Document:

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:

 

2

 

(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

 

3

 

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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4

 

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:

  

 

5Exhibit 4.6

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE
AGREEMENT, dated as of March 5, 2003 (the “Agreement”), is entered into
by and between EarthShell Corporation, a Delaware corporation (the “Company”),
and Omicron Master Trust (the “Holder”).

 

RECITALS

 

A.                                   WHEREAS,
reference is made to the following agreements:

 

(i)                                     the
Securities Purchase Agreement, dated as of August 12, 2002 (the “Purchase
Agreement”), among the Company and the Purchasers identified therein; and

 

(ii)                                  the
Secured Convertible Debenture, dated August 12, 2002, (the “Debenture”)
in the original principal amount of Six Million Dollars ($6,000,000), and
executed by the Company in favor of Beacon Equities, Inc. (“Beacon”).

 

B.                                     WHEREAS,
effective November 6, 2002, as a result of the issuance to certain investors
(the “Adjustment Event”) of (i) 3,457,242 shares of Common Stock at a
price of $0.70 per share and (ii) a warrant exercisable for 345,724 shares of
Common Stock at an initial price of $0.84, the Conversion Price (as defined in
the Debentures) with respect to the conversion of the Debentures into Common
Stock has been adjusted pursuant to Section 13(d)(i) of the Debenture;

 

C.                                     WHEREAS,
Beacon has transferred to the Holder $2,000,000 of the outstanding $5,247,000
principal amount of the Debentures issued to Beacon by the Company under the
Purchase Agreement (such transferred Debenture, the “Transferred Debenture”);

 

D.                                    WHEREAS,
the Company and the Holder desire to exchange (the “Exchange”) the
Transferred Debenture for a new debenture of equal principal amount in the form
attached hereto as Exhibit A (the “Exchange Debenture”) and for
947,867 shares of the Company’s common stock, par value $0.01 per share (the “Exchange
Shares”);

 

E.                                      WHEREAS,
the Transferred Debenture was originally issued in a registered offering free
of resale restrictions and the Holder desires that the Exchange Debenture, the
shares of Common Stock issuable upon conversion thereof (the “Exchange
Conversion Shares”) and the Exchange Shares, when issued, shall be issued
free of resale restrictions (so long as Holder and its affiliate holders are
not affiliates of the Company); and

 

F.                                      WHEREAS,
The Company and the Holder desire to undertake the Exchange in reliance on
Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”), as an exemption from the registration requirements of Section 5 of
the Securities Act.

 

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 Holder agree as follows:

 

 

1.                                       Exchange
of Debentures.  The Company agrees
to issue the Exchange Debenture and the Exchange Shares to the Holder in
exchange for the Holder’s delivery of 
the Transferred Debenture to the Company for cancellation.  Promptly after the execution and delivery of
this Agreement, the Holder shall surrender the Transferred Debenture to the
Company and the Company shall deliver the Exchanged Debenture and the Exchange
Shares to the Holder.  Each of the
covenants set forth in Article IV of that certain Loan and Securities Purchase
Agreement dated as of March 5, 2003 by and among the Company and the investors
signatory thereto shall be binding on the Company, on the one hand, and on the
Holder as though it were a "Lender" under that agreement, on the
other hand.

 

2.                                       Representations and Warranties
of Company.  The Company hereby represents and
warrants to the Holder that as of the date hereof:

 

(a)                                  Power and Authority.  The Company is a corporation duly organized
and validly existing under the laws of the State of Delaware.  The Company has all requisite corporate
power and authority to execute and deliver this Agreement, and to perform its
obligations hereunder and under the Exchange Debenture.

 

(b)                                 Authorization, Etc. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

 

(c)                                  Compliance with Laws, Other Instruments of the
Company, Etc. None of the execution and delivery of this Agreement,
or the issuance of the Exchange Debenture or the Exchange Shares, or the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof and thereof will conflict with or result
in a breach of, or require any consent under, the Certificate of Incorporation
or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency (other than filings which will
be made by the Company as may be required by applicable state securities laws),
or any agreement or instrument to which the Company is a party or by which it
is bound or to which it is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any lien
upon any of the revenues or assets of the Company pursuant to the terms of any
such agreement or instrument.

 

(d)                                 Governmental Consent. Other than filings
required by any applicable state securities laws which shall be made by the
Company, neither the nature of the Company or of any of its businesses or
properties, nor any relationship between the Company and any other person or
entity, nor any circumstance in connection with this Agreement is such as to
require the consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the Company  as a condition to the execution and delivery
of this Agreement.

 

(e)                                No Commission. The Company has not paid,
nor has it accepted payment, directly or indirectly, any commission or other
remuneration for the solicitation of the Exchange.

 

(f)                                    Registration of Debentures. The
Transferred Debenture was initially issued by the Company in an offering
registered under the Securities Act and therefore

 

2

 

the
Transferred Debenture and the Common Stock issuable upon conversion of the
Transferred Debenture are not subject to any resale restrictions.  Based upon the consummation of the Exchange
as set forth herein, the Exchanged Debenture, the Exchange Conversion Shares
and the Exchange Shares, when issued, will not be subject to restrictions on
resale (so long as Holder and its affiliate holders are not affiliates of the
Company).

 

3.                                       Miscellaneous.

 

(a)                                  This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.  This Agreement may be amended only in
writing signed by the Company and the Holder and their successors and assigns.

 

(b)                                 Subject to Section 3(a), above, nothing in
this Agreement shall be construed to give to any person or entity other than
the Company and the Holder any legal or equitable right, remedy or cause under
this Agreement.  This Agreement shall inure
to the sole and exclusive benefit of the Company and the Holder.

 

(c)                                  GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. 
THE CORPORATE LAWS OF THE STATE OF DELAWARE SHALL GOVERN ALL ISSUES
CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.  ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
LOS ANGELES, CALIFORNIA FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
(INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 

(d)                                 The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

 

(e)                                  In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining

 

3

 

terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.

 

(f)                                    No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Holder or, or, in the case of a waiver, by the Holder.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

(g)                                 This Agreement may be executed in one or more
counterparts each of which shall be an original and all of which together shall
constitute one and the same instrument. A facsimile transmission or copy of the
original documents shall be as effective and enforceable as the original.

 

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