SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 15, 2000
EPL Technologies, Inc.
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(Exact name of Registrant as specified in Charter)
Colorado 333-42185 84-0990658
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
2 International Plaza, Philadelphia, PA 11913
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number including area code: 610-521-4400
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Between on or about February 28th and March 4, 2000, EPL Technologies,
Inc., in a series of credit transactions (the "Credit Transactions"), borrowed
from individual investors $3,275,000 (collectively, the "Loan"); the term of the
Loan is one year. In connection with the Credit Transactions, the Company issued
warrants to such individual investors (the "Warrants"), each carrying a term of
five years, to purchase an aggregate of 1,637,500 shares of its Common Stock at
an exercise price of $1.00 per share (the "Warrant Offering"). Neither the
Credit Transactions nor the Warrants have been registered under the Securities
Act of 1933, as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
The purpose of the Credit Transactions and Warrant offering was to raise capital
and obtain the Loan. The Company also agreed to provide certain registration
rights with respect to the Warrant Offering.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No. Description
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10.1 Form of Credit Agreement and Schedule of Credit
Agreements
10.2 Form of Warrant and Schedule of Warrants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Registrant
Dated: March 15, 2000 By: /s/ Paul L. Devine
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Name: Paul L. Devine
Title: President and Chief Executive Officer
Exhibit 10.1
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CREDIT AGREEMENT
Dated as of March 2, 2000
by and between
EPL TECHNOLOGIES, INC.
as Borrower,
and
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as Lender
--------------------------
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 2, 2000, between EPL TECHNOLOGIES,
INC., a Colorado corporation ("Borrower") and ____________, individuals with a
mailing address of _______________ (the "Lender").
RECITALS
WHEREAS, the Borrower has requested that Lender make a loan to the
Borrower in the amount of $_____________; and
WHEREAS, the Lender is willing to provide such a loan, on the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements set forth herein, the Borrower and Lender hereby agree as follows:
1. CERTAIN DEFINITIONS
1.1. Defined Terms. Capitalized terms used in this Agreement shall
have the following respective meanings (unless otherwise expressly provided
elsewhere herein):
"Agreement" shall mean this Credit Agreement, including all amendments,
modifications and supplements from time to time hereto and any appendices,
exhibits or schedules to any of the foregoing.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in New York, New York.
"Closing Date" shall mean the date as of which this Agreement is executed
and delivered by the parties hereto.
"Default" shall mean any event which, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall mean an interest rate per annum equal to the then
applicable rate of interest on the Loan plus 1.00% per month during which an
Event of Default continues.
"Event of Default" shall have the meaning set forth in Section 7.1.
"Governmental Authority" shall mean any governmental department,
commission, board, bureau, agency or instrumentality of the United States or of
any state, commonwealth,
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nation, territory, possession, county, parish or municipality, whether now or
hereafter constituted or existing.
"Loan Amount" shall mean the sum of $______________.
"Loan Documents" shall mean this Agreement, the Note, and the Warrant and
any other documents executed in conjunction with this Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity,
court or Governmental Authority.
"Termination Date" shall mean March 2, 2001, or such earlier date upon
which payment of the Loan may be accelerated pursuant to Section 7.2.
2. THE LOAN
2.1 The Loan. Subject to the terms and conditions hereof, Lender
agrees to lend and the Borrower agrees to borrow the Loan Amount (the "Loan").
All Loan proceeds, shall be disbursed to the Borrower or as the Borrower may
direct in a single advance on the Closing Date. The Loan will be evidenced by a
promissory note of the Borrower, in the form annexed hereto as Exhibit A (the
"Note").
2.2. Prepayment. The Loan may be prepaid, in whole or in part, at
any time without premium or penalty.
2.3. Interest on the Loan. The aggregate outstanding principal
amount of the Loan shall bear interest at a fixed rate of ten percent (10.00%)
per annum, determined on the basis of a year of 365 days for the actual number
of days elapsed.
3. PAYMENTS AND MISCELLANEOUS CREDIT PROVISIONS
3.1. Principal and Interest Repayment. On the Termination Date, the
outstanding principal amount of the Loan and all interest on the Loan, shall be
finally due and payable in full.
3.2. Manner of Payment. All payments due or payable under this
Agreement shall be made on the date when due, in lawful money of the United
States of America and in funds immediately available, to Lender at its offices
at the mailing address listed above, or at such other address as Lender may
direct.
3.3. Actions on Non-Business Days. Whenever any payment shall be due
on a Non-Business Day, that payment or delivery may be made on the next
succeeding Business Day.
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3.4. Usury. If, at any time, the rate of interest payable on the
Loan shall be deemed by any Governmental Authority to exceed the maximum rate of
interest permitted by applicable law, then, for such time as such rate would be
deemed excessive, its application shall be suspended and there shall be charged
instead the maximum rate of interest permissible under law on the Loan.
4. WARRANT AGREEMENT
As an inducement to Lender to make the Loan, the Borrower agrees to issue
to Lender on the Closing Date a warrant to purchase _________ shares of its
common stock, par value $.001 per share.; such warrant shall be evidenced by the
form of the Warrant Agreement annexed hereto as Exhibit B.
5. CONDITIONS PRECEDENT
5.1. Conditions to Lender's Obligations under this Agreement.
Notwithstanding any other provision of this Agreement, Lender shall have no
obligations under the Agreement unless and until the Borrower shall have duly
executed and delivered to Lender the Note and Warrant Agreement, each dated as
of the Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF BORROWER
To induce Lender to enter into this Agreement and to make the Loan, the
Borrower makes the following representations and warranties as to itself to
Lender:
6.1. Corporate Existence; Compliance with Law. Borrower (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Colorado; (ii) has the requisite corporate power and authority
and the legal right to own, pledge, mortgage or otherwise encumber and operate
its properties, to lease the property it operates under lease, and to conduct
its business as now, heretofore and proposed to be conducted; and (iii) is in
compliance with its certificate of incorporation and by-laws.
6.2. Corporate Power; Authorization. The execution, delivery and
performance by Borrower of the Loan Documents, to the extent it is party
thereto, (i) are within Borrower's corporate power; (ii) have been duly
authorized by all necessary or proper corporate action; and (iii) are not in
contravention of any provision of Borrower's certificate of incorporation or
by-laws.
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
7.1. Events of Default. The occurrence of any one or more of the
following events (regardless of the cause thereof) shall constitute an "Event of
Default" hereunder:
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(a) Borrower shall fail to make any payment of principal or
interest on the Loan within ten (10) Business Days of the date when due, whether
at maturity or by reason of acceleration pursuant to the terms of this Agreement
or by required prepayment; and
(b) The appointment of a receiver for, assignment for the
benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against the Borrower and any such proceeding, if brought
against the Borrower, shall continue undismissed for ninety (90) days or an
order or decree approving or ordering any of the foregoing shall continue
unstated and in effect.
7.2. Consequences of Default. Upon the occurrence and continuation
of an Event of Default, (i) Lender may declare all amounts payable under the
Note to become immediately due and payable, (ii) the interest rate on the Loan
shall accrue at the Default Rate unless and until the Event of Default has been
cured, (iii) Lender shall be entitled to exercise forthwith and thereafter (to
the extent and in such order and at such time or times as Lender may elect) any
provision of this Agreement or any other Loan Document or that may otherwise be
available to Lender by law.
8. MISCELLANEOUS
8.1. Complete Agreement. The Loan Documents constitute the complete
agreement between the parties with respect to the subject matter hereof and may
not be modified, altered or amended except by an agreement in writing signed by
Borrower and Lender.
8.2 Amendments; Waiver; Consent. No amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan
Document, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender.
8.3. Parties. This Agreement and the other Loan Documents shall be
binding upon, and inure to the benefit of, the successors of Borrower, and the
successors and assigns of Lender; provided, however, Borrower may not assign its
right to borrow under this Agreement.
8.4. Governing Law; Litigation. (a) Except as otherwise expressly
provided in any of the Loan Documents, in all respects, including all matters of
construction, validity and performance, this Agreement and the obligations
arising hereunder shall be governed by, and be construed and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania applicable to
contracts made and performed in such state, without regard to the principles of
conflict of laws.
(b) BORROWER AND LENDER AGREE THAT, IN CONNECTION WITH ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS:
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(i) BORROWER AND LENDER EACH WAIVES THE RIGHT TO TRIAL
BY JURY;
(ii) BORROWER AND LENDER EACH CONSENTS TO THE
JURISDICTION OF ANY COURT OF THE COMMONWEALTH OF PENNSYLVANIA AND OF ANY FEDERAL
COURT LOCATED IN PENNSYLVANIA, AND EACH WAIVES ANY RIGHT TO OBJECT TO SUCH COURT
AS AN INCONVENIENT FORUM; AND
(iii) BORROWER AND LENDER EACH WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING AND AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED MAIL
DIRECTED TO BORROWER AND ITS COUNSEL OR TO LENDER AT THE LOCATIONS PROVIDED FOR
NOTICES TO BORROWER AND LENDER UNDER THIS AGREEMENT OR, IN THE ALTERNATIVE, IN
ANY OTHER FORM OR MANNER PERMITTED BY LAW.
8.5. Notices. Except as otherwise specifically provided this
Agreement, whenever it is provided in this Agreement that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any of the
parties desires to give or serve upon another any communication with respect to
this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either delivered in
person or sent by registered or certified mail, return receipt requested,
postage prepaid, or telecopied and confirmed by telecopy answer back as follows:
(a) If to Lender, at
------------------------
(b) If to the Borrower, at
EPL Technologies, Inc.
2 International Plaza, Suite 245
Philadelphia, Pennsylvania 19113-1507
Attn: Paul L. Devine, President
Telephone: 610-521-4400, Ext. 120
Telecopier: 610-521-1823
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in either case with copies to:
Gibbons, Del Deo, Dolan, Griffinger & Vecchione
125 West 55th Street
New York, New York 10019-5369
Attention: Michael S. Leo, Esq.
Telephone: (212) 649-4700
Telecopier: (212) 333-5980
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
telecopied and confirmed by telecopy answer back or three (3) Business Days
after the same shall have been deposited in the United States mail. Failure or
delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to the persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
8.6. Section Titles. The Section titles contained in this Agreement
are used merely for convenience and shall have no substantive effect in
interpreting this Agreement.
8.7. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
EPL TECHNOLOGIES, INC.
By:
-----------------------------------------
Name: Paul L. Devine
Title: President
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Exhibit A
PROMISSORY NOTE
$_________ March 2, 2000
FOR VALUE RECEIVED, EPL TECHNOLOGIES, INC., a Colorado corporation (the
"Borrower"), promises to pay to the order of __________, (collectively the
"Lender"), at the Lender's office at _______________, or at such other place as
the holder hereof may direct, in lawful money of the United States of America,
the principal amount of _____________, in accordance with the terms of that
certain Credit Agreement, dated as of the date hereof, entered into by Borrower
and Lender (as the same may be amended, modified, increased, supplemented and/or
restated from time to time, the "Loan Agreement"), and Borrower further promises
to pay interest to Lender at such office or other place, in like money, from the
date hereof on the unpaid principal amount hereof from time to time outstanding,
until the unpaid principal amount of this Note is paid in full, at the rate
stated in the Loan Agreement. All terms defined in the Loan Agreement shall have
the same meanings when used herein.
1. Repayment of this Note. The Borrower agrees to pay interest on the
unpaid principal amount outstanding hereunder from time to time from the date
hereof in like money at the Lender's office at the rate and on the dates
specified in the Loan Agreement. The outstanding principal balance of this Note,
and all interest accrued and unpaid thereon, shall be finally due and payable in
full, if not sooner paid, on the Termination Date.
2. Prepayment. The Borrower shall be entitled and required to prepay the
principal of this Note in accordance with the Loan Agreement.
3. Benefits. This Note is the note referred to in Section 2.1 of the Loan
Agreement and Lender and the holder(s) hereof are entitled to the benefits
thereof and may enforce the agreements contained therein and exercise the rights
provided for thereby or otherwise in respect thereof.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note on the
day and year first above-written.
EPL TECHNOLOGIES, INC.
By:
-----------------------------------
Name: Paul L. Devine
Title: President and CEO
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Schedule of Credit Agreements
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Name of Lender Loan Amount Number of Warrant
Shares
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Karen and Bob Ingram $1,000,000 500,000
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Don Giesenger $500,000 250,000
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Jerry Kramer $500,000 250,000
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Seidner Family Trust $500,000 250,000
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Walter Terry $400,000 200,000
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Serena and Richard McCallum $100,000 50,000
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James Rhodes $50,000 25,000
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Peter Leininger $50,000 25,000
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John Merriman $50,000 25,000
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Tom Calcagnini $25,000 12,500
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James Calcagnini $50,000 25,000
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Donald Calcagnini $25,000 12,500
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Tim Collins $25,000 12,500
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Total: $3,275,000 1,637,500
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Exhibit 10.2
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.
Void after 5:00 p.m. Eastern Standard Time, on March 2, 2005
WARRANT TO PURCHASE COMMON STOCK
EPL TECHNOLOGIES, INC.
This is to Certify that, FOR VALUE RECEIVED, __________ 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 ________ shares of common
stock, par value $0.001 per share, of the Company (the "Common Stock"), at an
exercise price equal to one dollar (United States Dollars $1.00), per share, for
each of such shares of Common Stock issuable under this Warrant, at any time
during the period of March 2, 2000 to March 2, 2005, but not later than 5:00
p.m. Eastern Standard Time, on March 2, 2005, 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)(1) Cash Exercise. Subject to the provisions of subsection (f)
hereof, at the option of the Holder, this Warrant may be exercised in whole or
in part at any time or from time to time on or after March 2, 2000, and until
March 2, 2005 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 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
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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.
(a)(2) Cashless Exercise. Subject to the provisions of subsection
(f) hereof, at any time during the period of March 2, 2000 to March 2, 2005, the
Holder may, at its option, exchange this Warrant, in whole or in part (a
"Warrant Exchange"), into the number of shares of Common Stock determined in
accordance with this subsection (a)(2), by surrendering this Warrant at the
principal office of the Company or at the office of its transfer agent,
accompanied by a notice stating such Holder's intent to effect such exchange,
the number of shares of Common Stock to be exchanged and the date on which the
Holder requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant Exchange shall take place on the date specified in the Notice of
Exchange or, if later, the date the Notice of Exchange is received by the
Company (the "Exchange Date"). Certificates for the Warrant shares of Common
Stock issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the Shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within three (3) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of shares of Common Stock (rounded to the next highest
integer) equal to (A) the number of shares of Common Stock specified by the
Holder in its Notice of Exchange (the "Total Share Number") less (B) the number
of shares of Common Stock equal to the quotient obtained by dividing (i) the
product of the Total Share Number and the applicable Exercise Price by (ii) the
average closing bid price of the Common Stock on the NASDAQ SmallCap Exchange
during the five (5) business days immediately preceding the Exchange Date.
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.
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(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 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
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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 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
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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 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) 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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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.
(i) Covenants of the Company with respect to Registration The
Company covenants and agrees as follows:
(A) The Company shall pay all costs, fees and expenses
in connection with any registration statement ("Registration Statement") filed
in relation to the Warrant Shares, including, without limitation, the Company's
legal and accounting fees and printing expenses.
(B) The Company will take all necessary action which may
be required in qualifying or registering the Warrant Shares included in any
Registration Statement.
(C) 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 successors or
assigns, for specific inclusion in such Registration Statement.
(D) 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.
(j) 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.
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<PAGE>
(k) 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.
(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.
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EPL TECHNOLOGIES, INC.
By
Name: Paul L. Devine
Title: President
Dated: March 2, 2000
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Schedule of Warrants
- --------------------------------------------------------------------------------
Name of Warrant Holder Number of Warrant Shares
- --------------------------------------------------------------------------------
Karen and Bob Ingram 500,000
- --------------------------------------------------------------------------------
Don Giesenger 250,000
- --------------------------------------------------------------------------------
Jerry Kramer 250,000
- --------------------------------------------------------------------------------
Seidner Family Trust 250,000
- --------------------------------------------------------------------------------
Walter Terry 200,000
- --------------------------------------------------------------------------------
Serena and Richard McCallum 50,000
- --------------------------------------------------------------------------------
James Rhodes 25,000
- --------------------------------------------------------------------------------
Peter Leininger 25,000
- --------------------------------------------------------------------------------
John Merriman 25,000
- --------------------------------------------------------------------------------
Tom Calcagnini 12,500
- --------------------------------------------------------------------------------
James Calcagnini 25,000
- --------------------------------------------------------------------------------
Donald Calcagnini 12,500
- --------------------------------------------------------------------------------
Tim Collins 12,500
- --------------------------------------------------------------------------------
Total: 1,637,500
- --------------------------------------------------------------------------------
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