Exhibit 4.5


 


SECOND AMENDMENT TO


 


SECURITIES PURCHASE AGREEMENT


 


AND WARRANTS


 


This Second Amendment (this “Amendment”)
to Securities Purchase Agreement and Warrants is entered into and dated
February 24, 2003, to be effective as of August 12, 2002, among EarthShell
Corporation, a Delaware corporation (the “Company”), and the purchasers identified on
the signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers”).


 


WHEREAS, the Company and the Purchasers are parties to that certain
Securities Purchase Agreement dated as of August 12, 2002, as amended by the
Amendment (the “Prior Amendment”)
to Securities Purchase Agreement and Warrants dated January 8, 2003, to be
effective as of August 12, 2002 (such agreement, as amended, the “Agreement”),
pursuant to which the Company issued and sold to the Purchasers, and the
Purchasers purchased from the Company, certain securities of the Company
pursuant to the terms set forth therein;


 


WHEREAS, pursuant to the Agreement the Company issued to the Purchasers
the Warrants (as defined in the Agreement, as amended pursuant to the Prior
Amendment and as may have been subsequently exchanged for replacement Warrants,
the “Warrants”); and


 


WHEREAS, the Company and the Purchasers desire to amend the Agreement and
each of the Warrants as set forth herein;


 


NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
to amend the Agreement and each of the Warrants as follows:


 


1.             Sections 4.3(f) and 4.3(g) of the
Agreement are hereby amended and restated in their entirety as follows:


 


(f)            Notwithstanding anything to the
contrary in any of the Transaction Documents, (i) the maximum number of shares
of Common Stock that the Company may issue pursuant to the Transaction
Documents upon conversion of the Debentures at an effective purchase price less
than the Closing Price on the Trading Day immediately preceding the Closing
Date equals (A) 27,429,883 minus (B) the greater of (1) 4,285,714 and (2) the
aggregate number of shares of Common Stock issuable upon exercise of the
Warrants (such number, the “Maximum
Conversion Shares”) and (ii) the maximum number of shares of Common
Stock that the Company may issue pursuant to the Transaction Documents upon
exercise of the Warrants equals 27,429,883 minus the aggregate number of shares
of Common Stock which have been issued upon conversion of the Debentures as of the
date of such exercise (such number, the “Maximum
Warrant Shares” and together with the Maximum Conversion Shares, the
“Issuable Maximum”), unless the
Company obtains shareholder approval in accordance with


 

















 


the rules and regulations of
the applicable Trading Market.  If, at
the time any Purchaser requests an exercise of any Warrant, the Actual Minimum
(excluding any shares issued or issuable at an effective purchase price in
excess of the Closing Price on the Trading Day immediately preceding the Closing
Date) exceeds the Maximum Warrant Shares (and if the Company has not previously
obtained the required shareholder approval), then the Company shall issue to
the Purchaser requesting such exercise or conversion a number of Underlying
Shares of Common Stock not exceeding such Purchaser’s pro-rata portion of the
Maximum Warrant Shares (based on such Purchaser’s share (vis-à-vis other
Purchasers) of the aggregate purchase price paid hereunder and considering any
Underlying Shares previously issued to such Purchaser), and the remainder of
the Underlying Shares issuable in connection with such exercise (if any) shall
constitute “Excess Shares” pursuant to Section 4.3(g) below.  If, at the time any Purchaser requests a conversion
of any Debenture, the Actual Minimum (excluding any shares issued or issuable
at an effective purchase price in excess of the Closing Price on the Trading
Day immediately preceding the Closing Date) exceeds the Maximum Conversion
Shares (and if the Company has not previously obtained the required shareholder
approval), then the Company shall issue to the Purchaser requesting such
conversion a number of Underlying Shares of Common Stock not exceeding such
Purchaser’s pro-rata portion of the Maximum Conversion Shares (based on such
Purchaser’s share (vis-à-vis other Purchasers) of the aggregate purchase price
paid hereunder and considering any Underlying Shares previously issued to such
Purchaser), and the remainder of the Underlying Shares issuable in connection
with such conversion (if any) shall constitute “Excess Shares” pursuant to
Section 4.3(g) below.


 


(g)           Any Purchaser whose receipt of Excess
Shares upon exercise or conversion of Securities is restricted based on the
number of Remaining Authorized Shares, the Maximum Warrant Shares or the
Maximum Conversion Shares shall have the option, by notice to the Company, to
require the Company to use commercially reasonable efforts to obtain the
required shareholder approval necessary to permit the issuance of such Excess
Shares as soon as is possible, but in any event not later than the 90th day
after such notice.  No shares of Common
Stock that were issued pursuant to the Transaction Documents may be entitled to
vote to approve the issuance of such Excess Shares.  If the exercising or converting Purchaser elects to require the
Company to seek shareholder approval as described above and the Company fails
to obtain the required shareholder approval on or prior to the 90th day after
such notice, then (i) the number of shares issuable upon exercise of the
Warrants shall be that Purchaser’s pro-rata portion of the Maximum Warrant
Shares (based on such Purchaser’s share of the aggregate purchase price paid
hereunder and considering any Underlying Shares previously issued to such
Purchaser), and (ii) the number of shares issuable upon conversion of the
Debentures shall be that Purchaser’s pro-rata portion of the Maximum Conversion
Shares (based on such Purchaser’s share of the aggregate purchase price paid
hereunder and considering any Underlying Shares previously issued to such
Purchaser), and (iii) the exercising or converting Purchaser will continue to
hold the unexercised or unconverted portion, as the case may be, of the Warrant
or Debenture held by such Purchaser, and in no event will any additional shares
of Common Stock be issued upon any future exercise or conversion, as the case
may be, thereof.


 


2.             Sections 15(b) and 15(c) of each of
the Warrants are hereby amended and restated as follows:


 


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(b)           Notwithstanding anything to the
contrary contained herein, (i) the maximum number of shares of Common Stock
that the Company may issue pursuant to the Transaction Documents upon
conversion of the Debentures at an effective purchase price less than the
Closing Price on the Trading Day immediately preceding the Closing Date equals
(A) 27,429,883 minus (B) the greater of (1) 4,285,714 and (2) the aggregate
number of shares of Common Stock issuable upon exercise of the Warrants (such
number, the “Maximum Conversion Shares”)  shares and (ii) the maximum number of shares
of Common Stock that the Company may issue pursuant to the Transaction
Documents upon exercise of the Warrants equals 27,429,883 minus the aggregate
number of shares of Common Stock which have been issued upon conversion of the
Debentures as of the date of such exercise (such number, the “Maximum Warrant Shares” and together with
the Maximum Conversion Shares, the “Issuable Maximum”), unless the Company
obtains shareholder approval in accordance with the rules and regulations of
the applicable Trading Market.  If, at
the time any Holder requests an exercise of any Warrant, the Actual Minimum
(excluding any shares issued or issuable at an effective purchase price in
excess of the Closing Price on the Trading Day immediately preceding the
Closing Date) exceeds the Maximum Warrant Shares (and if the Company has not
previously obtained the required shareholder approval), then the Company shall
issue to the Holder requesting such exercise or conversion a number of
Underlying Shares of Common Stock not exceeding such Holder’s pro-rata portion
of the Maximum Warrant Shares (based on such Holder’s share (vis-à-vis other
Holders) of the aggregate purchase price paid under the Purchase Agreement and
considering any Underlying Shares previously issued to such Holder), and the
remainder of the Underlying Shares issuable in connection with such exercise
(if any) shall constitute “Excess Shares” pursuant to Section 15(c) below.  If, at the time any Holder requests a
conversion of any Debenture, the Actual Minimum (excluding any shares issued or
issuable at an effective purchase price in excess of the Closing Price on the
Trading Day immediately preceding the Closing Date) exceeds the Maximum
Conversion Shares (and if the Company has not previously obtained the required
shareholder approval), then the Company shall issue to the Holder requesting
such conversion a number of Underlying Shares of Common Stock not exceeding
such Holder’s pro-rata portion of the Maximum Conversion Shares (based on such
Holder’s share (vis-à-vis other Holders) of the aggregate purchase price paid
hereunder and considering any Underlying Shares previously issued to such
Holder), and the remainder of the Underlying Shares issuable in connection with
such conversion (if any) shall constitute “Excess Shares” pursuant to Section
15(c) below.  For the purposes hereof, “Actual Minimum” shall mean, as of any date,
the maximum aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction Documents,
including any Underlying Shares issuable upon exercise in full of all Warrants,
ignoring any limits on the number of shares of Common Stock that may be owned
by a Holder at any one time.


 


(c)           Any Holder whose receipt of Excess
Shares upon exercise or conversion of Securities is restricted based on the
number of Remaining Authorized Shares, the Maximum Warrant Shares or the
Maximum Conversion Shares shall have the option, by notice to the Company, to
require the Company to use commercially reasonable efforts to obtain the
required shareholder approval necessary to permit the issuance of such Excess
Shares as soon as is possible, but in any event not later than the 90th day
after such notice.  No shares of Common
Stock that were issued pursuant to the Transaction Documents may be entitled to
vote to approve the issuance of such Excess Shares.  If the exercising or converting Holder elects to require the
Company to seek shareholder approval as described above and the Company fails
to obtain the


 


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required shareholder approval
on or prior to the 90th day after such notice, then (i) the number of shares
issuable upon exercise of the Warrants shall be that Holder’s pro-rata portion
of the Maximum Warrant Shares (based on such Holder’s share of the aggregate
purchase price paid hereunder and considering any Underlying Shares previously
issued to such Holder), and (ii) the number of shares issuable upon conversion
of the Debentures shall be that Holder’s pro-rata portion of the Maximum
Conversion Shares (based on such Holder’s share of the aggregate purchase price
paid hereunder and considering any Underlying Shares previously issued to such
Holder), and (iii) the exercising or converting Holder will continue to hold
the unexercised or unconverted portion, as the case may be, of the Warrant or
Debenture held by such Holder, and in no event will any additional shares of
Common Stock be issued upon any future exercise or conversion, as the case may
be, thereof.


 


3.             Section 4(a) of each of the
Warrants is hereby amended and restated as follows:


 


“(a)         This Warrant shall be exercisable by
the registered Holder at any time and from time to time on or after the date hereof
to and including the Expiration Date; provided, however, that the Expiration
Date shall be extended for each day (i) the Registration Statement is not
effective, (ii) the Company fails to have a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock available to issue
Warrant Shares upon exercise of the Warrant, or (iii) the Company seeks
the shareholder vote contemplated by Section 15(c); provided, however, that in
the event the shareholder vote contemplated by Section 15(c) is not
obtained, the Expiration Date (as extended pursuant to this Section 4(a))
shall be extended by an additional two (2) years.  At 6:30 P.M., New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void
and of no value.”


 


4.             None of the Purchasers has
transferred any interest in the Warrant issued to it under the Agreement.


 


5.             The Agreement and each of the
Warrants, as amended by this Amendment, shall continue to be and shall remain
in full force and effect in accordance with their respective terms.


 


6.             This Amendment may be executed by
facsimile in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.


 


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SIGNATURE PAGES FOLLOW]


 


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IN WITNESS
WHEREOF, the parties hereto have caused this Second Amendment to Securities
Purchase Agreement and Warrants to be duly executed by their respective
authorized signatories as of the date first indicated above.


 


	
   

  	
  EARTHSHELL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEACON EQUITIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CLEVELAND OVERSEAS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRANSHIRE CAPITAL, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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