<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1998.
REGISTRATION NO. 333-39253
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO THE
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ONTRO, INC.
(Name of small business issuer in its charter)
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<S> <C> <C>
CALIFORNIA 2820 33-0638356
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
12675 DANIELSON COURT, SUITE 401, POWAY, CALIFORNIA 92064,
(619) 486-7200
(Address and telephone number of principal executive offices and principal place
of business)
CT CORPORATION SYSTEM
818 WEST SEVENTH STREET, LOS ANGELES, CA 90017, (213) 627-8252
(Name, address and telephone number of agent for service)
------------------------
COPIES TO:
DAVID A. FISHER, ESQ. THOMAS J. POLETTI, ESQ.
TIMOTHY J. FITZPATRICK, ESQ. SUSAN B. KALMAN, ESQ.
FISHER THURBER LLP FRESHMAN, MARANTZ, ORLANSKI,
4225 Executive Square, Suite 1600 COOPER & KLEIN
La Jolla, California 92037-1483 9100 Wilshire Blvd., 8th Floor East
Tel. (619) 535-9400 Beverly Hills, California 90212-3480
Fax (619) 535-1616 Tel. (310) 273-1870
Fax (310) 274-8357
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------
If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) UNIT(2) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Units (each Unit consists of one share
of Common Stock, no par value and
one Common Stock Purchase
Warrant)(3)......................... 3,910,000 $6.00 $23,460,000 $7,108.38
Common Stock, no par value(4)......... 3,910,000 -- -- --
Common Stock Purchase Warrants(5)..... 3,910,000 -- -- --
Common Stock, no par value, underlying
Warrants(6)......................... 3,910,000 $9.00 $35,190,000 $10,662.57
Representatives' Option(7)............ 1 $0.001 $340 $1.00
Units underlying Representatives'
Option (each Unit consists of one
share of Common Stock, no par value,
and one Common Stock Purchase
Warrant)............................ 340,000 $9.60 $3,264,000 $988.99
Common Stock, no par value, underlying
Representatives' Option............. 340,000 -- -- --
Common Stock Purchase Warrants,
underlying Representatives'
Option.............................. 340,000 -- -- --
Common Stock, no par value, underlying
Common Stock Purchase Warrants
underlying Representatives'
Option.............................. 340,000 $9.00 $3,060,000 $927.18
Common Stock, no par value, owned by
the Selling Security Holders........ 70,587 $6.00 $423,522 $128.34
Common Stock, no par value, underlying
the Selling Security Holder's
Warrants(8)......................... 70,587 $9.00 $635,283 $192.51
Total................................. $20,008.97*
</TABLE>
* Previously paid.
(1) Pursuant to Rule 416 under the Securities Act of 1933 (the "Act"), this
Registration Statement covers such additional indeterminate number of shares
of Common Stock and Warrants as may be issued by reason of adjustments in
the number of shares of Common Stock and Warrants pursuant to anti-dilution
provisions contained in the Warrants and Representatives' Options. Because
such additional shares of Common Stock and Warrants will, if issued, be
issued for no additional consideration, no registration fee is required.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(3) Includes 510,000 Units subject to the Underwriters' over-allotment option
(the "Over-allotment Option"). The Common Shares included in these Units
will be offered by L.L. Knickerbocker Company, Inc. and the Warrants
included in these Units will be offered by the Registrant.
(4) Includes 510,000 shares of Common Stock subject to the Over-allotment
Option.
(5) Includes 510,000 Warrants subject to the Over-allotment Option. The Warrants
are exercisable over a three year period commencing on the closing date of
the Offering at 150% of the price of the Units offered herein.
(6) The number of shares of Common Stock specified is the number which may be
acquired upon exercise of the Warrants at the maximum exercise price
thereof.
(7) The Representatives' Option entitles the Representatives to purchase 340,000
Units at $9.60 per Unit. The Common Stock and Warrants included in the Units
underlying the Representatives' Option may only be purchased together. The
Representatives' Option is exercisable over a four year period commencing
one year from the effective date of this Registration Statement.
(8) The Selling Security Holders' Warrants are not registered herein. The
Selling Security Holders' Warrants are exercisable over a three year period
commencing on the closing date of the Offering at 150% of the Offering Price
of the Units.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The statutes, charter provisions, Bylaws, Indemnification Agreements, or
other arrangements under which any controlling person, director, or officer of
the Registrant is insured or indemnified in any manner against any liability
which he or she may incur in his or her capacity as such, are as follows:
(a) Section 317 of the California General Corporation Law provides for
the indemnification of officers and directors of the Company against
expenses, judgments, fines, and amounts paid in settlement under certain
conditions and subject to certain limitations.
(b) Article V of the Bylaws of the Company provides that the Company
shall have power to indemnify any person who is or was an agent of the
Company as defined in Section 317 of the California General Corporation Law
through Bylaw provisions, agreements with agents, vote of the stockholders
or disinterested directors, or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California General Corporation
Law, subject to applicable limits set forth in Section 204 of the California
General Corporation Law with respect to actions for breach of duty to the
corporation and its shareholders.
(c) Article IV of the Company's Articles of Incorporation provides that
the liability of the directors of the Company for monetary damages shall be
eliminated to the fullest extent permissible under California law.
Accordingly, a director will not be liable for monetary damages for breach
of duty to the Company or its shareholders in any action brought by or in
the right of the Company. However, a director remains liable to the extent
required by California law. The provisions will not alter the liability of
directors under federal securities laws.
(d) Pursuant to authorization provided under the Articles of
Incorporation, the Company has entered into Indemnification Agreements with
each of its directors and officers. Generally, the Indemnification
Agreements attempt to provide the maximum protection permitted by California
law as it may be amended from time to time. However, an individual will not
receive indemnification for judgments, settlements or expenses if he or she
is found liable to the Company, except to the extent the court determines he
or she is fairly and reasonably entitled to indemnity for expenses, for
settlements not approved by the Company or for settlements and expenses if
the settlement is not approved by the court. The Indemnification Agreements
provide for the Company to advance to the individual any and all reasonable
expenses, including legal fees and expenses, incurred in investigating or
defending any such action, suit or proceeding. In order to receive an
advance of expenses, the individual must submit to the Company copies of
invoices presented to him or her for such expenses. Also, the individual
must repay such advances upon a final judicial decision that he or she is
not entitled to indemnification.
(e) There is directors and officers liability insurance now in effect
which insures directors and officers of the Company. Such policy is renewed
by the Company on a monthly basis and provides limits of $2,000,000 per
policy year and does not provide coverage with respect to this filing. Under
the policy, the directors and officers are insured against loss arising from
claims made against them due to wrongful acts while acting in their
individual and collective capacities as directors and officers, subject to
certain exclusions. The policy insures the Company against loss as to which
its directors and officers are entitled to indemnification. Upon completion
of this Offering, the Company intends to obtain a policy that will provide
limits of $5,000,000 per policy year and will provide coverage with respect
to this filing.
(f) The Underwriting Agreement (Exhibit 1.1 hereto) contains provisions
by which the Underwriters have agreed to indemnify the Company, each person,
if any, who controls the Company within
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<PAGE>
the meaning of Section 15 of the Securities Act of 1933 (the "Act"), each
director of the Company, and each officer of the Company who signs this
Registration Statement, with respect to information furnished in writing by
or on behalf of the Underwriters for use in the Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors of the Company pursuant to the foregoing
provision, or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses expected to be incurred
by the Registrant in connection with the sale and distribution of the securities
being registered hereby, other than underwriting discounts and commissions. All
amounts are estimated except the Securities and Exchange Commission filing fee.
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Securities and Exchange Commission filing fee................... $ 20,000
Nasdaq listing fee.............................................. $ 10,000
NASD filing fee................................................. $ 2,700
Blue Sky fees and expenses...................................... $ 25,000
Non-Accountable Expense Allowance to the Representatives........ $ 374,000
Printing and engraving expenses................................. $ 150,000
Accounting fees and expenses.................................... $ 160,000
Legal fees and expenses......................................... $ 275,000
Transfer Agent and Registrar fees............................... $ 5,000
Financial consulting fee........................................ $ 72,000
Miscellaneous expenses.......................................... $ 295,300
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Total....................................................... $1,389,000
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</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Since incorporation in November, 1994, the Company has sold and issued the
unregistered securities shown below, all of which reflect the fact the Company's
Common Stock was split 28.12 shares for each one share outstanding on December
31, 1996.
(1) On December 29, 1994, the Company issued 652,947 and 435,298 shares of
Common Stock to Messrs. Scudder and Berntsen, respectively, for a total
consideration of $35,000, or $.03 per share.
(2) On May 18, 1995, the Company issued 177,157 shares of Common Stock to
Harvey Ruben, Daniel Gibbs, Kevin Mineo, Dennis Webb, the McKay Trust, the
Siebert Trust, and the Christopher Trust, for a total consideration of $5,695.20
or $.03 per share.
(3) On June 26, 1995, the Company issued 28,120 shares of Common Stock to
Alan Ligi for a total consideration of $25,000, or $.89 per share.
(4) On August 24, 1995, the Company issued a total of 28,120 shares of
Common Stock to Yale Fowler and Curtis Colt for a total consideration of
$25,000, or $.89 per share.
(5) On November 22, 1995, the Company issued 28,120 shares of Common Stock
to James Hopper and Dennis Huston for a total consideration of $25,000, or $.89
per share.
(6) On December 1, 1995, the Company issued 14,060 shares of Common Stock to
Edward Villanueva for a total consideration of $12,500, or $.89 per share.
II-2
<PAGE>
(7) On January 31, 1996, the Company issued 22,496 shares of Common Stock to
James Hopper, Dennis Huston, and Richard Johnson for a total consideration of
$20,000, or $.89 per share, and issued 2,813 shares of Common Stock to the McKay
Trust for services rendered.
(8) On February 14, 1996, the Company issued 14,060 shares of Common Stock
to Fernando Fregoso and Frank Barone for services rendered, and 2,812 shares of
Common Stock to the McKay Trust for a total consideration of $2,500, or $.89 per
share.
(9) On May 15, 1996, the Company issued 29,526 shares of Common Stock to the
Kadane Trust, Alan Ligi, and Richard Johnson for a total consideration of
$26,250, or $.89 per share.
(10) On June 7, 1996, the Company issued 140,600 shares of Common Stock
(28,120 shares each) to James Hopper, Dennis Huston, Edward Villanueva, and
Messrs. Scudder and Berntsen, in exchange for their personal guarantees on
equipment leases to the Company.
(11) On June 18, 1996, the Company issued 19,684 shares of Common Stock to
James Hopper, John Caldwell, and the Christopher Trust for a total consideration
of $17,500, or $.89 per share.
(12) On June 26, 1996, the Company issued 2,812 shares of Common Stock to the
Kadane Trust for a total consideration of $2,500, or $.89 per share.
(13) On June 28, 1996, the Company issued 28,120 shares of Common Stock to
Andre Bell and William Winston for a total consideration of $25,000, or $.89 per
share.
(14) On July 1, 1996, the Company issued 42,180 shares of Common Stock each
to Jerine Rosato and Ann Davern for services rendered.
(15) On July 15, 1996, the Company issued 143,103 shares of Common Stock to
Manhattan West, Inc. for a total consideration of $100,000, or $.70 per share.
(16) On July 15, 1996, the Company issued 14,060 shares of Common Stock to
Dennis Huston for a total consideration of $12,500, or $.89 per share.
(17) On September 20, 1996, the Company issued 858,673 shares of Common Stock
to the L.L. Knickerbocker Company, Inc. for a total consideration of $600,000,
or $.70 per share.
(18) On October 1, 1996, the Company issued 42,180 shares of Common Stock to
L. Kevin Mineo for services rendered.
(19) On March 22, 1997, the Company issued 12,000 shares of Common Stock to
Kevin A. Hainley, its Chief Financial Officer, for a total consideration of
$12,000, or $1.00 per share, upon exercise of an outstanding incentive stock
option.
(20) On May 30, 1997, the Company issued 222,222 shares of Common Stock to
the Danna Trust, Salvador La Barbera, Trustee, for a total consideration of
$500,000 or approximately $2.25 per share and a warrant to purchase 100,000
shares of Common Stock for $3.00 per share.
(21) On June 1, 1997, the Company issued 4,000 shares of Common Stock to
Kevin A. Hainley, its Chief Financial Officer, in exchange for services rendered
(waiver of $8,000 in salary due or $2.00 per share).
(22) On July 24, 1997, the Company issued 5,000 shares of Common Stock to L.
Lawrence Potomac, one of its advisory board members, for a total consideration
of $5.00, or approximately $.001 per share, upon exercise of an outstanding
non-qualified stock option.
(23) On August 1, 1997, the Company issued 4,000 shares of Common Stock to
Kevin A. Hainley, its Chief Financial Officer, in exchange for services rendered
(waiver of $8,000 in salary due or $2.00 per share).
II-3
<PAGE>
(24) On September 23, 1997, the Company issued 20,000 shares of Common Stock
to C. James Moore for a total consideration of $62,600, or $3.13 per share.
(25) On September 24, 1997, the Company issued 11,949 shares of Common Stock
to Scott and Susan Moore for a total consideration of $37,400, or $3.13 per
share.
(26) On October 27, 1997, the Company issued 7,987 shares of Common Stock to
Tony Orlina and 4,833 shares of Common Stock to Stephen A. Shields for a total
consideration of $40,000, or $3.13 per share.
(27) On October 27, 1997, the Company issued to Henri B. Schkud, Grant King,
and Francesca Daniels, an aggregate of 70,587 units consisting of one share of
Common Stock and a warrant to purchase one share of Common Stock on terms
substantially similar to the Warrants for a total consideration of $300,000 or
$4.25 per unit.
(28) In February 1998, each of the officers, directors and employees of the
Company and Knickerbocker, along with two other individuals contributed 67,260
shares of Insta-Heat, Inc. ("IHI") common stock to IHI for cancellation. These
shares represented all of the IHI securities held by the officers, directors,
employees and Knickerbocker, and a portion of the shares held by the other two
individuals. The contributions were made without consideration. In March 1998
the Company entered into agreements with each of the remaining 20 IHI
shareholders to utilize a portion of the proceeds of the Offering to purchase
all of their 19,250 IHI shares for $25 per share, or $481,250. $25 was the price
paid in cash to purchase IHI common stock in all but one of the sales of IHI
common stock which occurred since June 1995 (Knickerbocker paid $50,000 for
29,260 shares in September 1996, or $1.71 per share). Each of the remaining IHI
shareholders also agreed to the termination of the license agreement between the
Company and IHI (the "IHI License") and waiver of any royalties due. As a result
thereof IHI is anticipated to become a wholly owned subsidiary of the Company
following completion of the Offering, and the IHI License will be terminated.
The sale and issuance of securities in each of the transactions numbered 1
through 27 were deemed to be exempt under the Act by virtue of section 4(2) as
transactions by an issuer not involving any public offering. Each of the
transactions numbered 1 through 27 were also deemed to be exempt under Section
4(2) of the Act by reason of their compliance with 17 CFR 230.506. In connection
with each transaction the Company took such actions, and obtained from the
purchaser written representations and warranties sufficient to provide the
Company with reasonable grounds to believe: (i) all offers and sales satisfied
the terms of 17 CFR 230.501 and 17 CFR 230.502; (ii) there were no more than 35
purchasers calculated pursuant to 17 CFR 230.501(e); (iii) each purchaser alone
or with a purchaser representative had such knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of the investment prior to making the purchase; (iv) the purchasers in each of
the transactions numbered 15, 16 and 19 through 27 were accredited investors as
defined in 17 CFR 230.501(a); and (v) each of the purchasers in each of
transactions numbered 1 through 27 had adequate access through employment or
other relationships with the Company or its management, to information about the
Company which was supplied to them to allow them to make an informed investment
decision. In each of the transactions numbered 1 through 27, the purchasers had
a previous existing personal or business relationship with the officers and
directors of the Company. Each of the transactions numbered 1 through 27 was
also deemed to be exempt pursuant to section 3(b) of the Act as a result of
being in compliance with and satisfying all of the conditions of 17 CFR 230.505.
In each of the transactions, appropriate legends were affixed to the
certificates issued to the purchaser.
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ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
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EXHIBIT
NO. DESCRIPTION OF DOCUMENTS
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1.1 Form of Underwriting Agreement. (1)
1.2 Form of Selected Dealers Agreement. (1)
3.1 Restated Articles of Incorporation filed with the California Secretary of State on March 10, 1997. (1)
3.2 Bylaws of the Registrant as amended. (1)
3.3 Form of Indemnification Agreement for Officers and Directors, and certain advisors. (1)
4.1 Form of Warrant Certificate. (1)
4.2 Form of Representatives' Option. (1)
4.3 Warrant Agreement between the Company and ChaseMellon Shareholder Services. (1)
4.4 Form of Common Stock Certificate. (1)
5.1 Opinion of Fisher Thurber LLP regarding the legality of the securities being registered. (1)
9.1 Voting Trust Agreement between the Company, James Scudder as Trustee, and Manhattan West, Inc. (1)
9.2 Termination of Voting Trust Agreement between the Company, James Scudder as Trustee, and Manhattan West,
Inc. (1)
9.3 Form of Voting Trust Agreement between James Scudder, James Berntsen and L.L. Knickerbocker and Cohig &
Associates, Inc. (2)
10.1 Consulting Agreement effective August 22, 1996 as amended, between the Company and Rowland Hanson. (1)
10.2 Consulting Agreement dated July 15, 1996, between the Company and Manhattan West, Inc. (1)
10.3 Consulting Agreement dated August 5, 1996, between the Company and L. Lawrence Potomac. (1)
10.4 Consulting Agreement effective October 15, 1996, between the Company and Tor Petterson & Associates. (1)
10.5 Consulting Agreement dated August 11, 1997, between the Company and D. Scott Thorogood. (1)
10.6 Stock Purchase Agreement, dated July 15, 1996 between the Company and Manhattan West, Inc. (1)
10.7 Option Agreement with Manhattan West, Inc., dated July 15, 1996. (1)
10.8 Agreement of Purchase and Sale between the Company and the L.L. Knickerbocker Company, Inc., dated
September 17, 1996. (1)
10.9 Form of Loan Agreement between the Company and the lenders identified on the attached schedule. (1)
10.10 Loan Agreement between the Company and 4D Enterprises, Inc., dated February 24, 1997. (1)
10.11 Employment Agreement between the Company and Allan C. Mayer, Jr., dated January 1, 1997. (1)
10.12 Employment Agreement between the Company and James A. Scudder, dated September 1, 1996. (1)
</TABLE>
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EXHIBIT
NO. DESCRIPTION OF DOCUMENTS
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10.13 Employment Agreement between the Company and James L. Berntsen, dated September 1, 1996. (1)
10.14 Employment Agreement between the Company and Kevin A. Hainley, dated January 1, 1997. (1)
10.15 Distributorship Agreement with the L.L. Knickerbocker Company, Inc., dated April 4, 1997. (1)
10.16 Amended and Restated License Agreement with Insta-Heat, Inc, effective September 30, 1995. (1)
10.17 The Company's 1996 Omnibus Stock Plan. (1)
10.18 1996 Omnibus Stock Plan Form of Incentive Stock Option Agreement. (1)
10.19 1996 Omnibus Stock Plan Form of Nonqualified Stock Option Agreement. (1)
10.20 1996 Omnibus Stock Plan Form of Restricted Stock Purchase Agreement. (1)
10.21 Form of Option Agreement with Advisory Board Members listed on attached schedule. (1)
10.22 Option Agreement with David A. Fisher, dated January 6, 1997. (1)
10.23 Form of Warrant between the Company and the lenders identified on the attached schedule. (1)
10.25 Stock Purchase Agreement dated May 30, 1997 between the Company and the Danna Trust. (1)
10.26 Stock Purchase Agreement dated September 23, 1997 between the Company and C. James Moore. (1)
10.27 Stock Purchase Agreement dated September 24, 1997 between the Company and Scott and Susan Moore. (1)
10.28 Evaluation Agreement dated May 23, 1997 between the Company and Nestle USA, Inc. (1)
10.29 Leases for the Company's facilities at 12625 and 12675 Danielson Court, Suites 110 and 401, dated
February 8, 1996, as amended. (1)
10.30 Lease for the Company's proposed facility to be constructed dated August 7, 1997. (1)
10.31 Stock Purchase Agreement dated October 27, 1997, between the Company and Tony Orlina. (1)
10.32 Stock Purchase Agreement dated October 27, 1997, between the Company and Stephen A. Shields. (1)
10.33 Form of Stock Purchase Agreement dated October 27, 1997 between the Company and the Selling Security
Holders. (1)
10.34 Form of Warrant between the Company and the Selling Security Holders. (1)
10.35 Form of Loan Agreement between the Company and the lenders identified on the attached schedule. (1)
10.36 Form of Stock Purchase Agreement between the Company and the shareholders identified on the attached
schedule. (2)
10.37 Form of First Amendment to Loan Agreement and Warrant between the Company and the Bridge Lenders
identified on the attached schedule. (1)
10.38 Loan Agreement dated January 2, 1998 and First Amendment thereto dated January 31, 1998 between the
Company and MPII a Texas corporation. (1)
10.39 First Amendment to Loan Agreement and Note between the Company and the lenders identified on the attached
schedule. (1)
</TABLE>
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<TABLE>
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EXHIBIT
NO. DESCRIPTION OF DOCUMENTS
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10.40 Form of First Amendment to Stock Purchase Agreement between the Company and the Selling Security Holders
identified on the attached schedule. (1)
10.41 Termination of Consulting Agreement between the Company and Manhattan West, Inc. dated February 4, 1998.
(1)
10.42 Form of cancellation of the License Agreement between the Company and Insta Heat, Inc.(1)
10.43 Form of Stock Purchase Agreement between the Company and the Shareholders identified on the attached
Schedule.
23.1 Consent of Fisher Thurber LLP (contained in their opinion filed as Exhibit 5). (1)
23.2 Consent of KPMG Peat Marwick LLP, Independent Public Accountants. (1)
24.1 Form of Power of Attorney. (1)
27 Financial Data Schedule. (1)
</TABLE>
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(1) Previously filed
(2) Filed herewith
(3) To be filed by amendment
II-7
<PAGE>
(B) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted, as the required information is inapplicable
or the information is presented in the Financial Statements or the notes
thereto.
ITEM 28. UNDERTAKINGS
Insofar as indemnification of liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the Offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) The Registrant will provide to the underwriters at the closing(s)
specified in the underwriting agreement certificates in such denominations
and registered in such names as required by the underwriters to permit
prompt delivery to each purchaser.
(4) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
II-8
<PAGE>
(5) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(6) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
II-9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Post-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, in the City of Poway, State of California, on May 14, 1998.
<TABLE>
<S> <C> <C>
ONTRO, INC.
By: JAMES A. SCUDDER
-----------------------------------------
James A. Scudder,
CHIEF EXECUTIVE OFFICER
</TABLE>
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES
- --------------------------------------------------------------
JAMES A. SCUDDER LOUIS L. KNICKERBOCKER
- ------------------------------ ------------------------------
James A. Scudder Louis L. Knickerbocker
President, Chief Executive Director
Officer, By: James A. Scudder
and Director Attorney-in-Fact
May 14, 1998 May 14, 1998
JAMES L. BERNTSEN ROBERT F. COSTON
- ------------------------------ ------------------------------
James L. Berntsen Robert F. Coston
Executive Vice President, Director
Secretary By: James A. Scudder
and Director Attorney-in-Fact
May 14, 1998 May 14, 1998
KEVIN A. HAINLEY DOUGLAS W. MOUL
- ------------------------------ ------------------------------
Kevin A. Hainley Douglas W. Moul
Chief Financial Officer Director
May 14, 1998 By: James A. Scudder
Attorney-in-Fact
May 14, 1998
II-10
<PAGE>
ONTRO, INC.
INDEX TO EXHIBITS
TO FORM SB-2
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENTS
- --------- ---------------------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement. (1)
1.2 Form of Selected Dealers Agreement. (1)
3.1 Restated Articles of Incorporation filed with the California Secretary of State on March 10, 1997. (1)
3.2 Bylaws of the Registrant as amended. (1)
3.3 Form of Indemnification Agreement for Officers and Directors, and certain advisors. (1)
4.1 Form of Warrant Certificate. (1)
4.2 Form of Representatives' Option. (1)
4.3 Warrant Agreement between the Company and ChaseMellon Shareholder Services. (1)
4.4 Form of Common Stock Certificate. (1)
5.1 Opinion of Fisher Thurber LLP regarding the legality of the securities being registered. (1)
9.1 Voting Trust Agreement between the Company, James Scudder as Trustee, and Manhattan West, Inc. (1)
9.2 Termination of Voting Trust Agreement between the Company, James Scudder as Trustee, and Manhattan West,
Inc. (1)
9.3 Form of Voting Trust Agreement between James Scudder, James Berntsen and L.L. Knickerbocker and Cohig &
Associates, Inc. (2)
10.1 Consulting Agreement effective August 22, 1996 as amended, between the Company and Rowland Hanson. (1)
10.2 Consulting Agreement dated July 15, 1996, between the Company and Manhattan West, Inc. (1)
10.3 Consulting Agreement dated August 5, 1996, between the Company and L. Lawrence Potomac. (1)
10.4 Consulting Agreement effective October 15, 1996, between the Company and Tor Petterson & Associates. (1)
10.5 Consulting Agreement dated August 11, 1997, between the Company and D. Scott Thorogood. (1)
10.6 Stock Purchase Agreement, dated July 15, 1996 between the Company and Manhattan West, Inc. (1)
10.7 Option Agreement with Manhattan West, Inc., dated July 15, 1996. (1)
10.8 Agreement of Purchase and Sale between the Company and the L.L. Knickerbocker Company, Inc., dated
September 17, 1996. (1)
10.9 Form of Loan Agreement between the Company and the lenders identified on the attached schedule. (1)
10.10 Loan Agreement between the Company and 4D Enterprises, Inc., dated February 24, 1997. (1)
10.11 Employment Agreement between the Company and Allan C. Mayer, Jr., dated January 1, 1997. (1)
10.12 Employment Agreement between the Company and James A. Scudder, dated September 1, 1996. (1)
10.13 Employment Agreement between the Company and James L. Berntsen, dated September 1, 1996. (1)
10.14 Employment Agreement between the Company and Kevin A. Hainley, dated January 1, 1997. (1)
10.15 Distributorship Agreement with the L.L. Knickerbocker Company, Inc., dated April 4, 1997. (1)
10.16 Amended and Restated License Agreement with Insta-Heat, Inc, effective September 30, 1995. (1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENTS
- --------- ---------------------------------------------------------------------------------------------------------
10.17 The Company's 1996 Omnibus Stock Plan. (1)
<S> <C>
10.18 1996 Omnibus Stock Plan Form of Incentive Stock Option Agreement. (1)
10.19 1996 Omnibus Stock Plan Form of Nonqualified Stock Option Agreement. (1)
10.20 1996 Omnibus Stock Plan Form of Restricted Stock Purchase Agreement. (1)
10.21 Form of Option Agreement with Advisory Board Members listed on attached schedule. (1)
10.22 Option Agreement with David A. Fisher, dated January 6, 1997. (1)
10.23 Form of Warrant between the Company and the lenders identified on the attached schedule. (1)
10.25 Stock Purchase Agreement dated May 30, 1997 between the Company and the Danna Trust. (1)
10.26 Stock Purchase Agreement dated September 23, 1997 between the Company and C. James Moore. (1)
10.27 Stock Purchase Agreement dated September 24, 1997 between the Company and Scott and Susan Moore. (1)
10.28 Evaluation Agreement dated May 23, 1997 between the Company and Nestle USA, Inc. (1)
10.29 Leases for the Company's facilities at 12625 and 12675 Danielson Court, Suites 110 and 401, dated
February 8, 1996, as amended. (1)
10.30 Lease for the Company's proposed facility to be constructed dated August 7, 1997. (1)
10.31 Stock Purchase Agreement dated October 27, 1997, between the Company and Tony Orlina. (1)
10.32 Stock Purchase Agreement dated October 27, 1997, between the Company and Stephen A. Shields. (1)
10.33 Form of Stock Purchase Agreement dated October 27, 1997 between the Company and the Selling Security
Holders. (1)
10.34 Form of Warrant between the Company and the Selling Security Holders. (1)
10.35 Form of Loan Agreement between the Company and the lenders identified on the attached schedule. (1)
10.36 Form of Stock Purchase Agreement between the Company and the shareholders identified on the attached
schedule. (2)
10.37 Form of First Amendment to Loan Agreement and Warrant between the Company and the Bridge Lenders
identified on the attached schedule. (1)
10.38 Loan Agreement dated January 2, 1998 and First Amendment thereto dated January 31, 1998 between the
Company and MPII a Texas corporation. (1)
10.39 First Amendment to Loan Agreement and Note between the Company and the lenders identified on the attached
schedule. (1)
10.40 Form of First Amendment to Stock Purchase Agreement between the Company and the Selling Security Holders
identified on the attached schedule. (1)
10.41 Termination of Consulting Agreement between the Company and Manhattan West, Inc. dated February 4, 1998.
(1)
10.42 Form of cancellation of the License Agreement between the Company and Insta Heat, Inc.(1)
10.43 Form of Stock Purchase Agreement between the Company and the Shareholders identified on the attached
Schedule.
23.1 Consent of Fisher Thurber LLP (contained in their opinion filed as Exhibit 5). (1)
23.2 Consent of KPMG Peat Marwick LLP, Independent Public Accountants. (1)
24.1 Form of Power of Attorney. (1)
27 Financial Data Schedule. (1)
</TABLE>
- ------------------------
(1) Previously filed
(2) Filed herewith
(3) To be filed by amendment
<PAGE>
EXHIBIT 9.3
FORM OF VOTING TRUST AGREEMENT BETWEEN
JAMES SCUDDER, JAMES BERNTSEN AND
L.L. KNICKERBOCKER AND COHIG & ASSOCIATES, INC.
<PAGE>
VOTING TRUST AGREEMENT
In consideration of their mutual promises, the parties named below enter
into this Voting Trust Agreement ("Agreement") for the purpose of complying
with the terms and conditions of the Underwriting Agreement dated May 11,
1998 by and between Cohig & Associates, Inc. and Joseph Charles & Associates,
Inc. as Representatives of the various underwriters, Ontro, Inc., a
California corporation (the "Company") and L.L. Knickerbocker Company, Inc.
("LLK") executed in connection with the initial public offering of its stock
by Ontro, Inc., a California corporation.
SECTION 1. PARTIES AND EFFECTIVE DATE
Section 1.01. PARTIES. The parties to this Agreement are:
(a) James A. Scudder, James L. Berntsen and LLK, who shall each become
the registered holder of Voting Trust Certificates in the form attached
hereto as Exhibit A, hereafter called "Certificate Holders" or "shareholders."
(b) The following Voting Trustee, hereafter called "Trustee": David A.
Fisher.
(c) The Company, Ontro, Inc., a California corporation.
(d) Cohig & Associates, Inc. ("Cohig").
Section 1.02. EFFECTIVE DATE. This Agreement shall be deemed
effective as of 5:30 p.m. Eastern Standard Time on May 11, 1998.
SECTION 2. TRUSTEE AND REGISTRAR
Section 2.01. NUMBER AND TERM OF TRUSTEE. There shall be one (1)
Trustee of this trust unless this Agreement is amended in writing to provide
for additional Trustees. The first Trustee shall be the person named above,
and his successor shall be appointed as hereinafter provided. In the absence
of his removal, resignation, or death, the first Trustee shall serve for the
entire term of this trust.
Section 2.02. DEATH OF TRUSTEE. The rights and duties of the Trustee
shall terminate upon his death, and no interest in any of the property owned
or held by the trust nor any of the rights or duties of the Trustee may be
transferred by will, devise, succession, or in any manner except as provided
herein. The heirs, administrators, and executors of the Trustee shall,
however, have the right and duty to convey any property held by the Trustee
to the successor Trustee.
Section 2.03. RESIGNATION. The Trustee and any successor Trustee may
resign at any time by giving written notice of resignation to the registered
Certificate Holders, Cohig and the Company.
2
<PAGE>
Section 2.04. SUCCESSOR TRUSTEE. If the Trustee should resign, die,
or fail to act as Trustee, Fisher Thurber LLP shall be the successor Trustee
authorized to act through any regular member of such law firm who is, at the
time of such action, authorized to practice law in the State of California.
Section 2.05. DUTIES AND QUALIFICATION OF TRUSTEE. The Trustee shall
receive and hold certificates of shares of the Company delivered to the
Trustee under this Agreement, and execute and issue Voting Trust Certificates
in the name of the Trustee, and transfer such share certificates, and effect
the exchange of share certificates for Voting Trust Certificates as and when
herein provided, and the Trustee may perform any other functions hereunder.
SECTION 3. DEPOSIT AND TRANSFER OF SHARES--ISSUANCE AND TRANSFER OF
VOTING TRUST CERTIFICATES
Section 3.01. DEPOSIT OF SHARES. By executing this Agreement, each of
the Certificate Holders agrees he shall immediately deposit with the Trustee
certificates as received for all shares of the Company owned by such
Certificate Holder. All such certificates shall be endorsed in blank or to
the Trustee and shall be accompanied by such instruments of transfer as to
enable the Trustee to cause such certificates to be transferred into the name
of the Trustee, as Trustee.
Section 3.02. TRANSFER OF SHARES TO TRUSTEE. All certificates for
shares of the Company delivered to the Trustee shall be surrendered by the
Trustee to the Company and canceled. New share certificates shall be issued
in the name of the Trustee, as Trustee. The new share certificates shall
state that they are issued pursuant to this Agreement, and in the entry of
ownership of the shares by the Trustee in the stock transfer records of the
Company, that fact shall also be noted.
Section 3.03. TRANSFER OF SHARES TO SUCCESSOR TRUSTEE.
Notwithstanding any changes in the Trustee, the certificates for shares
standing in the name of the Trustee may be endorsed and transferred by any
successor Trustee or Trustees with the same effect as if endorsed and
transferred by the Trustee who has ceased to act. The Trustee is authorized
and empowered to cause any further transfer of said shares to be made which
may be necessary through the occurrence of any change of persons holding the
office of Trustee hereunder.
Section 3.04. NO SALE OF SHARES. Notwithstanding the provisions of
Section 3.01, 3.02 and 3.03 the Trustee shall have no authority to sell or
otherwise dispose of or encumber any of the stock deposited pursuant to the
provisions of this Agreement.
Section 3.05. VOTING TRUST CERTIFICATE. On receipt by the Trustee of
the share certificates from the Certificate Holders and transfer of the same
into the name of the Trustee, the Trustee shall hold the certificates subject
to the terms of this Agreement, and the Trustee shall thereupon issue and
deliver to the surrendering Certificate Holders Voting Trust Certificates,
representing the Certificate Holders' beneficial interest in the trust. The
Voting Trust Certificates shall be in substantially the form of Exhibit A
attached hereto.
3
<PAGE>
Section 3.06. TRANSFER OF VOTING TRUST CERTIFICATES. The Voting Trust
Certificates shall be transferable only as provided in the Voting Trust
Certificates and this Agreement, and upon payment of any charges in effect at
the time of transfer. All transfers shall be recorded in the certificate
record book as defined in Section 6.02 herein, and any transfer made of any
Voting Trust Certificate shall vest in the transferee all rights of the
transferor and shall subject the transferee to the same limitations as those
imposed on the transferor by the terms of the Voting Trust Certificate so
transferred and by this Agreement, and upon such transfer the Trustee shall
deliver a Voting Trust Certificate or Certificates to the transferee for the
number of shares represented by the Voting Trust Certificate so transferred.
Section 3.07. PROOF OF OWNERSHIP. The Trustee shall not be required
to recognize any transfer of a Voting Trust Certificate not made in
accordance with the provisions hereof unless the person or persons claiming
such ownership shall have produced indicia of title satisfactory to the
Trustee and shall have deposited with the Trustee indemnity satisfactory to
him.
Section 3.08. HOLDER OF CERTIFICATE AS OWNER. The Trustee may treat
the registered holder, for the time being, of each Voting Trust Certificate
(or when presented duly endorsed in blank for transfer, the bearer thereof)
as the absolute owner and holder thereof, and of all the rights and interests
represented thereby for all purposes whatsoever, and the Trustee shall not be
bound or affected by any notice to the contrary.
Section 3.09. REPLACEMENT OF CERTIFICATES. If a Voting Trust
Certificate shall be lost, stolen, mutilated, or destroyed, the Trustee, in
his reasonable discretion, may issue a duplicate of such Certificate upon
receipt of evidence of such fact satisfactory to him, indemnity satisfactory
to him, and the existing Voting Trust Certificate, if mutilated.
SECTION 4. VOTING AND ACTION BY TRUSTEE
Section 4.01. VOTING OF SHARES. So long as the Trustee shall hold
shares deposited pursuant to the provisions of this Agreement, he shall vote
all shares held pursuant to this Agreement in favor of any one candidate for
the Board of Directors nominated by Cohig, following acceptance of such
candidate by the Certificate Holders, as provided in Section 3(t) of the
Underwriting Agreement. As to any other matter whatsoever, including without
limitation election of Directors other than a Director nominated by Cohig
where multiple Directors are to be elected or where Cohig has made no
nomination accepted by the Certificate Holders pursuant to the terms of the
Underwriting Agreement, the Trustee shall vote the shares held pursuant to
this Agreement as the beneficial owner shall instruct. In the event the
beneficial owner of any such shares does not provide any instruction as to
how to vote any shares held by the Trustee, the Trustee shall abstain from
voting such shares as to the matter upon which he has received no voting
instructions. Any instructions to the Trustee shall be in such form as the
Trustee may require in his sole discretion. Subject to Section 5.01 and 5.02
hereinbelow, the Trustee may receive dividends and distributions on said
shares. Except as provided herein, no other person shall have any voting
rights in respect to said shares so long as this Agreement is in effect and
such shares are registered in the name of the Trustee. The right of the
Trustee to vote, assent, or consent, as provided in this Section 4.01, shall
include all matters,
4
<PAGE>
including but not limited to the right to vote at any election of directors
and in favor of or in opposition to any resolution or proposed dissolution
and liquidation, merger, or consolidation of the Company, or a sale of all or
substantially all of its assets, or the issuance or creation of additional of
its securities, or any action of any character whatsoever which may be
presented at any meeting or require the consent of shareholders of the
Company.
Section 4.02. TRUSTEE'S RELATIONSHIP WITH COMPANY. The Trustee, his
employees or agents, and any firm or corporation of which he may be a member,
agent, or employee, and any corporation, trust, or association of which he
may be a trustee, stockholder, director, officer, agent, or employee may
contract with or be or become pecuniarily interested, directly or indirectly,
in any matter or transaction to which the Company or any subsidiary or
controlled or affiliated corporation may be a party or in which it may be
concerned, as fully and freely as though such Trustee were not a Trustee
hereunder. The Trustee acts as counsel to the Company and may continue to
act as such counsel to the Company or of any such subsidiary or controlled or
affiliated corporation.
Section 4.03. COMPENSATION OF TRUSTEE. The Trustee shall serve
without compensation. However, nothing shall disqualify the Trustee from
receiving compensation for services rendered to the Company.
Section 4.04. EXPENSES. The Trustee is expressly authorized to incur
and pay such reasonable expenses and charges, to employ and pay such agents,
attorneys, and counsel, and to incur and pay such other charges and expenses
as he may reasonably deem necessary and proper for administering this
Agreement. Certificate Holders severally agree to reimburse and indemnify the
Trustee in proportion to such Certificate Holder's beneficial interest in the
trust, for and against any and all such claims, expenses, and liabilities
incurred by them, or asserted against him, in connection with or growing out
of this Agreement or the discharge of his duties hereunder. Any such claims,
expenses, or liabilities not so paid by the Certificate Holder may be
deducted from dividends or other distributions to them, or may be made a
charge payable as a condition to the delivery of shares in exchange for
Voting Trust Certificates as provided herein, and the Trustee shall be
entitled to a lien therefor upon the shares, funds, or other property in his
possession.
Section 4.05. TRUSTEE'S LIABILITY. The Trustee shall not be liable in
any event for the acts or defaults of any successor Trustee or for acts or
defaults of any employee, agent, proxy, or attorney-in-fact of any Trustee.
The Trustee shall always be protected and free from liability in acting upon
any notice, request, consent, certificate, declaration, telegram, radiogram,
guaranty, affidavit, or other paper or document, or signature believed by him
to be genuine and to have been signed by the proper party or parties, or by
the party or parties purporting to have signed the same. The Trustee shall
not be liable for any error of judgment nor for any act done or omitted, nor
for any mistake of fact or law, nor for anything which he may do or refrain
from doing in good faith, nor shall the Trustee have any accountability
hereunder, except for his own gross negligence. The Trustee may seek the
advice of legal counsel, and any action under this Agreement taken or
suffered in good faith by him in accordance with the opinion of such counsel
shall be conclusive upon the parties hereto, and the Trustee shall be fully
protected and be subject to no liability in respect thereof. No Trustee
shall be
5
<PAGE>
required to provide a bond or other security for the performance of the
duties of Trustee under this Agreement.
SECTION 5. DIVIDEND, DISTRIBUTION, AND SUBSCRIPTION RIGHTS OF CERTIFICATE
HOLDERS
Section 5.01. CASH DIVIDENDS. The registered Certificate Holder shall
be entitled, until the termination of this Agreement as hereinafter provided,
to receive from time to time payments equal to the amount of cash dividends,
if any, collected or received by the Trustee or his successor upon the number
of shares in respect of which such Voting Trust Certificates were issued,
less the deductions provided for in Section 5.05. Such payments shall be
made as soon as practicable after the receipt of such dividends, to the
Certificate Holder registered as such at the close of business on the record
date determined pursuant to the provisions of Section 5.06. In lieu of
receiving cash dividends and paying such dividends to the Certificate Holder,
the Trustee may instruct the Company in writing to pay such dividends
directly to the Certificate Holder. Upon giving such instructions to the
Company, all liability of the Trustee with respect to such dividends shall
cease until the instructions are revoked. The Trustee may at any time revoke
such instructions, and by written notice to the Company, direct it to make
dividend payments to the Trustee.
Section 5.02. SHARE DIVIDENDS. In case the Trustee shall receive, as
a dividend or other distribution upon any shares of stock held by him under
this Agreement, any additional shares of the Company, the Trustee shall hold
the same subject to this Agreement for the benefit of the Certificate Holder,
and said shares shall be and become subject to all of the terms and
conditions hereof to the same extent as if originally deposited hereunder.
The Trustee may, in his discretion, issue Voting Trust Certificates in
respect of such shares to the Certificate Holder of record at the close of
business on the record date determined pursuant to the provisions of Section
5.06.
Section 5.03. DISTRIBUTIONS ON LIQUIDATION. In the event of the
dissolution or total or partial liquidation of the Company, whether voluntary
or involuntary, the Trustee shall receive the moneys, securities, rights, or
property to which the Certificate Holder as a shareholder of the Company are
entitled, and shall distribute the same among the Certificate Holder in
proportion to his interest, as shown by the books of the Trustee.
Section 5.04. OTHER DISTRIBUTIONS TO SHAREHOLDERS. If at any time
during the continuation of this Agreement the Trustee shall receive or
collect any moneys through a distribution by the Company to its shareholders,
other than in payment of cash dividends, or shall receive any property (other
than shares of stock of the Company) through a distribution by the Company to
its shareholders, the Trustee shall distribute the same to the Certificate
Holder registered as such at the close of business on the record date
determined pursuant to the provisions of Section 5.06; provided that the
Trustee may withhold therefrom the deductions provided for in Section 5.05.
Section 5.05. DEDUCTIONS FOR DISTRIBUTIONS. There shall be deducted
and withheld from every distribution of every kind under this Agreement any
taxes, assessments, or other charges that may be required by any present or
future law to be deducted or withheld, and expense and charges
6
<PAGE>
incurred pursuant to Section 4.05 hereof, to the extent that such
compensation, expense, and charges incurred pursuant to Section 4.05 hereof
remain unpaid or unreimbursed.
Section 5.06. RECORD DATE FOR DISTRIBUTIONS. The Trustee may, if he
deems it advisable, fix a date not exceeding twenty (20) days preceding any
date for the payment or distribution of dividends or for the distribution of
assets or rights as a record date for the determination of the Certificate
Holder entitled to receive such payment or distribution, and the Certificate
Holder of record on such date shall be exclusively entitled to participate in
such payments or distributions. In any case in which the Trustee shall fail
to fix such a record date, the date three (3) days prior to the date of
payment of distribution of dividends or the distribution of assets or rights
shall constitute the record date for the determination of the Certificate
Holder entitled to receive such payment or distribution.
Section 5.07. SUBSCRIPTION RIGHTS. In case any securities of the
Company shall be offered for subscription to the holder of stock held by the
Trustee under this Agreement, the Trustee, promptly upon receipt of notice of
such offer, shall mail a copy thereof to the Certificate Holder of record.
Upon receipt by the Trustee at least ten (10) days prior to the last date
fixed by the Company for subscription, of a request from the registered
Certificate Holder to subscribe in his behalf, accompanied by the sum of
money required to be paid for such securities, the Trustee shall make such
subscription and payment on behalf of the Certificate Holder, and upon
receiving from the Company the certificates for the securities so subscribed
for, shall issue to such Certificate Holder a Voting Trust Certificate in
respect thereof if the same be shares, or if the same be securities other
than voting stock, then the Trustee shall deliver the same to the Certificate
Holder.
SECTION 6. BOOKS AND RECORDS
Section 6.01. RECORD OF SHARES. It shall be the duty of the Trustee
to maintain a record of all share certificates of the Company which are
transferred to the Trustee, indicating the name in which the stock was held,
the date of issuance of the stock, the class and series of the stock, the
number of shares, and the number of the certificate or certificates
representing those shares. The Trustee shall also maintain a record of the
date on which any such share certificates were received by him, and the date
on which the same were delivered to the Company for transfer to the Trustee,
and shall obtain a receipt for any such certificates so delivered. The
Trustee shall receive and hold the new share certificates issued by the
Company in the name of the Trustee and shall maintain a record indicating the
date of issuance of such certificates, the date of receipt of such
certificates, and the place in which such certificates are held by him.
Section 6.02. RECORD OF TRUST CERTIFICATES. The Trustee shall
maintain a record showing the names and addresses of the Certificate Holders.
The record shall show the number of Voting Trust Certificates held by each
person and the total number of Voting Trust Certificates so held. The record
shall show the dates on which the Voting Trust Certificates were issued,
canceled, transferred, or replaced. The record shall be known as the
certificate record book and shall be open to inspection by any of the parties
to this Agreement or their successors at any reasonable time. The first
Certificate Holders to appear in the certificate record book shall be the
parties to this Agreement to
7
<PAGE>
whom Voting Trust Certificates are to be issued. The record shall show any
subsequent transfer, assignment, pledge, attachment, execution, and any other
matter affecting the title to such certificates which come to the attention
of the Trustee. Any documents, including Voting Trust Certificates, which
are canceled, purporting to affect the title of the Voting Trust
Certificates, shall also be kept in the certificate record book, together
with a sample copy of the Voting Trust Certificate. The certificate record
book may be closed from time to time by the Trustee for a period not to
exceed five (5) days. Notice of such closing shall be given to all parties
to this Agreement at least ten (10) days prior to such closing. The closing
of the book shall not affect the right to inspection. Upon the closing of
the book, the Certificate Holders shown therein at the close of business on
the last day the book was open shall, for all purposes, be the Certificate
Holders during the entire period during which the book is closed.
Section 6.03. BOOK OF ACCOUNTS. The Trustee or his agent shall
maintain a book of accounts. In addition to such other matters as the
Trustee may insert in such record, the record shall show all sums of money
received by the Trustee, all disbursements made by the Trustee, and all
obligations incurred by the Trustee which are unpaid. Information concerning
the above accounts shall be posted at least monthly.
Section 6.04. OTHER RECORDS. The Trustee shall maintain such other
books and records and shall perform the duties required of him to be
performed elsewhere in this Agreement and as are reasonably necessary to
accomplish the purposes of this Agreement.
Section 6.05. INSPECTION OF RECORDS. The books and records of this
Trust shall be open to inspection by any of the parties to this Agreement or
their successors at any reasonable time. The inspection shall be made at the
office of the Trustee and shall include the right to make copies of the books
and records; provided, however, that any such activity must be conducted with
reasonable notice first given to the Trustee. In the event of a dispute, the
matter shall be referred to the Trustee for his decision as to the
reasonableness of the request for inspection and copying.
SECTION 7. TERM OF TRUST
Section 7.01. IRREVOCABILITY OF TRUST. Except as otherwise provided
in this Agreement, the Trust created by this Agreement is hereby expressly
declared to be irrevocable.
Section 7.02. TERMINATION. This Agreement shall terminate May 11,
2002. This Agreement may be terminated at an earlier date by an instrument or
instruments in writing executed by the Trustee and each party.
Section 7.03. RETURN OF SHARE CERTIFICATES AFTER TERMINATION. Within
thirty (30) days after the termination of this Agreement, the Trustee shall
deliver to the Certificate Holders of record Share Certificates,
representing the number of shares in respect of which Voting Trust
Certificates were issued, upon the surrender of such Voting Trust
Certificates properly endorsed and upon payment by the persons entitled to
receive such share certificates of a sum sufficient to cover any governmental
charge on the transfer or delivery of such certificates.
8
<PAGE>
Section 7.04. FINAL ACCOUNTING. Within thirty (30) days after
termination of this Agreement, the Trustees shall render a final accounting
to the Certificate Holders and to the Company and shall distribute any funds
or other assets held by them to the parties entitled thereto.
SECTION 8. MISCELLANEOUS
Section 8.01. PLACE OF PERFORMANCE. This Agreement is made, executed,
and entered into at San Diego, California, and it is mutually agreed that the
performance of all parts of this contract shall be made at San Diego,
California.
Section 8.02. GOVERNING LAW AND VENUE. This Agreement is intended by
the parties to be governed and construed in accordance with the laws of the
State of California. Venue for any action brought regarding the provision of
this Agreement shall be brought in the County of San Diego.
Section 8.03. SEVERABILITY OF PROVISIONS. This Agreement shall not be
severable or divisible in any way, but it is specifically agreed that should
any provision herein be or become invalid, that such invalidity shall not
affect the validity of the remainder of the Agreement.
Section 8.04. CONSTRUCTION BY TRUSTEE. The Trustee is authorized and
empowered to construe this Agreement, and his reasonable construction made in
good faith shall be conclusive and binding upon the Certificate Holders and
upon all parties hereto.
Section 8.05. DEFINITIONS. Except as specifically provided herein,
the use of the words "Trustee," "Certificate Holder, " "shareholder" and
other similar words, for the purpose of this Agreement shall be deemed to
mean their successors, heirs, administrators, executors, assigns, and other
persons standing in the place of the party referred to whenever appropriate.
The term "Trustee" as used in this Agreement and in the Voting Trust
Certificates shall apply to the Trustee named in this Agreement and to any
additional Trustees appointed, and to their successors. Pronouns of one
gender shall be deemed to refer to other genders, and the singular shall
refer to the plural, and the plural shall refer to the singular when
appropriate. No inference shall be drawn from the use of one gender or the
singular or plural other than as indicated above.
Section 8.06. MERGER OR CONSOLIDATION. In the event that the Company
shall merge into or consolidate with another corporation or corporations, or
in the event that all or substantially all of the assets of the Company are
transferred to another corporation, the shares of which are issued to
shareholders of the Company in connection with such transfer, then the term
"Company" shall be construed to include such successor corporation, and the
Trustee shall receive and hold under this Agreement any shares of such
successor corporation received by him on account of their ownership, as
Trustee of shares held by them hereunder prior to such merger, consolidation,
or transfer. Voting Trust Certificates issued and outstanding under this
Agreement at the time of such merger, consolidation, or transfer may remain
outstanding, but the Trustees may, in their discretion, substitute therefor
new Voting Trust Certificates in appropriate form.
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<PAGE>
Section 8.07. NOTICE TO TRUSTEE. Any notice to be given to the
Trustee hereunder shall be sufficiently given if mailed to the Trustee at
Fisher Thurber LLP, 4225 Executive Square, Suite 1600, La Jolla, California
92037, or at such other address as the Trustee may from time to time
designate by written notice given to the Certificate Holders.
Section 8.08. NOTICE TO CERTIFICATE HOLDERS. Any notice to be given
to the Certificate Holders shall be sufficiently given if mailed, postage
prepaid, to the registered Certificate Holder of such Voting Trust
Certificate at the address of such registered Certificate Holder appearing on
the certificate book to be maintained by the Trustee. Every notice so given
shall be effective whether or not received, and such notice shall for all
purposes be deemed to have been given on the date of mailing thereof.
Section 8.09. NOTICE AND REPORTS FROM COMPANY TO CERTIFICATE HOLDERS.
The Company agrees (i) to mail to each Certificate Holder, not less than
thirty (30) days before each annual meeting of shareholders, the annual
report of the Company, if required to be provided; (ii) to mail to each
Certificate Holder notice of each annual and special meeting of shareholders
in the same manner and same time as if the Certificate Holder were a
shareholder; and (iii) to keep the books and records of the Company open at
all reasonable times to the inspection of all Certificate Holders.
Section 8.10. EXECUTION OF COUNTERPARTS. This Agreement shall be
prepared in multiple copies and forwarded to each of the parties hereto for
execution. The Agreement will become effective when the Trustee receives a
copy or copies of the Agreement executed by the parties hereto in the names
as they appear at the end of this Agreement. However, such effectiveness
shall relate back to May 11, 1998. All of the signatures may be affixed to
one copy or to separate copies, and when all such copies are received and
signed by all the parties hereto, they shall constitute one Agreement which
is not otherwise separable or divisible. The Trustee shall keep all of such
signed copies and shall conform one copy to show all of the signatures and
the dates thereof and shall mail a copy of such conformed copy to each of the
parties hereto within thirty (30) days after the receipt by him of the last
signed copy, and shall cause one such conformed copy to be filed in the
office of the secretary of the Company.
Section 8.11. ADVICE OF COUNSEL. Each of the parties agrees and
represents that he has been represented by his own counsel with regard to the
execution of this Agreement or that, if acting without counsel, he has had
adequate opportunity and has been encouraged to take the advice of his own
counsel prior to the execution of this Agreement.
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In witness whereof, the parties have duly executed this Agreement on the
first date set forth below.
CERTIFICATE HOLDERS:
<TABLE>
<CAPTION>
Number of Date of
Shares Signing
<S> <C> <C>
/s/ James A. Scudder 561,274 May 14, 1998
- -----------------------------------
JAMES A. SCUDDER
/s/ James L. Berntsen 453,923 May 14, 1998
- -----------------------------------
JAMES L. BERNTSEN
L.L. KNICKERBOCKER, INC.
BY: /s/ Louis L. Knickerbocker 858,673 May 14, 1998
- -----------------------------------
LOUIS L. KNICKERBOCKER
PRESIDENT
TRUSTEE:
/s/ David A. Fisher May 14, 1998
- -----------------------------------
DAVID A. FISHER
COMPANY:
ONTRO, INC. COHIG & ASSOCIATES, INC.
A CALIFORNIA CORPORATION
BY: /s/ James L. Berntsen BY: /s/ Russell K. Bean
- ----------------------------------- -----------------------------------
JAMES L. BERNTSEN RUSSELL K. BEAN
EXECUTIVE VICE PRESIDENT TITLE: ____________________________
May 14, 1998 May 14, 1998
</TABLE>
<PAGE>
EXHIBIT 10.36
FORM OF STOCK PURCHASE AGREEMENT
BETWEEN THE COMPANY AND THE SHAREHOLDERS
IDENTIFIED ON THE ATTACHED SCHEDULE
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made effective as of
March 28, 1998 by and between_________________________________________
(Shareholder"); Ontro, Inc., a California Corporation (the "Company" or
"Ontro"); and Insta-Heat, Inc., a California corporation ("IHI").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE OF IHI STOCK.
1.1 OWNERSHIP OF IHI STOCK. Shareholder is the beneficial owner
of _______________ common shares of IHI. Subject to the terms and conditions
of this Agreement, Shareholder agrees to sell all of his or her IHI shares to
Ontro for $25.00 per share (the "Purchase Price"). Shareholder hereby
authorizes the custodian of the shares, L. Kevin Mineo, Esq., to deliver to
Ontro all of his or her IHI shares and agrees to accept the Purchase Price as
payment in full therefore.
1.2 CLOSING. The purchase and sale of the IHI shares shall take
place at the offices of the Company or at such other place as Ontro, IHI and
Shareholder mutually agree upon, verbally or in writing (which time and place
are designated as the "Closing"). The Closing shall take place on the
earlier to occur of (i) fifteen (15) days after the closing of an initial
public offering of Ontro's common stock; or (ii) six (6) months from the date
of this Agreement. At the Closing, Mr. Mineo shall deliver to Ontro the
share certificate(s) representing the IHI shares to be sold, and
Shareholder's duly endorsed stock power. Ontro shall deliver a check in the
amount of the Purchase Price payable to the Shareholder. The Closing may take
place via the U.S. mail or other mail courier service if agreed to by the
parties.
2. TERMINATION OF LICENSE AGREEMENT.
2.1 Shareholder hereby consents and agrees to the termination of
the License Agreement between Insta-Heat, Inc. and Ontro, Inc.
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER. This Agreement is
made with Shareholder in reliance upon Shareholder's representations and
warranties to Ontro and to IHI, which by Shareholder's execution of this
Agreement Shareholder hereby confirms, that:
3.1 AUTHORIZATION. This Agreement constitutes Shareholder's
valid and legally binding obligation, enforceable in accordance with its
terms.
3.2 DISCLOSURE OF INFORMATION. Shareholder believes he or she
has received all the information regarding Ontro and IHI, he or she considers
material or desirable in order to decide to sell
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his or her shares of IHI to Ontro. Shareholder further represents that he or
she has had an opportunity to ask questions and receive answers from IHI
regarding Ontro, its business and the terms and conditions of this transfer,
and has had the opportunity to consult with his/her attorney, tax and
investment advisors, and other advisors, has access to such counsel and
advisors and has sought and received such advice and counsel to the extent
desired.
3.3 CONFIDENTIALITY. Shareholder hereby represents, warrants
and covenants that he or she shall maintain in confidence, and shall not use
or disclose without the prior written consent of Ontro, any information about
Ontro furnished to him or her by Ontro, or by IHI whether or not such
information was acquired or disclosed in connection with this Agreement.
This obligation of confidentiality shall not apply, however, to any
information (a) in the public domain through no unauthorized act or failure
to act by Shareholder, or (b) lawfully disclosed to Shareholder by a third
party who possessed such information without any obligation of
confidentiality.
3.4 ADVICE OF PROFESSIONALS. The undersigned has carefully
considered and has been advised by Ontro to have any material provided by
anyone regarding Ontro including but not limited to this Agreement, related
documents and the shares hereunder reviewed by his or her legal counsel prior
to such sale, and to discuss with his or her professional tax and financial
advisors the consequences of the sale of the shares hereunder for his or her
particular tax and financial situation, and he or she has determined to sell
his or her shares. Ontro specifically disclaims any representations regarding
the legal, tax, or financial consequences of the sale.
3.5 NO ENCUMBRANCES. The undersigned represents there are no
liens, encumbrances or security interests granted to third parties with
respect to the shares, and the shares may be transferred to Ontro free of any
prior sale, transfer, hypothecation or encumbrance.
3.6 AUTHORITY. If this Agreement is executed and delivered on
behalf of a partnership, corporation, trust, estate or other entity, (i) the
undersigned's execution, delivery and performance of and under this
Agreement, and all documents ancillary hereto, and the consummation of the
transactions contemplated hereby and thereby have been duly authorized, and
the undersigned is duly authorized (a) to execute and deliver this Agreement
and all other instruments executed and delivered on behalf of such
partnership, corporation, trust, estate or other entity, in connection with
the sale of the shares hereunder; and (b) when executed and delivered by
Shareholder this Agreement will constitute such partnership's, corporation's,
trust's, estate's or other entity's legal, valid and binding obligation
enforceable against it in accordance with its terms.
3.7 LEGENDS. It is understood by Ontro that the certificates
evidencing the shares may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO INSTA-HEAT, INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by the laws of the State of
California or other jurisdiction, including any legend required by the
California Department of Corporations and section 417 and 418 of the
California Corporations Code.
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<PAGE>
3.8 REMOVAL OF LEGENDS; FURTHER COVENANTS.
(a) Any legend endorsed on a certificate pursuant to
Section 3.7 hereof shall be removed (i) if the shares represented by such
certificate shall have been effectively registered under the Securities Act
or otherwise lawfully sold in a public transaction, (ii) if the shares may be
transferred in compliance with Rule 144(k) promulgated under the Securities
Act, or (iii) if Ontro shall have provided Insta-Heat with an opinion of
counsel, in form and substance acceptable to Insta-Heat and its counsel in
their sole discretion and from attorneys reasonably acceptable to Insta-Heat
and its counsel, stating that a public sale, transfer or assignment of the
shares may be made without registration.
(b) Ontro further covenants that Ontro will not transfer
the shares in violation of the Securities Act, the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), or the rules of the Commission
promulgated thereunder, including Rule 144 under the Securities Act.
3.9 ACKNOWLEDGMENT. The undersigned acknowledges he/she
understands the meaning and legal consequences of the representations and
warranties contained in this Agreement, and the undersigned hereby agrees
IHI, Ontro and each officer, director, employee, agent, legal counsel and
controlling person of Ontro and IHI, past, present or future, may rely on
each such representation and warranty.
3.10 NON-TRANSFERABILITY. Neither this Agreement, nor any of
your interests herein, shall be assignable or transferable by the undersigned
in whole or in part except by operation of law.
3.11 SURVIVAL. The foregoing representations and warranties
shall be true and accurate as of the date of the acceptance hereof by Ontro
and shall survive the execution and delivery of this Agreement and the
delivery of the shares thereafter.
3.12 INDEMNIFICATION. The undersigned shall indemnify and hold
harmless Ontro and IHI who was or is made a party, or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of or arising from any actual or alleged misrepresentation or
misstatement of facts or omission to represent or state facts made by the
undersigned to IHI or Ontro concerning himself/herself which is not remedied
by timely notice to Ontro and IHI against losses, liabilities and expenses
for which Ontro or IHI or any of their respective employees, agents, or
legal counsel which have not otherwise been reimbursed (including attorneys'
fees, judgments, fines and amounts paid in settlement) as actually and
reasonably incurred by such person or entity in connection with such action,
suit or proceeding.
3.13 DUE EXECUTION. The undersigned agrees to execute this
Agreement and the stock power attached hereto as Exhibit "A" in full and
acknowledges the receipt and acceptance by Ontro of such Agreement and stock
power shall be a condition precedent to the delivery of the Purchase Price.
4. CALIFORNIA CORPORATE SECURITIES LAW. THE TRANSFER OF THE SHARES OF
COMMON STOCK WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH COMMON STOCK OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE
SALE OF COMMON STOCK IS EXEMPT FROM QUALIFICATION BY SECTIONS 25100, 25102 OR
25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL
3
<PAGE>
PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
5. MISCELLANEOUS.
5.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of Shareholder contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing.
5.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding on the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assignees any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
5.3 GOVERNING LAW, VENUE. This Agreement shall be governed by
and construed under the laws of the State of California, irrespective of its
choice of law principles. Venue for any action brought in connection with
the subject matters of this Agreement shall be in a court of competent
jurisdiction located in San Diego County, California.
5.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or, if
sent by telex or telecopier, upon receipt of the correct answer back, or upon
deposit with the United States Post Office, by registered or certified mail,
or upon deposit with an overnight air courier, in each case postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party
may designate by 10 days' advance written notice to the other parties.
5.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in particular instance and whether retroactively or
prospectively), only with the written consent of Ontro, IHI and Shareholder.
5.8 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ONTRO, INC. SHAREHOLDER:
A CALIFORNIA CORPORATION
By: _______________________________ _____________________________
James A. Scudder, President Signature
______________________________
Name Printed
______________________________
Signature of Joint Shareholder
______________________________
Name Printed
IHI:
INSTA-HEAT, INC.
A CALIFORNIA CORPORATION
BY:_____________________________
James L. Bernsten, Vice President
5
<PAGE>
Exhibit "A"
STOCK POWER
FOR VALUE RECEIVED, THE UNDERSIGNED DOES (do) HEREBY SELL, ASSIGN AND
TRANSFER TO ______________________________________________________,
_____________________________SHARES OF THE COMMON STOCK INSTA-HEAT, INC.,
REPRESENTED BY CERTIFICATE(s) NUMBERED _______________________, INCLUSIVE,
STANDING IN THE NAME OF THE UNDERSIGNED ON THE BOOKS OF SAID COMPANY.
THE UNDERSIGNED DOES (DO) HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
____________________________ ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS
OF SAID COMPANY, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
_____________________________ ____________________
SIGNATURE OF SHAREHOLDER DATE
_____________________________ ____________________
JOINT SHAREHOLDER SIGNATURE DATE
IMPORTANT - READ CAREFULLY:
THE SIGNATURE(S) TO THIS POWER MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE(S) IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
6
<PAGE>
Exchange Agreement
Page 7
- ------------------
SCHEDULE "A"
L. Kevin Mineo
Dennis Webb
Daniel Gibbs
Harvey Ruben
Christopher Trust
Seibert Trust
McKay Trust
Allan Ligi
Yale Fowler
Curtis Colt
James Hopper
Dennis Huston
Ed Villaneuva
Rich Johnson
Frank Barone
Fernando Fregoso
John Caldwell
Kadane Trust
Andre Bell
William Winston
