparagraphs (B), (C), (E) and (G) shall survive
the delivery of this Warrant and the purchase by the Holder of the Warrant and
any Warrant Shares.
EPL TECHNOLOGIES, INC.
By______________________________
Name: Paul L. Devine
Title: President and CEO
Attest:
________________________
Dated: December 9, 1999
-8-
<PAGE>
EPL TECHNOLOGIES, INC.
PURCHASE FORM
Dated:
The undersigned hereby elects to exercise the within Warrant to
the extent of purchasing ___________ shares of Common Stock and hereby delivers
a bank or certified check or wire transfer constituting full payment of the
Exercise Price hereof.
______________________________________________
-9-
<PAGE>
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_________________________________________________________
(Please type or print in block letters)
Address______________________________________________________
_____________________________________________________________
Social Security Number (Employee Identification Number)
_____________________________________________________________
Signature____________________________________________________
-10-
Exhibit 12
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED (I) EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) EXCEPT PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO RESTRICTIONS ON SALE AS SET FORTH HEREIN.
No. W-G-2
Void after 5:00 p.m. Eastern Standard Time, on December 9, 2004.
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, JOSEPH GIAMANCO or
its permitted assigns under the terms hereof ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from EPL TECHNOLOGIES,
INC., a Colorado corporation ("Company"), an aggregate of Five Hundred Sixty
Thousand (500,000) shares of common stock, par value $0.001 per share, of the
Company (the "Common Stock"), at an exercise price equal to 0.5170 dollars
(United States Dollars $0.5170), per share, for each of such shares of Common
Stock issuable under this Warrant, at any time during the period of December 9,
1999 to December 9, 2004, but not later than 5:00 p.m. Eastern Standard Time, on
December 9, 2004, subject to modification and adjustment as provided herein. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of
subsection (f) hereof, this Warrant may be exercised in whole or in part at any
time or from time to time on or after December 9, 1999 and until December 9,
2004 or, if either such day is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next succeeding day
which shall not be such a day, by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
the Exercise Price, payable via certified or official bank check or wire
transfer payable to the Company or its order. If this Warrant should be
exercised in part only, and provided the
<PAGE>
Warrant shall not have then expired, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant of like tenor and
date evidencing the rights of the Holder thereof to purchase the balance of the
shares purchasable thereunder. Upon receipt by the Company of this Warrant,
accompanied by payment of the Exercise Price for the number of shares for which
this Warrant is being exercised, at its office, or by the stock transfer agent
of the Company at its office, in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise immediately prior to the close of business on the date of such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder; provided, however, that if
on such date the transfer books for the Common Stock shall be closed, the
certificates for the shares or other securities in respect of which the Warrant
has been exercised shall be issuable on the date on which such books shall next
be opened, and until such date, the Company shall be under no obligation to
deliver any certificates for such shares or other securities.
The Company covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(b) Reservation of Shares. The Company hereby agrees
that at all times there shall be reserved for issuance and/or delivery upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance and delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall round up such fraction to the next whole number of
shares.
(d) Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft or destruction
of this warrant and of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time be enforceable by anyone. This Warrant shall
not be transferable upon the transfer books of the Company with respect to
record ownership of this Warrant or the Warrant Shares until and unless any such
proposed transferee executes and delivers to the Company, in writing,
representations and warranties of the Holder under this Warrant comparable to
those set forth in paragraph (I) below and delivers to the Company an opinion of
counsel, satisfactory
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to the Company in its sole discretion, both as to the issuer of the opinion and
the substance of such opinion, that such transfer does not require registration
under the Securities Act and that such transfer is exempt from any such
registration under the Securities Act or any applicable state securities laws.
(e) Rights of the Holder. The Holder shall not, by
virtue of holding this Warrant prior to any exercise of this Warrant, be
entitled to any rights of a shareholder in the Company either at law or equity,
including without limitation the right to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the Warrant, for any purpose whatsoever, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein until such Holder shall have
exercised the Warrant and been issued shares of Common Stock in accordance with
the provisions hereof.
(f) Anti-Dilution Provisions. The Exercise Price and
the number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time, but only upon the occurrence
of any of the events as hereinafter provided:
(i) In the event the Company shall issue Common
Stock as a dividend upon Common Stock or in payment of a dividend thereon, the
Exercise Price then in effect shall be proportionately decreased, effective at
the close of business on the record date for the determination of stockholders
entitled to receive the same (it being understood that any issuance of Common
Stock as a dividend on any class of the Company's preferred stock shall have no
effect on the Exercise Price);
(ii) In the event the Company shall at any time
subdivide or combine its outstanding shares of Common Stock, by reclassification
or otherwise, the Exercise Price then in effect shall be proportionately
decreased or increased, as the case may be, effective immediately after the
effective date of such subdivision or combination; and
(iii) If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of each Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the shares of the
Common Stock of the Company purchasable and receivable upon the exercise of the
rights represented by such Warrant, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock purchasable and receivable upon the exercise of the rights represented by
such Warrant had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such reorganization, reclassification,
consolidation, merger or sale, appropriate provision shall be made with respect
to the rights and interests of the Holder to the end that the provisions of the
Warrant (including, without limitation, provisions for adjustment of the
Exercise Price and
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of the number of shares issuable upon the exercise of the Warrants) shall
thereafter be applicable as nearly as may be in relation to any shares of stock,
securities, or assets thereafter deliverable upon exercise of stock, securities,
or assets thereafter deliverable upon exercise of Warrants. The Company shall
not effect any such consolidation, merger or sale, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the Holder such shares of stock, securities, or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase.
(iv) Upon each adjustment of the Exercise Price
pursuant to this Section (f), the number of shares of Common Stock specified in
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share of Common
Stock) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of such Warrant and dividing the product
so obtained by the Exercise Price in effect after such adjustment.
(v) Irrespective of any adjustments of the number
or kind of securities issuable upon exercise of Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number of shares of Common Stock and Exercise Price as are stated in similar
Warrants previously issued.
(vi) The Company may retain the independent public
auditing firm regularly retained by the Company, or another firm of independent
public auditors of nationally recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f).
(vii) Whenever there is an adjustment in the
Exercise Price or in the number or kind of securities issuable upon exercise of
the Warrants, or both, as provided in this Section (f), the Company shall (A)
promptly file in the custody of its Secretary or Assistant Secretary a
certificate signed by the Chairman of the Board or the President or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company, showing in detail the facts
requiring such adjustment and the number and kind of securities issuable upon
exercise of each Warrant after such adjustment; and (B) cause a notice stating
that such adjustment has been effected and the Exercise Price then in effect and
the number and kind of securities issuable upon exercise of each Warrant to be
sent to each registered holder of a Warrant.
(viii) If an event occurs which is similar in
nature to the events described in this Section (f), but is not expressly covered
hereby, the Board of Directors of the Company shall make or arrange for an
equitable adjustment to the number of shares of Common Stock issuable pursuant
hereto and the Exercise Price. The Company further agrees, as a general matter,
(I) that it will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observation of performance of
any
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<PAGE>
of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company, (ii) promptly to take all action as may from time to
time be required in order to permit the Holder to exercise this Warrant and the
Company duly and effectively to issue shares of its Common Stock or other
securities as provided herein upon the exercise hereof, and (iii) promptly to
take all action required or provided for herein to protect the rights of the
Holder granted hereunder against dilution.
(g) Notices To Warrant Holders. So long as this Warrant
shall be outstanding, (I) if the Company shall offer to the holders of the
Common Stock for subscription or purchase by them any share of any class or any
other rights or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all or the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record date is to be fixed for the purpose of such rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding upon.
(h) Demand registration At any time during the term of
the Warrant, the Holder shall have the right, exercisable by written notice to
the Company, (the Demand Registration Request), to have the Company prepare and
file with the Securities and Exchange Commission (the Commission) on one
occasion, at the sole expense of the Company, a Registration Statement on Form
S-3 and such other documents as may be necessary (in the opinion of counsel for
the Company) in order to comply with the provisions of the Act, so as to permit
a public offering of the Warrant Shares.
(i) Incidental Registration Rights If the Company
proposes to file a registration statement with the Commission for a public
offering and sale of any equity securities issued by the Company (other than a
registration statement on Form S-8 or Form S-4, or their successors, or any
other form for a similar limited purpose, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation) at any time and from time to time, it will, prior to such
filing, give written notice to the Holder of its intention to do so and, upon
written request of such Holder given within 20 days after the Company provides
such notice (which request shall state the intended method of disposition of the
Warrant Shares), the Company shall use its best efforts to cause all of the
Warrant Shares which the Company has been requested by the Holder to register
under the Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Holder; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this section without obligation
to any Holder.
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<PAGE>
In connection with any registration under this
section involving an underwriting, the Company shall not be required to include
any Warrant Shares in such registration unless the Holder accepts the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Warrant Shares to be
included in the offering, or to exclude them altogether, then the Company shall
be required to include in the registration only that number of Warrant Shares,
if any, which the managing underwriter believes should be included therein;
provided that no persons or entities other than the Company, the Holder and
persons or entities holding registration rights shall be permitted to include
securities in the offering. If the number of Warrant Shares to be included in
the offering in accordance with the foregoing is less that the total number of
shares which the Holder has requested to be included, then the Holder and other
holders of securities entitled to include them in such registration shall
participate in the registration pro rata based upon their total ownership of
shares of common stock (giving effect to the conversion into shares of common
stock of all securities convertible thereunto). If any Holder would thus be
entitled to include more securities that such Holder requested to be registered,
the excess shall be allocated among other requesting holders pro rata in the
manner described in the preceding sentence. If the Holder disapproves of the
terms of any underwriting, it may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(j) Covenants of the Company with respect to
Registration The Company covenants and agrees as follows:
(A) In connection with any registration of the
Warrant Shares under section (h) hereof, the Company shall file the Registration
Statement on Form S-3 as expeditiously as possible, but in any event no later
than thirty (30) days following the receipt of any demand thereof, shall use its
best efforts to have any such Registration Statement declared effective at the
earliest possible time and shall furnish the Holder such number of prospectuses
as shall reasonably be requested.
(B) The Company shall pay all costs, fees and
expenses in connection with all registration Statements on Form S-3 filed in
relation to the Warrant Shares, including, without limitation, the Company's
legal and accounting fees and printing expenses.
(C) The Company will take all necessary action
which may be required in qualifying or registering the Warrant Shares included
in a Registration Statement on Form S-3.
(D) Any Holder, and its successors and assigns,
shall severally and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim or damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holder, or its
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<PAGE>
successors or assigns, for specific inclusion in such Registration Statement.
(E) Nothing contained in this Agreement shall be
construed as requiring the Holder to exercise his Warrants prior to the initial
filing of any registration statement or the effectiveness thereof.
(k) Governing Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
(l) Representations and Warranties of the Holder.
The Holder hereby represents and warrants to the
Company, intending that the Company rely on such representations and warranties
in issuing the Warrant and any Warrant Shares to the Holder, as follows:
(A) The Holder is an "accredited investor" as
defined under the rules and regulations under the Securities Act and is a
sophisticated investor who is fully familiar with the nature of the Company's
business or, that the Company has previously acknowledged in writing to the
Holder that the Holder need not be an "accredited investor."
(B) The Holder understands that the Warrants and
the Warrant Shares have not been and will not, in connection with the issuance
of the Warrant to the Holder, be registered under the Securities Act, are
subject to substantial restrictions on transfer as set forth herein and may not
be sold or transferred absent such registration unless the Holder provides the
Company with an opinion of counsel which is satisfactory to the Company (both as
to the issuer of the opinion and the form and substance thereof) that the
Warrant or the Warrant Shares proposed to be transferred may be transferred in
reliance on an applicable exemption from the registration requirements of the
Securities Act and any other applicable securities laws.
(C) The Holder represents and warrants that it is
acquiring the Warrant for its own account, as principal, for investment only and
not with a view to resale or distribution and that it will not sell or otherwise
transfer any of the Warrant or the Warrant Shares, except in accordance with
applicable securities laws.
(D) The Holder represents and warrants that it is
able to bear the economic risk of losing its entire investment in the Warrant
and the Warrant Shares.
(E) Holder understands that the Warrant and the
Warrant Shares are being offered and sold in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company and its controlling persons are relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth in this Warrant to determine the applicability of such
exemptions and the suitability of the Holder to acquire the Warrant and the
Warrant Shares.
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<PAGE>
(F) Holder represents and warrants that the
information set forth in this Warrant concerning the Holder is true and correct.
(G) Holder acknowledges and understands the meaning
of the representations made by Holder in this Agreement and hereby agrees to
indemnify and hold harmless the Company and all persons deemed to be in control
of the Company from and against any and all loss, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the Holder of any such representations. All
representations set forth in subparagraphs (B), (C), (E) and (G) shall survive
the delivery of this Warrant and the purchase by the Holder of the Warrant and
any Warrant Shares.
EPL TECHNOLOGIES, INC.
By____________________________
Name: Paul L. Devine
Title: President and CEO
Attest:
________________________
Dated: December 9, 1999
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EPL TECHNOLOGIES, INC.
PURCHASE FORM
Dated:
The undersigned hereby elects to exercise the within Warrant to
the extent of purchasing ___________ shares of Common Stock and hereby delivers
a bank or certified check or wire transfer constituting full payment of the
Exercise Price hereof.
_________________________________________________
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name____________________________________________________
(Please type or print in block letters)
Address________________________________________________
_______________________________________________________
Social Security Number (Employee Identification Number)
_______________________________________________________
Signature______________________________________________
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