As filed with the U.S. Securities and
Exchange Commission on
Registration No. -NY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Registration Statement
Under
The Securities Act of 1933
<TABLE>
<S> <C> <C>
New Jersey 2899 223-319-224
State of Standard Industrial IRS Employer
Incorporation Classification Code Identification No.
</TABLE>
PPA TECHNOLOGIES, INC.
163 South St.
Hackensack, New Jersey 07601
(201) 457-1221
Address, including zip code and telephone number, including area code of
registrant's principal executive offices and principal place of business or
intended principal place of business.
ROGER L. FIDLER
163 South St.
Hackensack, New Jersey 07601
(Name and Address of Agent for Service)
Copies of Communication to:
Roger L. Fidler, 163 South St., Hackensack, New Jersey 07601
(201) 457-1221
Steve Gutstein, Esq., Attorney at Law, 276 Fifth Avenue, New York, New York
10001
Approximate date of proposed sale to public: As soon as possible after the
effective date of the Registration Statement.
<TABLE>
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________
<S> <C> <C> <C> <C>
Title of Amount to be Proposed maximum Proposed maximum Amount
each class registered offering price aggregate(1) Registration
of Securities l per Unit (1) offering Price Fee
Units consisting
of 1 Share of
Common Stock
and 1 Class
A Warrant 1,150,000 $6.00 $6,900,000.00 $2,090.91
Common Stock,
no par value
per share,(2)
underlying
Class A
Warrants 1,150,000 $7.00 $8,050,000.00 $2,439.40
Underwriter's
warrants, no
par value 115,000 $0.001 $115.00 $0.04
Units, no
par value
per share,
underlying
Underwriter's
Warrants 115,000 $7.20 $828,000.00 $250.91
Units, no
par value
per share,
underlying
warrants in
Underwriter's
Warrant Units 115,000 $7.00 $805,000.00 $243.94
Total Registration-Fee ----------------------------- $ 5025.20
</TABLE>
The Exhibit Index is located at page 54
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 416 there are also being registered such additional
shares as may be issued pursuant to the anti-dilution provisions of the
Warrants.
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 of 1933 or on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
PPA TECHNOLOGIES, INC.
CROSS REFERENCE SHEET FOR PROSPECTUS
(Pursuant to Item 501 of Regulation S-K)
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Item No. Caption in Prospectus
<S><C> <C>
1. Forepart of the Registration
Statement and Outside Front Cover
Page of Prospectus............................Forepart, Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus...........................Inside Front Cover Page
3. Summary Information Risk Factors
and Ratio of Earnings
to-Fixed Charges.............................. Prospectus Summary
4. Use of Proceeds.............................. Use of Proceeds
5. Determination of offering Price.............. Description of
Units; Description of Capital Stock
6. Dilution..................................... Dilution
7. Selling Security Holders..................... Not Applicable
8. Plan of Distribution......................... Underwriting
9. Legal Proceedings............................ Legal Proceedings
10. Directors and Executive Officers............. Management
11. Security ownership of Certain
Beneficial owners and Management............. Principal Shareholders
12. Description of Securities to Be
Registered................................... Description of Units
13. Interest of Named Experts and
Counsel ..................................... Legal Counsel, Experts
14. Information With Respect To
The Registrant; Organization
with Five Years.............................. Prospectus Summary;
The Company; Dividend Policy; Selected Financial Information; Management's
Discussion Analysis of Financial Condition and Results of Operations;
Business; Management; Principal Shareholders; Certain Transactions;
Description of the Securities.
15. Disclosure of Commission
Position on Indemnification
For Securities Act Liabilities.................... Not applicable
16. Description of Business....................... Business of the Company
17. Description of Property....................... Business of the Company
18. Interest of Management and Others
in Certain Transactions....................... Certain Transactions;
Principal Shareholders
19. Certain Market Information.................... Risk Factors; Description
of Securities; Underwriting
20. Remuneration of Directors and officers........ Remuneration
21. Financial Statements.......................... Financial Statements
</TABLE>
PROSPECTUS
PPA TECHNOLOGIES, INC.
1,000,000 Units, Each consisting of One Share of
One Share of Common Stock and One Class A Redeemable
Common Stock Purchase Warrant,
offered at a price of $6.00 per Unit
_____________________________
All of the Units (the "Units") offered hereby (the "Offering"), each Unit
consisting of one share of common stock, without par value, (hereinafter
referred to as "Share" or "Share of Common Stock") and one "Class A"
Redeemable Common Stock Purchase Warrant (hereinafter referred to as the
"Warrants" or "Redeemable Warrants"), exercisable into one share of common
stock per warrant for a period of one year from the effective date ("Effective
Date") of the registration statement of which this prospectus (this
"Prospectus") is a part at an exercise price of $7.00 per share, are being
offered by PPA Technologies, Inc. (the "Company" or "PPA"). The Warrants are
redeemable at the Company's option commencing [ ] (90 days after the
effective date (the "Effective Date")of the registration statement (the
"Registration Statement") of which the Prospectus is a part) upon 30 days
notice to the Warrant holders at $.05 per Warrant if the closing bid price of
the Common Stock in the over-the-counter market as reported by ("NASD") shall
have for a period of 30 consecutive trading days ending within 15 days of the
notice of redemption average in excess of $8.50 per share (subject to
adjustments in the case of a stock split, stock dividend, recapitalization or
similar event). Since it is the Company's present intention to exercise such
right, Warrant holders should presume that the Company would call the
Redeemable Warrants for redemption if such criteria are met. The Redeemable
Warrants are immediately detachable and separately tradeable from the Units
upon issuance. It is anticipated that the Shares of Common Stock and
Redeemable Warrants will be included on the NASDAQ Small-Cap Market ("Nasdaq")
under the symbols "PPAS" and "PPAW", respectively.
Prior to the offering, there has been no market for the securities of the
company. There can be no assurance that a market for the company's securities
will develop after completion of this offering or, if developed, that it will
be maintained. As a consequence of such a limited market, a purchaser of the
Shares may be unable to sell the Shares when desired and may have to hold the
Shares indefinitely. See "Risk Factors - Limited Trading Market." The
determination of the offering price of the Shares was made arbitrarily by the
Company. See "Risk Factors - Arbitrary Offering Price."
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL DILUTION TO
PUBLIC INVESTORS. A PROSPECTIVE PURCHASER MAY LOSE HIS TOTAL INVESTMENT. SEE
"RISK FACTORS" AND "DILUTION."
__ ___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY It is A CRIMINAL OFFENSE.
_________________________________________________________________
_________________________________________________________________
<TABLE>
<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public Discounts(l) Company(2)
_________________________________________________________________
Per Unit $6.00 $0.60 $5.40
_________________________________________________________________
Total(3) $6,000,000 $600,000 $5,400,000
_________________________________________________________________
_________________________________________________________________
</TABLE>
(1) The Company will agree, subject to the sale of at least 1,000,000 Units
being offered hereby, to pay to Kenneth Jerome & Co., as the representative of
the several Underwriters (the "Representative") the Underwriting Discounts.
Additionally, the Company agrees: (i) to indemnify the Underwriter or Dealer
against certain liabilities, including liabilities under the Securities Act of
1933; and, (ii) to sell to the Underwriter, at a nominal price, warrants to
purchase 10% of the number of Units sold by the Underwriter or Dealers, with
an exercise price of $7.20 per Unit, which warrants shall be exercisable for
four years commencing one year after issuance.(See "Underwriting.")
(2) Before deducting expenses payable by the Company in connection with the
Offering estimated at approximately $347,000. These expenses include filing
fees, printing, a 3% non-accountable fee to the Underwriters, legal and
accounting fees. Net proceeds to the Company after such expenses are estimated
to be $5,053,000.
(3) The Company has granted to the Underwriters an option (the "Over-Allotment
Option") exercisable within 45 days after the date of this Prospectus to
purchase up to 150,000 additional Units, upon the same terms and conditions as
set forth above, solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to Public, Underwriting Discounts, and
Proceeds to Company will be $6,900,000, $690,000, and $6,210,000,
respectively. See "Underwriting."
The date of this Prospectus is 1997.
Kenneth Jerome & Company, Inc.
In connection with this offering, the Underwriters may over-allot or effect
transactions which stabilize or maintain the market price of the Units and the
components thereof at a level above that which might otherwise prevail in the
open market. Such transactions may be effected on the NASDAQ SmallCap market.
Such stabilizing, if commenced, may be discontinued at any time.
The Units are offered by the underwriters subject to prior sale, to allotment
and withdrawal, and to cancellation or modification of the offer, without
notice. The Underwriters reserve the right, in their sole discretion, to
reject any order, in whole or in part, for the purchase of any Units. In
addition, each Underwriter reserves the right to cancel any confirmation of
sale, even after the purchase price has been paid, if, in the opinion of that
Underwriter, completion of such sale would violate Federal or State securities
laws or a rule or policy of The National Association of Securities Dealers,
Inc.
AVAILABLE INFORMATION
The Company intends to file with the Securities and Exchange Commission (the
"Commission"), New York, New York, a registration statement on Form SB-2 under
the Act with respect to the Units offered hereby. For further information
about the company and the securities being offered hereby, reference is made
to the registration statement and to the financial statements and exhibits
filed as a part thereof. Statements contained in this Prospectus as to the
contents of any contract or any other document are not necessarily complete,
and in each instance, reference is made to the copy of such contract or
document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference. The registration
statement, including exhibits thereto, may be inspected without charge at the
Commission's principal office in Washington, D.C., and the Northeast Regional
Office located at 7 World Trade Center, New York, New York and copies of all
or any part thereof may be obtained from such offices after payment of the
fees prescribed by the Commission.
Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements as soon as practicable at the end of
each fiscal year, commencing with the next fiscal year. In addition, the
Company may, from time to time, issue unaudited interim reports and financial
statements.
Glossary
Coalescent - A liquid material which when exposed to the environment becomes a
solid.
Volatile Organic Compound ("VOC") - liquid substances which evaporate when
exposed to the environment.
Coupling Agent - A material which can either bond two materials together with
greater strength or, alternatively, can also serve to bond two different
materials together more weakly.
Resin - Organic polymer.
Hologenated - Compounds containing a halogen, e.g. chlorine or flourine.
Phr - Parts per hundred of resin.
V0 - Flame spread rate.
Plate-out - Bloom to the surface of mobile phases.
Cross-linking - Establishment of chemical bonds between different substances.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed information
and financial statements, including the notes thereto, appearing elsewhere in
this Prospectus and, accordingly, should be read in conjunction with such
information and statements.
The Company
PPA Technologies, Inc. (the "Company" or "PPA") was incorporated on July 22,
1994 under the laws of the State of New Jersey. The Company's principal
offices are located at 163 South St., Hackensack, NJ 07601 and its telephone
number is (201) 457-1221.
PPA Technologies, Inc., hereinafter referred to as PPA Technologies or "the
Company", was formed to develop and manufacture innovative specialty chemical
products with applications in the plastics and coatings industries. After
research, development and testing, PPA has begun to sell certain products.
In general, PPA Technologies' products improves processing and/or the end
product. This is accomplished through its proprietary Coupling Agents and
Reactive Coalescents. In these areas, the Company's products are an advance
in environmental performance, product performance, cost performance, or, in
many cases, performance in more than one of these parameters. (See "Business
of the Company").
The Offering
The Company is offering hereby through the Underwriter on a "firm commitment
basis" 1,000,000 Units at an offering price of $6.00 per Unit. Each Unit is
comprised of one (1) share of common stock (no par value per share) and one
(1) Class A redeemable common stock purchase warrant exercisable for five
years from the Effective Date at an exercise price of $7.00 per common share.
The Redeemable Common Stock Purchase Warrants (hereinafter referred to as the
"Warrants" or "Redeemable Warrants") are redeemable at the Company's option
commencing [ ] (90 days after the Effective Date) upon 30 days notice
to the Warrant holders at $.05 per Warrant if the closing bid price of the
Common Stock in the over-the-counter market as reported by NASDAQ shall have
for a period of 30 consecutive trading days ending within fifteen days of the
notice of redemption average in excess of $8.50 per share (subject to
adjustments in the case of a reverse stock split, stock dividend, etc.). The
Redeemable Warrants are immediately detachable and separately tradeable from
the Units upon issuance. The offering price of the Units and the exercise
price of the Redeemable Warrants were determined by the Company and the
Underwriter. Such prices bear no relation to the book value, assets or
earnings of the Company, or to any other generally recognized objective
criteria of value.
Common Stock:
On June 20, 1996, the stockholders approved an increase in the authorized
capital to 10,000,000 Shares of Common Stock par value, and 1,000,000 shares
of preferred stock having a par value of $100.00 each. On June 28, 1996 the
Board of Directors effected a 1,000 to 1 stock split upon the filing of the
Amendment of the Certificate of Incorporation authorized by the stockholders.
All financial and stock related numbers set forth herein reflect this stock
split, except where otherwise specifically stated.
Common Stock Outstanding at June 30, 1997 ....... 1,555,000(1)
Preferred Stock Outstanding at June 30, 1997 ..... 3261(1)
To be offered(2) ................................ 1,000,000
To be outstanding after the offering(2).......... 2,555,000
Use of Proceeds........... The Company intends to use the net proceeds of this
offering principally for working capital purposes, including the general
expansion of its business, the development of new products, the acquisition of
equipment and other general business purposes. The proceeds of this Offering
will enable the Company to expand marketing of its entire line of products, to
build an inventory of such products and to market and advertise them. (See
"Use of Proceeds.")
Risk Factors and Dilution ..... Prospective Investors should carefully
consider the factors described under the captions "Risk Factors" and
"Dilution."
NASDAQ
Proposed Listing Symbol (3) .............................PPAS, PPAW
______________
(1) Does not include an aggregate of 500,000 shares reserved for issuance
under the Company's Stock Grant and Stock Option Plans nor does it include
options on 1,275,000 shares, exerciseable at $1.00 per share, held by
management.
(2) Does not include the exercise of any of the Redeemable Warrants contained
in said Units, nor the exercise of any Underwriter's Warrants or the Unit
Warrants contained in the Units issuable upon the exercise of the
Underwriter's Warrants, nor the outstanding warrants held by current
shareholders.
(3) The Company intends to apply for and anticipates listing on the NASDAQ
Small Cap Market, but there can be no guarantee that such listing will be
approved, or if approved that such listing will be maintained, or if listed
that a market will develop or if developed, that such market will be
sustained.
SUMMARY FINANCIAL INFORMATION
The following table summarizes certain selected financial data of the Company
and is qualified in its entirety by the more detailed financial statements
contained elsewhere in this Memorandum.
<TABLE>
Income Statement:
<S> <C> <C> <C>
Year Ending Year Ending Year Ending
June 30,1995 June 30, 1996 June 30, 1997
Sales 226,202 155,525 131,335
Cost Of Goods 156,348 104,552 61,453
Gross Profit 69,854 50,973 69,882
Operating Expenses 181,651 165,388 211,080
Other Income -0- -0- -0-
Other Expenses -0- -0- 3065
Net Profit(Loss) (111,797) (114,715) (144,263)
Per share (0.07) (0.08) (0.09)
Shares Outstanding 1,555,000 1,555,000 1,555,000
Dividends -0- -0- -0-
</TABLE>
<TABLE>
<S> <C> <C>
Balance Sheet
as of: June 30, 1997 As Adjusted(1)
Cash And Cash Equivalents 210,657 5,263,657
Working Capital (deficit) (57,332) 4,995,668
Total Assets 290,976 5,343,976
Current Liabilities 313,401 313,401
Long Term Debt -0- -0-
Stockholders' (deficit) (22,425) 5,030,575
Equity
</TABLE>
(1) Gives effect to the issuance and sale of the maximum 1,000,000 Units
offered hereby and the receipt of the estimated net proceeds ($5,053,000)
before their application. This does not take into account any potential
revenues from the 150,000 Units allotted for the over-allotment. See "Use of
Proceeds".
RISK FACTORS
The Units being offered hereby are speculative and involve a high degree
of risk. In addition to the other information in this Prospectus, prospective
investors, prior to making an investment, should carefully consider the
following risks and speculative factors inherent in and affecting the business
of the Company and this offering.
Risks Associated With Forward-Looking Statements. This Prospectus
contains certain forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities and Exchange Act of
1934, as amended, (the "Exchange Act" and the Company intends that such
forward-looking statements be subject to the safe harbors for such statements
under such sections.
The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will continue to design,
market and provide new products and services on a timely basis, that
competitive conditions in the polymers and additives markets will not change
adversely or materially, that demand for the Company's products will continue
or increase, that the market will accept the Company's new and existing
products, that the Company will retain and add qualified sales, research and
systems integration personnel and consultants, that the Company's forecasts
will accurately anticipate market demand, and that there will be no material
adverse change in the Company's operations or business. The foregoing
assumptions are based on judgments with respect to, among other things, future
economic, competitive and market conditions, and future business decisions,
all of which are difficult or impossible to predict accurately and many of
which are beyond the Company's control. Accordingly, although the Company
believes that the assumptions underlying the forward-looking statements are
reasonable, any such assumption could prove to be inaccurate and therefore
there can be no assurance that the results contemplated in forward-looking
statements will be realized.
Accumulated Losses; History of Operating Losses; Explanatory Paragraph Within
Accountants' Opinion. The Company commenced in July of 1994. In order to
execute its business strategy and develop new products, the Company will
require significant funds. Increased spending and decreased sales levels
resulted in a net loss of $144,263 for the fiscal year ended June 30, 1997,
and may result in future losses as the Company will incur significant expenses
in connection with research and development of its products, development of
its direct and indirect selling and marketing strategies, and the hiring of
additional personnel. There can be no assurance that the Company will be
profitable in the future or that the net proceeds of this offering, together
with any funds provided by operations and presently available capital, will be
sufficient to fund the Company's ongoing operations. At June 30, 1997, the
Company's current liabilities exceeded its current assets by $57,332, its cash
balance was $210,657. The Company is dependent on generating additional sales
to improve cash flow, and it is possible that the Company will require
additional debt or equity bridge financing prior to completion of this
offering. The Company believes its current operating funds, along with the
proceeds of the offering after amounts used to repay debt, will be sufficient
to finance its cash requirements for at least the next 12 months. See "Use of
Proceeds." If the Company has insufficient funds, there can be no assurance
that additional financing can be obtained on acceptable terms, if at all. The
absence of such financing would have a material adverse effect on the
Company's business, including a possible reduction or cessation of operations.
The report of the Company's independent accountants on the Company's financial
statements as of June 30, 1997 contains an explanatory statement concerning
the Company's ability to continue as a going concern. See "Financial
Statements-Report of Independent Auditors."
No Trading Market. There is no trading market for the Company's Common Stock
and there is no assurance that such a market will develop after this offering,
or if such a market develops, that it will be maintained. Holders of the
Shares may, therefore, have difficulty in selling their stock should they
desire to do so and should be able to withstand the risk of holding their
Shares indefinitely.
Proceeds of Offering. A substantial portion of the proceeds of the
offering will be used for general working capital. If the maximum number of
Shares is sold, working capital will comprise 8.2% of total net proceeds.
Management will have broad discretion as to the use of such proceeds and
management reserves the right to reallocate all proceeds to working capital.
See "Use of Proceeds."
Additional Capital. The Company believes that the minimum proceeds of this
offering will allow the Company to meet all of its presently planned future
operations for at least twelve months. However, a significant portion of the
proceeds will be used to develop and improve product lines. Thus, while the
Company has no plans that would require it to seek additional funding, it may
be required to do so to complete or accelerate these development programs.
There can be no assurance that such funding will be available on terms
acceptable to the Company, and the failure to procure such funding on
acceptable terms could materially and adversely affect the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation -- Liquidity and Capital Resources."
Financial Condition; Decreasing Sales; The Company's sales to date have been
lower in each succeeding year. There can be no assurance that this trend will
be reversed. Even applying the proceeds of this offering, the Company might
not be able to significantly improve revenues and profitability. Failure to
reverse this trend would materially and adversely affect the Company's ability
to exist.
Limitations Imposed by Environmental Regulation. Federal, state and local
environmental laws govern air emissions and discharges into water and the
generation, transportation, storage, and treatment and disposal of solid and
hazardous waste. These laws establish standards governing most aspects of the
construction and operation of the Company's facilities, and often require
multiple governmental permits before these facilities can be constructed,
modified, or operated. There can be no assurance that all required permits
will be issued for the Company's projects under development or for future
projects, or that the requirements for continued environmental regulatory laws
and policies governing their enforcement may change, requiring new technology
or stricter standards for the control of discharges of air or water
pollutants, or for solid or hazardous waste or ash handling and disposal.
Such future developments could affect the manner in which the Company operates
its plants and could require significant additional expenditures to achieve
compliance with such requirements. It is possible that compliance may not be
technically or economically feasible.
Untested Marketing Strategy. To date, the Company has experienced development
and shipment delays due to a lack of working capital and resultant inadequate
staffing and there is no assurance that such delays will not continue. To
date, the Company's product marketing efforts have been very limited and the
Company has not been able to capitalize on the interest generated by said
marketing efforts. There is no assurance that if the Company applies the
proceeds of this offering to marketing and distribution that these problems
will disappear.
Dependence On Others; Limited Manufacturing Capability. The Company's
strategy for the research, development, marketing, distribution, and
commercialization of its products entails entering into various arrangements
with third party toll manufacturers, and it is dependent upon the ability of
these outside parties to perform their responsibilities. The Company may also
enter into marketing agreements and arrangements with various third parties,
rely on collaborative partners to conduct research efforts and trials, and to
manufacture and distribute certain of the Company's products. The Company
does not currently have in place all such relationships. There can be no
assurance that the Company will be successful in establishing all the
necessary collaborative arrangements or that, if established, the arrangements
will be successful or on terms that will enable the Company to achieve
profitability.
Possible Delisting of Securities from Nasdaq System; Risks Relating to
Low-Priced Stocks. It is currently anticipated that the Company's Common
Stock and Warrants will be eligible for listing on the Nasdaq SmallCap market
upon the completion of this offering. In order to continue to be listed on
Nasdaq, however, the Company must maintain $2,000,000 in total assets, a
$1,000,000 market value of the public float and $1,000,000 in total capital
and surplus. In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share. The failure to meet these maintenance
criteria in the future may result in the delisting of the Common Stock from
Nasdaq, and trading, if any, in the Company's securities would thereafter be
conducted in the non-Nasdaq over-the-counter market. As a result of such
delisting, an investor could find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Company's
securities.
In addition, if the Common Stock were to become delisted from trading on
Nasdaq and the trading price of the Common Stock were to fall below $5.00 per
share, trading in the Common Stock would also be subject to the requirements
of certain rules promulgated under the Exchange Act, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock (generally, any non Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain exceptions).
Such rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers
who sell penny stocks to persons other than established customers and
accredited investors (generally institutions). For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to sale. The additional burdens imposed upon broker-dealers
by such requirements may discourage broker-dealers from effecting transactions
in the Common Stock, which could severely limit the market price and liquidity
of the Common Stock and the ability of purchasers in this offering to sell the
Common Stock in the secondary market.
Business Dependent Upon Key Employee. The business of the Company is
specialized. The continued employment of Gerald Sugerman is critical to the
Company's proposed product development and the conduct of the Company's
business. Upon closing, the Company intends to procure key man insurance
insuring Mr. Sugerman. There can be no assurance that the Company will be
able to retain Mr. Sugerman or other equally qualified individuals to run the
affairs of the Company.
Need To attract And Retain Qualified Personnel. The Company currently has
only four full time employees. The Company's ability to develop, produce, and
market its products, and to achieve a competitive industry position will
depend, in large part, on its ability to attract and retain qualified
personnel, including a Chief Financial Officer. Prior to large scale
commercial production of its products, the Company will have to hire
significant numbers of technical and production personnel. Competition for
qualified personnel may be intense and the Company may be required to compete
for such personnel with companies having substantially greater financial and
other resources. The Company's failure to attract and retain such personnel
could have a materially adverse effect upon its business.
Competition. The Company is aware of several business entities in the
United States marketing products similar to those offered by the Company and
the Company's customers. Some of these companies have substantially greater
capital resources, larger staffs and more sophisticated facilities than the
Company. Such companies may produce products which are more effective than
any developed by the Company or its customers and may be more successful than
the Company or its customers in their production and marketing of such
products. There can be no assurance that other companies will not enter the
markets developed by the Company or its customers. There can be no assurance
that the Company will be able to compete successfully in the future with
existing or new competitors. See "Business of the Company--Competition."
No Cumulative Voting - Control by Management. The Company's Certificate
of Incorporation does not provide for cumulative voting. The Company's
present shareholders will own approximately 60.9% (not including the exercise
of options held by management, which, if exercised, would increase such
ownership to 73.4%) of the Company's outstanding Common Stock following the
offering, and thus will be able to continue to elect all of the Company's
directors and control the Company. More specifically, Management, will own
approximately 44% (not including the exercise of options held by management,
which, if exercised, would increase such ownership to 62.3%) of the Company's
outstanding Common Stock following the offering. Thus, Management will be
able to continue to control the election of all of the Company's directors
and control the Company. See "Principal Shareholders" and "Description of
Capital Stock."
Lack of Dividends. The Company has not paid dividends since its
inception and does not intend to pay any dividends in the foreseeable future,
but intends to retain all earnings, if any, for use in its business
operations. Prospective investors who seek dividend income from their
investment should not purchase the Shares offered by this Prospectus. See
"Description of Capital Stock--Dividends."
Immediate Substantial Dilution. The present shareholders have acquired a
controlling interest in the Company at a cost substantially below the offering
price of the Shares. Upon the completion of the offering, investment in the
Company's Common Stock will result in an immediate substantial dilution of
approximately $4.03 per share if all Units are sold at $6.00 per Unit, while
the present shareholders will realize an immediate increase in the net
tangible book value of approximately $1.97 per share if the all Units are
sold. The foregoing assumes that no Redeemable Warrants are exercised and does
not take the over-allotment into account. See "Dilution."
Management Experience. Gerald Sugerman is the originator of the
Company's business concept and has run the Company since inception. No
officer of the Company has had, prior to the organization of the Company,
experience in the managerial aspects of the inks, paints, and plastics polymer
additives industry. Since the business is relatively new, the experience of
management can give no assurance that the business will continue to succeed.
See "Management."
Arbitrary offering Price. The Offering Price at which the Shares are
being offered has been arbitrarily determined by the Company and the
Underwriter. There is no relationship between the said prices and the
Company's assets, book value, net worth or any other economic or recognized
criteria of value.
Sales Pursuant to Rule 144. Officers, Directors and/or affiliates of the
Company hold 1,555,000 Common Shares of the Company, all of which are, subject
to quantity limitations discussed below, available for sale. Such shares are
"restricted securities" under Rule 144, as promulgated by the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, which
shares may not be freely resold. Rule 144 provides, in essence, that a
shareholder who is an affiliate of the Company, after holding restricted
securities for a period of two years, may, every three months, sell them in an
unsolicited brokerage transaction in an amount equal to 1% of the Company's
outstanding Common Shares, or the average weekly trading volume, if any,
during the four weeks preceding the sale. Non-affiliated shareholders holding
restricted securities are not subject to the 1% limitation and may sell
unlimited amounts of shares they own, under certain circumstances, after a one
year holding period. If a substantial part of the shares which can be sold
were so sold, the price of the Company's Common Shares might be adversely
affected. (See "Principal Shareholders" and "Underwriting.")
Underwriter's Warrants The Company has agreed to sell to the
Representative Underwriter Warrants (the "Underwriter's Warrants") to purchase
an aggregate of 10% of the Units sold by the Company hereby. The
Underwriter's Warrants may be exercised for a period of four years commencing
one year after the date of this Prospectus, at a price equal to 120% of the
public offering price. For the life of the Underwriter's Warrants, the holders
are given, at a nominal cost, the opportunity to profit from a rise in the
market price for the Common Stock of the Company without assuming the risk of
ownership, with a resulting dilution in the interest of the other securities
holders. As long as the Underwriter's Warrants remain unexercised, the terms
under which the Company could obtain additional capital may be adversely
affected. Moreover, the holders of the Underwriter's Warrants might be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain additional capital by a new offering of its securities on
terms more favorable than those provided by the Underwriter's Warrants. See
"Descriptions of Securities - Underwriter's Warrants" and "Underwriting."
Product Protection and Infringement. The Company relies on a combination of
patent and trade secret laws, nondisclosure and other contractual agreements
and technical measures to protect its proprietary rights in its products. The
company has applied for several patents, both domestic and foreign, and will
be applying for several more patents. Such protection may not preclude
competitors from developing products with features similar to the Company's
products. The Company believes that its products, trademark and other
proprietary rights do not infringe on the proprietary rights of third parties.
There can be no assurance, however, that third parties will not assert
infringement claims against the Company in the future. The successful
assertion of such claims would have a material adverse effect on the Company's
business, operating results and financial condition. See "Business of the
Company - Proprietary Rights."
Possible Difficulties In Obtaining Supplies. The success of the Company's
additive products will depend on the ability of the Company to obtain
significant amounts of raw materials at affordable prices. The Company may
encounter shortages or delays in obtaining adequate amounts of raw materials,
and the Company has not yet entered into an arrangement pursuant to which it
will ensure adequate access to those materials. The failure of the Company to
obtain adequate materials at affordable prices could have a material adverse
affect on the Company's ability to produce and deliver its products.
Credit Risk. Although the Company has not experienced any material
losses related to client inability to pay for its services, as the Company's
customer base expands it may be subject to increased credit risk. Because the
Company's revenues are derived from a small number of significant customers,
the Company's receivables are similarly concentrated. The inability of one of
these significant customers to satisfy its obligations to the Company could
have an adverse material affect on the Company. Also, in the event that the
Company's additives performance does not meet customer expectations, customers
could hold back on payments for portions of overall contract prices until
additional services have been performed and additives added. Such hold backs
could cause the Company to: (I) incur losses on its product or earn less
profit than anticipated; or (ii)fail to receive payments for certain portions
of its product. See "Risk Factors-Revenue Concentration From Small Group of
Customers."
Authorization and Issuance of Preferred Stock. The Company's Articles of
Incorporation, as amended authorize the issuance of up to 1,000,000 shares of
Preferred Stock with such rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, under the Articles of
Incorporation the Board of Directors may, without stockholder approval, issue
Preferred Stock with dividend, liquidation, conversion, voting, redemption or
other rights which could adversely affect the voting power or other rights of
the holders of the Common Stock. The issuance of any shares of Preferred
Stock, having rights superior to those of the Common Stock, may result in a
decrease of the value or market price of the Common Stock and could be used by
the Board of Directors as a device to prevent a change in control of the
Company. Holders of the Preferred Stock may have the right to receive
dividends, certain preferences in liquidation and conversion rights. The
Company has issued any Preferred Stock in payment of debt and services
rendered, and until this Offering is completed, the Company intends to
continue to do so. See "Description of Securities-Preferred Stock."
Current Prospectus and State Registration Required to Exercise Warrant.
Purchasers of the Warrants included as a component of the Units in this
offering will not be able to exercise them unless at the time of exercise, a
current prospectus under the Securities Act, covering the shares of Common
Stock issuable upon exercise of the Warrants, is effective and such shares
have been registered for sale or are exempt from registration under the
applicable securities or "blue sky" laws of the states in which the various
holders of the Warrants reside. Although the Company has undertaken to use
reasonable efforts to maintain the effectiveness of a current prospectus
covering the Common Stock underlying the Warrants, there can be no assurance
that the Company will be able to do so. Although the Company will use its best
efforts to register or qualify the shares for sale in jurisdictions where the
registered holders of the Warrants reside, no assurance can be given that the
Company will be able to do so. Further, the Company may determine not to
register or qualify the shares underlying the Warrants in jurisdictions where
time and expense do not justify such action. The value of the Warrants may be
greatly reduced if a current prospectus covering the shares underlying the
Warrants is not effective or if such Common Stock is not registered or exempt
from registration in the states in which the holders of the Warrants then
reside. See "Description of Securities."
Limitations on Liability of Directors. The Company's Articles of
Incorporation substantially limit the liability of the Company's Directors to
its shareholders for breach of fiduciary or other duties to the Company, to
the full extent permitted by New Jersey law. See "Description of
Securities-Indemnification and Waiver of Director Liabilities."
USE OF PROCEEDS
The net proceeds to be realized by the Company from the sale of the Units
offered hereby, after deducting all commissions and expenses of the offering,
is estimated at $5,053,000. Included in the expenses of this offering are the
commissions and projected legal fees, accounting fees, filing fees and
printing costs. No officer, director or affiliate of the Company, or
associated person of them, will receive any portion of the gross proceeds of
this offering, except for legal fees owed to the law firm of its President in
an amount not to exceed $100,000.00, and the forward going payments due to
Gerald Sugerman, Vice President and Secretary of the Company for future
payments due under his employment contract. (See "Remuneration of Officers and
Directors") These funds will be used by the Company in substantially the
following manner:
<TABLE>
<S> <C>
ADMINISTRATIVE
Equipment $ 6,000
Supplies 2,000
Salaries 240,000
Overhead 60,000
308,000
PRODUCTION & CUSTOMER SERVICE
Salaries 240,000
Equipment 1,800,000
Inventory 450,000
2,490,000
PRODUCT DEVELOPMENT
Equipment 300,000
Supplies 175,000
Salaries 110,000
585,000
MARKETING
Advertising 500,000
Salaries 650,000
Travel and Entertainment 50,000
1,200,000
WORKING CAPITAL 470,000
TOTAL ------------------------ $5,053,000
</TABLE>
Since the proceeds of this Offering, will be applied over time, the
actual expenditure of such proceeds for any purpose could vary significantly
from the anticipated expenditures described above. The Company reserves the
right, therefore, to reallocate proceeds among the uses described above,
depending upon factors such as the results of the Company's marketing efforts,
the Company's success in developing new products, and technological advances
in the industry.
The net proceeds of this offering may not be used immediately. Any net
proceeds of this offering that are not expended immediately will be deposited
only in short-term interest bearing obligations of the United States
government. See "MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS".
DIVIDEND POLICY
The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other relevant factors. The Company has not
paid any dividends to date and does not anticipate that it will be in a
position to pay any dividends in the foreseeable future.
DILUTION
As of June 30, 1997, there were 1,555,000 of the Company's Common Shares
issued and outstanding. See "Description of Securities." If all Units
(1,000,000) offered hereby are sold there will be 2,555,000 Shares
outstanding.
As of June 30, 1997, the approximate net tangible book value of the Company's
common stock (total tangible assets less total liabilities) was $(23,775) or
$(.02) per share. See "CAPITALIZATION." Giving effect to the sale of
1,000,000 Units and receipt of the net proceeds therefrom, the pro forma net
tangible book value of the Company would be approximately $5,029,225, or $1.97
per share. This represents an immediate dilution of $4.03 for each share of
Common Stock purchased by new investors and an immediate increase of $1.99 per
share to existing shareholders.
<TABLE>
<S> <C>
Sale price per unit $6.00
Net tangible book value per unit
before offering............ $(0.00)
Increase to present shareholders
in net tangible book value
attributable to sale of
shares offered........... $1.99
Pro Forma net tangible book value
per share after offering... $1.97
Dilution of net tangible book
value per share to new
investors.................. $4.03
</TABLE>
The officers and directors of the Company have acquired their common
shares for no cash and for property and services valued at $1,450. If the
maximum number of Shares is sold, the new investors shall acquire 1,000,000
shares (about 39.13% of the total outstanding common shares) at a price of
$6.00 per share or a total of $6,000,000. The following table summarizes the
number of shares acquired from the Company and the aggregate consideration
paid by the existing shareholders and to be paid by new shareholders in this
Offering:
<TABLE>
<S> <C> <C> <C>
Number of Percentage Aggregate
Shares Acquired of Shares Consideration
from Company Held by Group Paid for Shares
Existing
shareholders........1,555,000 60.87% $76,750
New shareholders....1,000,000 39.13% $6,000,000
Total...............2,555,000 100.0% $6,076,750
</TABLE>
SELECTED FINANCIAL INFORMATION
The following table sets forth certain selected financial data for the years
ended June 30, 1995, 1996, and 1997. This information is derived from the
Company's financial statements which appear elsewhere in this Prospectus. The
selected financial data is qualified by reference to, and should be read in
conjunction with, the Company's financial statements and notes thereto
included elsewhere in this Prospectus and "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".
<TABLE>
Balance Sheet
as of:
<S> <C> <C> <C>
Year Ending Year Ending Year Ending
June 30,1995 June 30, 1996 June 30, 1997
Sales 226,202 155,525 131,335
Cost Of Goods 156,348 104,552 61,453
Gross Profit 69,854 50,973 69,882
Operating Expenses 181,651 165,388 211,080
Other Income -0- -0- -0-
Other Expenses -0- -0- 3,065
Net Profit(Loss) (111,797) (114,715) (144,263)
Per share (0.07) (0.08) (0.09)
Shares Outstanding 1,555,000 1,555,000 1,555,000
Dividends -0- -0- -0-
</TABLE>
<TABLE>
Balance Sheet
as of:
<S> <C> <C>
June 30, 1997 As Adjusted(1)
Cash And Cash Equivalents 210,657 5,263,657
Working Capital (defecit) (57,332) 4,995,668
Total Assets 290,976 5,343,976
Current Liabilities 313,401 313,401
Long Term Debt -0- -0-
Stockholders' (defecit) (22,425) 5,030,575
Equity
</TABLE>
(1) Gives effect to the issuance and sale of the maximum 1,000,000 Units
offered hereby and the receipt of the estimated net proceeds ($5,053,000)
before their application, including the application to the expenses of this
offering. This does not take into account any potential proceeds from the
150,000 shares exercisable from the over-allotment option, nor any proceeds
from exercise of the Redeemable Warrants or the Underwriters Warrants. See
"Use of Proceeds".
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 1997 and as adjusted to give effect to the issuance and sale of the shares
upon the closing of this offering:
<TABLE>
<S> <C> <C>
Actual As Adjusted
Current Liabilities 313,401 313,401
Long Term Liabilities 0 0
Stockholders' Equity:
Preferred Stock 296,600 296,600
Common Stock, no par
value authorized
10,000,000 shares;
issued and outstanding
1,555,000 shares; as
adjusted 2,555,000 51,750 5,053,750
Deficit Accumulated During
Development Stage (370,775) (370,775)
Total Liabilities and
Stockholders' Equity (22,425) 5,030,575
Total Capitalization 290,976 5,343,976
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE PERIOD
FROM INCEPTION (JULY 22, 1994) TO JUNE 30, 1997.
Development stage activities.
The Company has been a development stage enterprise from its inception July
22, 1994, to June 30, 1997. During this period, management devoted the
majority of its efforts to obtaining new customers for its products,
developing sources of supply, developing and testing formulas, pursuing and
finding a management team to begin the process of: completing its marketing
goals; furthering its research and development for its products; marketing
limited quantities of the Company's products; completing the documentation for
and selling initial shares through the Company's private placement; and
completing the documentation for the Company's initial public offering. These
activities were funded by the Company's management and investments from
stockholders and borrowings from related third parties. The Company has not
yet generated sufficient revenues during its limited operating history to fund
its ongoing operating expenses, repay outstanding indebtedness, or fund its
product development activities. For the period of inception July 22, 1994, to
June 30, 1997, the Company completed the development of its first product
line.
Results of operations.
Results of Operations for the period of inception (July 22, 1994) to June 30,
1997
Revenues were $513,062. Cost of goods sold was $322,353. Gross profit was
$190,709.
General and Administrative costs were $558,119 consisting of $550,749 of
general and administrative expenses, and $7,370 incurred for depreciation and
amortization. The net loss for the period was $370,775.
Liquidity and capital resources.
The Company increased liquidity by $210,657 from a cash balance of $1,000 at
the Company's inception through the sale of $249,315 in convertible notes
payable, and the sale of 25,000 shares of common stock aggregating $50,000.
The Company expended $5,000 for security deposits, and purchased $35,897 in
equipment, $42,679 in inventory, and has invested 2,733 in accounts
receivable.
The Company is initiating an initial public offering of 1,000,000 Units at
$6.00 per Unit for an aggregate of $6,000,000. Management believes that the
present cash balance will pay the initial cost of beginning the set-up of the
business and the initial cost of the Offering. The Company will defer the
expenses of the Offering until the Offering is completed and the offering
expenses will be deducted from proceeds received therefrom. The Offering
proceeds will be sufficient to satisfy Management's objectives of purchasing
equipment for office and production of $1,806,000, purchasing supplies of
$177,000, financing the payment of salaries of $1,240,000, pay advertising of
$500,000, purchase inventory of $450,000, pay overhead of $60,000, pay travel
and entertainment expenses of $50,000, provide working capital of $2,750,500
pay Underwriter's Discounts of $600,000 and pay projected offering expenses of
$347,000.
BUSINESS OF THE COMPANY
SUMMARY
PPA Technologies, Inc., hereinafter referred to as "PPA" or "the Company", was
incorporated in the State of New Jersey in July, 1994 to develop and
manufacture innovative specialty chemical products with broad application in
the plastics and coatings industries. The Company now markets coupling agents
and has recently launched the marketing of paints and coatings utilizing the
Company's proprietary reactive coalescent technology.
THE INDUSTRY
Industry
The Company operates in two industries, plastics and coatings. Each of these
are vast in total worldwide production and sales.
The plastic industry is composed of several subsets, however to present a
concept of general size, worldwide sales of polyvinyl chloride ("PVC")
exceeded 18 billion dollars in 1995. Sales by the twenty five largest film
and sheet plastics manufactures were 12.4 billion dollars in 1996. Domestic
sales of PVC pipe totaled about 8.7 billion dollars in 1996.
The global paints and coatings market totaled $65 billion in 1995. In North
America alone 4.7 million metric tons were produced in 1995 having a value of
about 15 billion dollars. The top ten producers accounted for about 60% of
the market.
Coupling Agents
Coupling agents are organometallic compounds which may be delivered in liquid,
powder or pelletized forms depending primarily upon customer need. These
products are used primarily by plastics compounders and manufacturers of
plastic products to obtain improved line speed, faster throughput, lower
operating temperatures and pressures, better dry blend and hot melt flow,
reduced energy requirements, better control over wall/sheet thickness, higher
impact resistance and greater flame retardance.
Since only small quantities (.2 to 2% of the total product mix by weight) of
these compounds are used, worldwide market volumes of coupling agents are
quite low and total only several million pounds. However, because of the great
benefits to be derived from their use, profit margins on coupling agents are
quite high. Also, the totality of products in which coupling agents could be
used is vast, including at least 10% of the total plastics output worldwide.
At present there are only two sources of these compounds, one of which is PPA.
Reactive Coalescents
Reactive Coalescents allow resin producers and coatings end-users to utilize
Zero VOC solutions in place of current solvent-based packages. In
architectural and industrial coatings, volatile organic solvents have been
historically required and applied to a) dissolve the resin, and b) to provide
coalescing action. These traditional solvents, which comprise the competing
products for the Company's reactive coalescents, have markets exceeding $5
billion per year. Historically they have been used because of their low price
and a lack of concern regarding the environmental impact of their use, i.e.
the evaporation of the solvent into the air. With increasing restrictions
being placed upon the use of VOC's because of these environmental concerns the
use of solvents is under wide spread attack and many companies have been
attempting to develop replacements for these solvents in a wide variety of
applications. To date such replacements have been generally unsatisfactory and
limited in application.
The architectural coatings market alone was over 450 million gallons in 1995
out of a total paint and coatings volume of one billion gallons. Reactive
coalescents typically comprise 15% of the complete formulation, for an
architectural requirement of 67.5 million gallons of reactive coalescents or
$918 million. As the Clean Air Act, 42 U.S.C. ((7401-7671, is further
enforced along with new environmental legislation, the need to replace solvent
with chemical coalescents will increase.
According to the Chemical Marketing Reporter, October 19, 1995 edition "The
$300 million additives segment is expected to continue to outpace the coatings
business as a whole, and the bulk of this growth comes from the push to reduce
solvent use." The percent solvent in these formulations should continue to
shrink in favor of water and additives, including reactive coalescents.
Flame Retardants
Flame retardants comprise 40% to 50% of all additives for plastics worldwide.
Historically, halogenated materials have been the preferred flame retardants.
In the past ten years, this group of chemicals has become the subject of
legislated restrictions and in general has lost market share to less effective
additives because of well known disadvantages: they often cause localized
corrosion of metals in direct contact (e.g. wire and cable), cannot incinerate
scrap or used product due to hazardous fumes generated, and their thermal
decomposition and/or combustion results in toxic fumes. Effective early in
1991, Western Electric banned all use of halogenated chemicals from its wire
and cable coatings.
Non-halogenated chemicals are available, with significant drawbacks, including
reject rates of 8 to 30% due to poor wetting and/or dispersion of flame
retardant. These flame retardants as a rule do not melt and therefore will
inhibit hot melt flow, making it necessary to employ higher cost resin for
acceptable processing.
Flame retardants comprise a significant percentage of all additives for
plastics worldwide. Almost 90% of the $3 billion per year domestic plastic
additives sector is comprised of just four products - plasticizers, flame
retardants, impact modifiers and lubricants. Of the approximately 35 billion
pound annual polyolefin market, about 10% or 3.5 billion pounds contain flame
retardant. At an average loading of 50 phr flame retardant, the 3.5 billion
pounds polyolefins sector translates to about one billion pounds of flame
retardant sold annually.
Historically, halogenated materials have been the preferred flame retardants,
comprising about 80% of the market. Halogen-based chemicals are added at 45
to 50 phr and are currently sold at $1.40 to $2.40 per pound. In the past ten
years, this group of chemicals has become the subject of legislated
restrictions and in general has lost market share to less effective additives
because of well known disadvantages, e.g. they often cause localized corrosion
of metals in direct contact ( e.g. wire and cable ), scrap containing such
halogenated retardants cannot be safely incinerated due to hazardous fumes
generated, and thermal decomposition or combustion results in generation of
toxic fumes. As an example, in 1991 Western Electric banned all use of
halogenated chemicals from their wire and cable coatings.
Aluminum and magnesium hydroxides do not have the disadvantages of the halogen
compounds discussed above, but these hydroxides offer limited application.
With an upper temperature limit of 320oF, and the need for as much as 75 to 85
phr in the formulation to achieve a Vo UL rating (a flame spread rate
measurement), only a small number of uses are possible. Other
non-halogenated chemicals are available, with similarly significant
drawbacks, including reject rates of 8 to 30% due to plate-out and otherwise
poor wetting and dispersion of the flame retardant. Finally, such flame
retardants as a rule do not melt and therefore will inhibit hot melt flow,
making it necessary to employ a higher cost resin for acceptable processing.
THE COMPANY'S PRODUCTS
Coupling Agents
PPA offers approximately 15 different organometallic coupling agents available
in liquid, powder or pelletized forms. Like their competitor products, they
can be and are used primarily by plastics compounders and manufacturers of
plastic products to obtain improvements such as: higher line speed, faster
throughput, lower operating temperatures and pressures, better dry blend flow
and hot melt flow, reduced energy requirements, better control over wall/sheet
thickness, higher impact resistance and greater flame retardance.
Since all coupling agents are presently proprietary products, the opportunity
for the production of value added products utilizing these compounds is more
than feasible. The overwhelming advantage of the coupling agents in almost all
applications is the ability to produce a more cost effective product with the
coupling agent thereby creating a true "value added" situation enabling either
direct sales of the agent or production of a more finished product at
competitive price advantages in large markets of essentially fungible
commodities. Most purchasers in fact prefer receipt of compounded resins
(resins in to which additives, such as the coupling agents, have been added)
rather than the pure coupling agents (which would then be added to the resin
by the end user). While margins on the value added products are lower than the
coupling agents, the total gross profit from operating a compounding facility
is many times greater than from sale of the coupling agents alone.
Our coupling agents have already been successful in extrusion, injection and
blow molding operations, so Management assumes that coupling agents can be
beneficially utilized in a large part of the total plastics market.
Reactive Coalescents
Approximately 23 reactive coalescent packages have been developed to-date.
These products allow resin producers and coatings end-users to utilize Zero
VOC solutions in place of current solvent-based packages. In architectural
and industrial coatings, volatile organic solvents have been historically
required and applied to a) dissolve the resin, and b) to provide coalescing
action. PPA coalescing packages are 100% solids (after application), Zero VOC
(as measured by present test methodologies), water-reducible systems that
provide all of the necessary dissolution and coalescing of solvent-based
systems, but which are a) without solvents for immediate Clean Air Act
compliance, b) more cost effective since there is no wasted solvent to
evaporate out of the coating, and of considerable importance, and c) generate
harder, more durable films due to chemically reactive cross-linking versus no
cross-linking in organic solvent systems.
Governmental Regulation
As a chemical manufacturer the Company is subject to a wide variety of local,
state and federal regulations. While the Company believes that it is in
compliance with all applicable regulations, there can be no assurance that
from time to time unintentional violations of such regulations will not occur.
In the event of such violations, the company may be subject to fines,
injunctive action and other forms or governmental action which would have a
material and adverse impact on the Company (see Risk Factors-Governmental
Regulation.) The following is a brief survey of some of the applicable
federal regulations. Many states, including the State of New Jersey where the
Company has its principle place of business, also regulate certain aspects of
the chemical industry. In general, compliance with federal regulation would
comprise the more difficult burden. One example discussed herein below,
California, has more stringent regulation.
The Resource Conservation and Recovery Act 42 U.S.C. Sec. 6901-6987 ("RCRA")
was enacted in 1976. The Comprehensive Environmental Response, Compensation
and Liability Act, 42 USC Sec. 9601-9657 ("CERCLA") was enacted in 1980.
These statutes regulate the disposed of hazardous waste and the clean-up of
chemicals that have been, or will be, subject to illegal disposal. The Toxic
Substance Control Act (hereinafter TOSCA) also governs aspects of chemical
disposal. The Clean Air Act and the Clean Water Act also control emissions
into the atmosphere and water systems (hereinafter these statutes are referred
to as PCS.)
The company believes that it is a) not in violation of the PCS and b) not
subject to the PCS because of the nature of the materials being utilized by
the Company at this time. However, existing environmental laws may be amended
and new laws may be enacted by Congress and state legislatures and new
environmental regulations may be issued by regulatory agencies. For these
reasons, the Company cannot predict the specific environmental control
requirements that it will face in the future.
Compliance with Federal, State and local provisions which have been enacted or
adopted regulating the discharge of materials into the environment, or
otherwise relating to the protection of the environment, may have a material
effect on the capital expenditures, earnings and competitive position of the
registrant and its subsidiaries.
Flame Retardants
PPA flame retardants are non-halogenated for health and safety concerns, and
they utilize coupling agents for maximum dispersion efficiency. The end
result allows the end user to: a) use lower cost resin than with alterative
flame retardants, b) run at 10 to 20% higher speed, and at lower temperatures,
and c) only PPA offers a concentrated compound that the customer can add at a
1:1 rate to achieve high resistance such as Vo.
PPA flame retardants are targeted for polyolefins only at this time. This
means high density polyethylene, low density polyethylene, and polypropylene.
With respect to cost, PPA materials cost will be $0.95 to $1.10 per pound of
compound for large volume purchases. This represents a distinct price
advantage over the competition which typically sells for $2.80 per pound and
requires as much as 45 weight percent in polyolefins to acheive 94 Vo. The
anticipated sales volume is 1% of the market for olefins (hydrocarbons
containing at least one double bond) is 10 MM lbs/yr. At the end of the first
year of operation, it will be easy to be at an annualized activity level of
between 10 to 20 MM lbs/yr. Business could grow to over 80 MM lbs/yr over the
next three years, although much more conservative numbers have been used in
the Company's financial projections in this, as in all, potential areas of
business.
PPA flame retardants offer U.L.94 Vo efficacy in 1/16" polypropylene at just
30 to 35 phr. PPA coupling agents are employed for their tremendous surface
activity which creates the following advantages:
1. The ability to use lower cost resin than with alternative flame
retardants;
2. The melt index is basically unaffected;
3. Manufacturing processes can run at 10 to 20% higher speeds, and at lower
temperatures; and,
4. PPA can offer a concentrated compound that the customer can add at a 1:1
rate to achieve high resistance such as Vo.
MARKETING
Having completed Research & Development work for fifteen coupling agents,
limited marketing and sales have commenced. Various powder and pellet forms
of these are also available. The current list of active customers includes
five plastics manufacturers. As a result of the sales effort PPA coupling
agents have been accepted in several different applications such as PVC pip
production and sporting goods production. Numerous trials on new uses for the
coupling agents are ongoing.
The reactive coalescent packages have proven successful in wood coatings and
architectural (used on buildings) applications. Regional, national and
international companies have shown interest in these products and testing by
these companies are also ongoing.
Marketing in these areas have to date been limited to direct mail to potential
customers and referrals through the personal business contacts of the
officers. The Company has recently employed two full time salesmen to expand
this effort with primary focus on printing inks. The Company intends to expand
these marketing efforts upon the successful conclusion of this Offering, See
"Use of Proceeds" by attendance at trade shows, advertising in trade journals
and by hiring additional sales personnel. The Company also plans to expand
marketing to Europe, especially with products that have significant
environmental impacts, such as paints and inks.
Additional Financing
The Company believes that the minimum proceeds of this Offering will
allow the Company to meet all of its presently planned future operations for
at least twelve months. However, the Company's anticipated development
projects may require a substantial amount of funds in order to fully develop
these proposed future products to their fullest potential. (See "USE OF
PROCEEDS" and "FINANCIAL STATEMENTS.") The proceeds of this Offering may be
inadequate to permit the Company to achieve its research objectives, and there
can be no assurance that the Company will be able to raise additional funds
when needed on terms acceptable to the Company, if at all. (See "RISK FACTORS
- - Additional Capital.")
SALES AND MARKETING
EMPLOYEES
The Company employs a President and an Executive Vice President for Scientific
Affairs. In addition, the Company employs one chemical technician, two
marketing representatives, one secretary and one part-time administrative
assistant. During the next twelve months the company anticipates opening
several production facilities requiring the acquisition of about one hundred
production personnel, plant management and technical sales representatives.
There can be no assurance that the Company will be able to hire such personnel
or if hired retain their service.
PROPRIETARY RIGHTS
The Company relies on a combination of patent and trade secret laws,
nondisclosure and other contractual agreements and technical measures to
protect its proprietary rights in its products. Despite these precautions,
unauthorized parties may attempt to copy aspects of the Company's products or
to obtain and use information that the Company regards as proprietary.
The Company believes that its products, trademark and other proprietary rights
do not infringe on the proprietary rights of third parties. There can be no
assurance, however, that third parties will not assert infringement claims
against the Company in the future. (See "RISK FACTORS - Proprietary Rights.")
FACILITIES
In the event that pending applications are not granted, or if subsequently
obtained patents are either invalidated or designed around, the Company would
be materially and adversely affected.
MANAGEMENT
The names of the Officers and Directors of the Company, their ages and
positions with the Company are as follows:
<TABLE>
<S> <C> <C>
Name Age Position
Roger Fidler 46 President, Director
Gerald Sugerman 60 Executive Vice President,Secretary,
Treasurer Director
James Wright 64 Director
Albert Mersberg 56 Director
</TABLE>
The above officers and directors will hold office until the next annual
meeting, or until their successors are elected and qualified.
MANAGEMENT
Roger L. Fidler Mr. Fidler has been President of the Company since inception.
He has been engaged in the private practice of law since 1983 and has held
several directorships in both private and public corporations. Mr. Fidler
holds degrees in Law (J.D.) from the University of South Carolina, Columbus,
South Carolina (1977), in Physics (M.S.) from the University of Illinois
Urbana, Illinois (1974) and a B.S. from Dickinson College (1972), Carlisle,
PA.
Gerald Sugerman, Ph.D. Dr. Sugerman has served as Executive Vice President
and a Secretary Director of the Company since inception. As PPA's Chief
Scientist he is in charge of all technical developments. From 1992 until 1994,
Dr. Sugerman was President of Pi-Tech Inc., a specialty chemical company. Dr.
Sugerman received his Ph.D. in organic chemistry from Fordham University in
1960, and holds several other degrees. He has authored over 100 papers and
holds more than fifty patents.
James Wright Mr. Wright has been a director since inception. Mr. Wright is a
retired businessman who until 1989 was a principal in a sand and gravel mining
company in New Jersey. Mr. Wright holds a Bachelor of Science degree in
Business Administration from Rider University (B.S. 1961), Lawrenceville, New
Jersey. Mr. Wright serves on the Audit Committee.
Albert Mersberg Mr. Mersberg became a director in September, 1997. He had
previously consulted for the Company from inception until November, 1996. He
is currently employed as Technical Manager of New Product Development by
Sampson Coatings, Inc of Richmond, VA where he has been employed since
December, 1996. Mr. Mersberg previously was employed by Lawrence McFadden Co.
In Philadelphia, PA from 1991 to 1996 in a similar capacity. He holds a B.S.
degree in Chemistry from the State University of New York at Bufalo.
RENUMERATION OF OFFICERS AND DIRECTORS
No officer of the Company has received compensation since inception in July,
1994 except Dr. Sugerman, Exec. V.P. of the Company. Directors are not
compensated for serving on the Board of Directors. No contingent forms of
remuneration, property, or other benefits were conferred during that period.
The Company has entered into a written employment and assignment agreements
with Gerald Sugerman and Roger Fidler. Pursuant to these Agreements, Mr.
Sugerman assigned his rights to any and all technologies and improvements
thereto to the products presently marketed by the Company and which he may
develop from time to time while employed by the Company. The capacity and
annual salaries for key management is set forth below.
Summary Compensation Table
<TABLE>
Annual Compensation Long Term
<S> <C> <C> <C> <C>
Name & Position Salary/yr. Bonus Other(1) Compensation
Roger Fidler $120,000 -0- -0- -0-
President
Gerald Sugerman $120,000 -0- -0- -0-
Executive Vice
President;
Director
</TABLE>
(1) Mr. Fidler's contract provides for sale commissions which have not been
earned to the date of this Prospectus. Mr. Sugerman's contract provides for
5% of sales to a maximum of $350,000, and 2% thereafter.
STOCK OPTION INFORMATION
The following table sets forth certain information with respect to the value
of stock options held by the Named Executive Officer for the fiscal year ended
June 30, 1997.
Fiscal Year-End Option Value Table
<TABLE>
<S>
Number Of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Acquired Options On June 30, 1997 June
30,1997($)(1)(2)(3)
On Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Roger Fidler -0- -0- 425,000 -0- 2,100,000 -0-
Gerald Sugerman -0- -0- 850,000 -0- 4,200,000 -0-
___________
</TABLE>
(1) Based upon an assumed initial public offering price of $6.00 per share of
Common Stock.
(2) Options are in-the-money if the fair market value of the Common Stock
exceeds the exercise price.
(3) Represents the total gain which would be realized if all the in-the-money
options beneficially held at December 31, 1995 were exercised, determined by
multiplying the number of shares underlying the options by the difference
between the per share option exercise price and $6.00, the fair market price
as of the initial public offering date, as determined by the offering price.
EMPLOYEE STOCK OPTION PLAN INFORMATION
The Company has adopted a Stock Grant Program and a Stock Option Program. The
Stock Grant Program provides for the issuance to officers, directors and key
employees stock grants as determined by the Board of Directors. The recipient
must continue employment with the Company for two years after the grant is
made or forfeit the stock. The stock option program is also available for
officers, directors and key employees and permits the Board to issue options
which are exercisable in equal amounts over a five year period. Any unvested
options expire upon the termination of employment with the Company. To the
date of this Prospectus, no stock options have been issued pursuant to the
Stock Option Program and no grants were made under the Stock Grant Plan.
CERTAIN TRANSACTIONS
The Company was organized primarily through the efforts of Roger Fidler
and incorporated on July 22, 1994 under the laws of the State of New Jersey.
On July 29, 1994, the Company's Board of Directors approved the issuance of 75
shares each to Mr. Fidler and James Wright as consideration for organizational
expenses and services valued at $100 each.
On August 3, 1994, an agreement was made by which the Company acquired certain
license rights in return for the assumption of an certain liabilities and the
issuance of 360 Shares to Gerald Sugerman.
Effective November 1, 1994, the Company entered into a two year
employment contract with Gerald Sugerman which provides for salary of $120,000
per annum. In June, 1996 the Company entered into a five year employment
agreement with Dr. Sugerman requiring the payment of $10,000 per month plus 5%
royalty on sales he makes up to a maximum salary of $350,000. In addition, he
receives life insurance equal to twice his annual salary, disability
insurance, vacation pay, and sick leave. On February 6, 1996,
the Company entered into an employment agreement with Roger Fidler by which
Mr. Fidler's salary would be set by B/D from time to time. On January 1, 1998
this salary will commence at the rate of $10,000 per month. In addition, Mr.
Fidler receives commission on gross sales of between 10% and 15% on sales
initiated by him.
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to the share
ownership, both before and after the prospective closing of the offering made
hereby, of the Company's common stock by its officers and directors, both
individually and as a group, and by the present record and/or beneficial
owners of more than 5% of the outstanding amount of such stock:
<TABLE>
<S> <C> <C> <C>
Number of Percentage(2) Percentage(2)
Name Shares of shares of shares
Owned Owned Prior After
to Offering Offering
Gerald
Sugerman(1) 1,825,000 75.9% 53.6%
8 Cambridge Dr
Allendale, NJ 07401
Roger Fidler(1) 500,000 25.3% 16.8%
400 Grove Street
Glen Rock, NJ 07452
James Wright 75,000 4.78 2.9
244C Mayflower Way
Jamesburg, NJ 08831
Officers
and Directors
as a Group(3) 1,125,000 82.3% 60.1%
_________________
</TABLE>
(1)Gives effect to 425,000 and 850,000 shares underlying options held by
Fidler and Sugerman, respectively.
(2) Does not give effect to (i)up to 1,000,000 shares of Common Stock issuable
upon the exercise of the Class A Unit Warrants; (ii) the common stock
underlying the Underwriter's Over Allotment Option (150,000 shares); and (iii)
the common shares underlying the Underwriter's Warrant Units (200,000 shares).
See "Underwriting" and "Certain Transactions."
DESCRIPTION OF SECURITIES
Preferred Stock
The authorized capital stock of the Company consists in part of 1,000,000
shares of Preferred Stock, $100 par value per share (the "Preferred Stock").
The Company's present issued and outstanding number of Preferred shares is
3,461. The holders of Preferred Stock have preference as to liquidation,
receive a 5% dividend, and may have their shares redeemed by the Company at
par value plus accrued dividends during a five year period.
Common Stock
The authorized capital stock of the Company consists of, in part,
10,000,000 shares of Common Stock, without par value (the "Common Stock").
The Company's present issued and outstanding number of common shares is
1,555,000. The holders of Common Stock have equal ratable rights to
dividends from funds legally available therefor, when, as and if declared by
the Board of Directors of the Company; are entitled to share ratably in all of
the assets of the Company available for distribution to holders of Common
stock upon liquidation, dissolution or winding up of the affairs of the
Company; do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions applicable thereto. Such shares
are entitled to one vote per share on all matters which stockholders may vote
on at all meetings of shareholders. All shares of Common Stock now
outstanding are fully paid and nonassessable and all shares of Common Stock
which are the subject of this Offering, when issued, will be fully paid and
nonassessable.
Non-Cumulative Voting
The holders of shares of Common Stock of the Company do not have
cumulative voting rights. Thus, the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, and in such event, the holders of the remaining
shares will not be able to elect any of the Company's directors. If the
shares offered hereby are sold, the present shareholders will own
approximately 60.9% of the Company's outstanding shares. If the options held
by management were exercised, the present shareholders would own 73.9% of the
Company's outstanding shares, and in either event, will remain in a position
to elect all of the members of the Board of Directors. Further, Mr.
Sugerman, Executive Vice President of the Company, exercised his options only,
he would own approximately 53.6% of the Company's Common Stock and would
therefore control the Company. (See "Principal Shareholders").
Transfer Agent and Registrar
The Company has chosen Liberty Transfer Company of Huntington, New York as its
transfer agent.
Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements as soon as practicable at the end of
each fiscal year, commencing with the next fiscal year. In addition, the
Company may, from time to time, issue unaudited interim reports and financial
statements.
Dividends
The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other relevant factors. The Company has not
paid any dividends to date and does not anticipate that it will be in a
position to pay any dividends in the foreseeable future.
UNDERWRITING
The Underwriters named below (the "Underwriters"), for whom Kenneth
Jerome & Company, Inc. is acting as Representative, have severally agreed,
subject to the terms and conditions of the Underwriting Agreement (the
"Underwriting Agreement") to purchase from the Company and the Company has
agreed to sell to the Underwriters on a firm commitment basis, the respective
number of units of Common Stock and Redeemable Warrants as set forth opposite
their names:
<TABLE>
Underwriter Number of Units
<S> <C>
Kenneth Jerome & Company, Inc............ 1,000,000
Total.................................... 1,000,000
</TABLE>
The Underwriters are committed to purchase all the Securities offered
hereby, if any of such Securities are purchased. The Underwriting Agreement
provides that the obligations of the several Underwriters are subject to
conditions precedent specified therein.
The Company has been advised by the Representative that the Underwriters
propose initially to offer the Securities to the public at the public offering
prices set forth on the cover page of this Prospectus and to certain dealers
less concessions of not in excess of $0.60 per unit. Such dealers may reallow
a concession not in excess of $0.60 per unit to other dealers. After the
commencement of this Offering, the public offering prices, concessions and
reallowances may be changed by the Representative.
The Representative has advised the Company that it does not anticipate
sales to discretionary accounts by the Underwriters to exceed ten (10%)
percent of the total number of Securities offered hereby.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payment that the Underwriters may be required to make. The Company has also
agreed to pay to the Representative an expense allowance on a non-accountable
basis equal to three percent (3%) of the gross proceeds derived from the sale
of the Securities underwritten.
The Underwriters have been granted an option by the Company, exercisable
within 45 days after the date of this Prospectus, to purchase up to an
additional 150,000 units at the initial public offering price per unit offered
hereby, less underwriting discounts and the expense allowance. Such option may
be exercised only for the purpose of covering over-allotments, if any,
incurred in the sale of the Securities offered hereby. To the extent such
option is exercised in whole or in part, each Underwriter will have a firm
commitment, subject to certain conditions, to purchase the number of the
additional units proportionate to its initial commitment.
The holders of 1,500,000 outstanding shares of Common Stock, including
all of the Company's directors, officers and principal stockholders, directly
or indirectly, offer to sell, contract to sell, sell, transfer, assign,
encumber, grant an option to purchase, pledge or otherwise dispose of any
beneficial interest in such securities for a period of 13 months following the
date of this Prospectus without the prior written consent of the
Representative. An appropriate legend shall be marked on the face of the
certificates representing all of such securities.
The Company has agreed that, for three years after the date of this
Prospectus, it will use its best efforts to cause one individual designated by
the Representative, if any, to be elected to the Company's Board of Directors.
Such individual may be a director, officer, employee or affiliate of the
Representative. In the event the Representative elects not to designate a
person to serve on the Company's Board of Directors, the Representative may
designate a person to attend meetings of the Board of Directors.
Prior to this Offering, there has been no public market for the
Securities. Consequently, the initial public offering prices of the Securities
and the terms of the Redeemable Warrants have been arbitrarily determined by
negotiations between the Company and the Representative and are not
necessarily related to the Company's asset value, net worth or other
established criteria of value. The factors considered in such negotiations, in
addition to prevailing market conditions, include the history of and prospects
for the industry in which the Company competes, an assessment of the Company's
management, the prospects of the Company, its capital structure and certain
other factors as were deemed relevant.
The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a
copy of each such agreement which is filed as an exhibit to the Registration
Statement.
The Company also agreed to indemnify the Representative against certain
liabilities, including liabilities under the Securities Act, or to contribute
to related payments that the Representative may be required to make. In
addition, the Company granted the Representative, for a period of five years
commencing on the final closing of this offering a right of first refusal to
be the managing underwriter or placement agent for any securities to be
offered by the Company.
The Company will also sell to the Representative warrants (the "Underwriter's
Warrants") to purchase up to 100,000 Units at a price $7.20 per Units. The
Underwriter's Warrants will be exercisable for a period of four years
commencing one year after the Effective Date of this Offering, at an initial
per Unit exercise price of 120% of the offering price per Share. The
Underwriter's Warrants cannot be transferred, assigned or hypothecated for one
year from the date of their issuance, except that they may be assigned, in
whole or in part, to any successor, officer or partner of the Underwriter (or
to officers and partners of any such successor or partner). The Underwriter's
Warrants will contain anti-dilution provisions providing for appropriate
adjustment of the exercise price and number of Shares which may purchased upon
exercise upon the occurrence of certain events. The anti-dilution provisions
of the Underwriter's Warrants generally are triggered by the issuance of
Common Stock (or securities convertible or exchangeable into common stock) by
the Company at prices below the market price of the Common Stock at the time
of such issuance (subject to certain exceptions), as well as stock splits,
stock dividends and other similar dilutive events in which the Company
increases its outstanding stock without receiving additional consideration.
The Company has agreed that it will, upon request of the Representative within
the four-year period commencing one year from the Effective Date, register the
Underwriter's Warrants and the underlying securities once at the Company's
expense. The Company has also agreed, during the four-year period commencing
one year from the Effective Date, to register on a "piggy-back" basis, and on
an unlimited number of occasions, the Underwriter's Warrants and the
underlying securities whenever the Company files a Registration Statement.
See "RISK FACTORS - Underwriter's Warrants."
Holders of four percent (4%) or more of the Company's outstanding shares have
agreed not to sell, grant any option for sale, or otherwise dispose of,
directly or indirectly, any shares of the Company's Common Stock or other
securities of the Company for a period of twelve months from the date of the
consummation of the Offering.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby are being passed
upon for the Company by Roger L. Fidler, Esq., 400 Grove Street, Glen Rock,
New Jersey 07452. Mr. Fidler is the beneficial owner of 75,000 shares of the
Company's Common Stock and from inception until now was and is a director and
president of the Company. The Underwriter is represented by Steven I.
Gutstein, Esq., 276 Fifth Avenue, New York, New York 10001.
EXPERTS
The financial statements of PPA Technologies, Inc. for the years ending June
30, 1996 and June 30, 1995 included elsewhere in this Prospectus have been
included herein and in reliance upon the report of Thomas P. Monahan, CPA, an
independent certified public accountant, appearing elsewhere herein, and upon
the authority of said firm as an expert in accounting and auditing.
ADDITIONAL INFORMATION
The Company will not become subject to the reporting requirements of
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 until
completion of this Offering. The Company has filed with the Securities and
Exchange Commission (the "Commission"), Washington, D.C. 20549, a Registration
Statement on Form S-1, including amendments thereto, under the Act with
respect to Securities offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits and
schedules filed therewith, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Securities offered hereby,
reference is hereby made to such registration statement and to the exhibits
and schedules filed therewith. Statements contained in the Prospectus
regarding the contents of any contract or other document referred to are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the registration
statement, each such statement being deemed to be qualified in its entirety by
such reference. The registration statement, including all exhibits and
schedules thereto, may be inspected without charge at the principal office of
the Commission, Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549-1004, and at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and at 7 World Trade Center, Suite 1300, New York, New
York 10048 and copies of all or any part thereof may be obtained from such
offices upon the payment of prescribed fees.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. Indemnification of Directors and Officers.
The By-Laws of the Company provide for indemnification of officers and
directors to the maximum extent allowed by the law of New Jersey, set forth in
greater detail below.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and persons controlling
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.
Article VII of the By-Laws of the Company provide for the maximum
indemnification allowed by the law of the State of New Jersey as follows:
"Every person who is or was a director, officer, employee or agent of the
Corporation, or of any corporation which he has served as such at the request
of the Corporation, shall be indemnified by the Corporation to the fullest
extent permitted by law against all expenses and liabilities reasonably
incurred by or imposed upon him, in connection with any proceeding to which he
may be made, or threatened to be made, a party, or in which he may become
involved by reason of his being or having been a director, officer, employee
or agent of the Corporation, or such other corporation, at the time the
expense or liabilities are incurred."
ITEM 25. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered (other than underwriting
discounts) are estimated as follows:
<TABLE>
<S> <C>
Registration Fee-Securities and
Exchange Commission..................... $ 5,025.20
NASD Fee ................................... 1,500.00
Transfer Agent's Fee and Expenses .......... 2,000.00
Legal Fees and Expenses .................... 100,000.00
Blue Sky Fees and Expenses ................. 15,000.00
Printing Expenses (including securities) ... 25,000.00
Miscellaneous .............................. 25,000.00
Total.............................. $165,000.00
Estimated.
</TABLE>
ITEM 26. Recent Sales of Unregistered Securities
The following sales made by the issuer within the past three years were
made under circumstances not involving any public offering, and which were
exempt from the registration requirements of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof and/or the Rules and Regulations
promulgated thereunder, specifically, Rule 504, Regulation D:
<TABLE>
<S> <C> <C> <C> <C>
Purchaser Security Amount Date Consideration
Robert Kaplon Common 30,000 shares 3/15/95 $ 300
Gary Metzger Common 25,000 shares 6/30/96 $50,000
AMCO Plastics Common 12,500 shares 11/30/96 $25,000
An Lou Chang Common 30,000 shares 07/01/97 $60,000
Eve Chang Debt $60,000 note 07/01/97 $60,000
Carl D. Fraley Debt $50,000 note 07/01/97 $50,000
Ray Beeler Debt $50,000 note 07/01/97 $50,000
Henry MacUga Debt $25,000 note 07/01/97 $25,000
Haskell Bernat Debt $25,000 note 07/01/97 $25,000
Edward Santangelo Debt $25,000 note 07/01/97 $25,000
Martin Santangelo Debt $25,000 note 07/01/97 $25,000
David Schotz Debt $25,000 note 07/01/97 $25,000
Lois S. MacUga Debt $12,500 note 07/01/97 $12,500 Aaron
Lehman Debt $12,500 note 07/01/97 $12,500
David Lipson Debt $12,500 note 07/01/97 $12,500
</TABLE>
ITEM 27. Exhibits and Financial Statement Schedules
1.(a) Form of Underwriting Agreement
(b) Form of Selected Dealers Agreement
3.(a) Registrant's Certificate of Incorporation
(b) Amendment to Certificate of Incorporation
(c) Registrant's By-Laws
4.(a) Specimen Security Certificate
(b) Form of Warrant
(c) Form of Underwriter's Warrant
(e) Form of Warrant Agreement
5.(a) Consent and Opinion of Roger Fidler*
10. Material Contracts
(a) Employment Agreement between the Company
and Gerald Sugerman
(b) Employment Agreement between the Company
and Roger Fidler
(c) Lease
24.(a) Consent of Thomas Monahan, Certified Public
Accountant
* To be filed by Amendment
ITEM 28. Undertakings
The undersigned Registrant hereby undertakes that:
(A) 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 Securities Act of 1933;
(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; and,
(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, including
(but not limited to) any addition or deletion of a managing underwriter.
(B) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(C) To remove from registration, by means of a post-effective
amendment to the Registration Statement, any of the securities offered hereby
which are not sold pursuant to the terms of this offering.
(D) Will provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names are required by the underwriter to permit prompt delivery to each
purchaser.
(E) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer 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 small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer 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 small business issuer will, unless in the
opinion of its counsel has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form SB-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Hackensack and State of New Jersey,
on the _th day of October, 1997.
PPA TECHNOLOGIES, INC.
BY:
Roger Fidler, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
/S/ ROGER FIDLER
President, November 12, 1997 Roger Fidler
Director
/S/ GERRY SUGERMAN
Director, November 12, 1997 Gerry Sugerman
Treasurer, Secretary
/S/ JAMES WRIGHT
Director, November 12, 1997 James Wright
/S/ ALBERT MERSBERG
Director, November 12, 1997 Albert Mersberg
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT MADE UNDER THE SECURITIES ACT
OF 1933 /THE "ACT") OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT.
PPA TECHNOLOGIES, INC.
UNDERWRITER'S WARRANT
PPA Technologies, Inc., a New Jersey
corporation (the "Company"), hereby certifies that,
for an aggregate consideration of $ ,
(" ") is entitled, subject to the terms set
forth below, at any time or from time to time but not
earlier than twelve (12) months nor later than five
(5) years from , 1998 (the "Issue Date"),
to purchase from the Company
, ( ) Units, each such Unit
consisting of one share of Common Stock (no par value)
of the Company and one redeemable common stock
purchase warrant, exercisable into one share of Common
Stock per warrant for a period of one year from the
date of the purchase from the Company of the Unit at
the purchase price per Unit of Seven Dollars ($7.25)
(equal to 120% of the public offering price per Unit)
(the purchase price per unit, as adjusted from time to
time pursuant to the provisions hereunder set forth,
being referred to herein as the "Exercise Price") ,
all as described in the prospectus contained in the
Company's Registration Statement on Form SB-2 (File
No. ) , as amended, which Registration
Statement was originally filed with the Securities and
Exchange Commission on
, 1997 (the "Registration Statement").
The Issue Date shall be the same date as the closing
date of the public offering. Except as set forth
herein, the Units issuable upon exercise of this
Underwriter's Warrant have the same respective terms
as the Units offered by the Registration Statement.
This Underwriter's Warrant and all rights hereunder,
to the extent such rights shall not have been
exercised, shall terminate and become null and void to
the extent the holder fails to exercise any portion of
this Underwriter's Warrant prior to 5:00 p.m., New
Jersey time, on , 2003, or if the Transfer
Agent (as defined in Section 4 below) shall not
regularly be open for business on that day, then on
the next such business day.
1. Registration.
a. The Company agrees for a period of four
years commencing one year after the Issue Date, that
if during such four-year period, no current
registration statement by the Company is on file with
the U.S. Securities and Exchange Commission covering
the securities underlying this Underwriter's Warrant,
upon receipt of a demand for registration in the form
of a written request from the holder of this
Underwriter's Warrant or a majority of the securities
issued or issuable hereunder, it will prepare and file
under the Act one registration statement or
Notification on Form 1-A, if then required, to permit
a public offering of this Underwriter's Warrant and
the securities then underlying this Underwriter's
Warrant, and will use its best efforts to cause such
registration statement or notification to become
effective at the earliest possible date and to remain
effective for a period not to exceed 90 days. The
Company will bear the cost of such registration
statement, including but not limited to counsel fees
of the Company and disbursements, accountants' fees
and printing costs, if any, but excluding the fees of
counsel and others hired by the holder. The foregoing
demand registration right by the Underwriter at the
expense of the Company shall be on a one-time request
basis only.
b. Additionally, whenever during the four-year
period commencing one year after the Issue Date the
Company or any successor proposes to file a
Notification on Form 1-A under the Act or a
registration statement relating to a public offering
of its equity securities under the Act (whether for
its own benefit or for the holders of any of its
equity securities or otherwise), but not including a
registration on Form S-8, it shall offer, upon 30
days' written notice to the holder of this
Underwriter's Warrant or the holders of the underlying
securities (the "Holders"), to include and shall
include, at the Holders' option(s), all or any portion
of this Underwriter's Warrant and the securities
underlying this Underwriter's Warrant in such
registration statement at the expense of the Company,
limited in the case of a Regulation A Offering to the
amount of the available exemption.
c. In connection with any registration
statement or Notification on Form 1-A pursuant to
subsection a or b of this Section 1, the Company
agrees that it will furnish to you the representations
and warranties and opinions of counsel to the same
effect as provided in Sections 1 and 5(b) of the
Underwriting Agreement entered into by the parties
hereto on , 1997 (the "Underwriting
Agreement"), to the extent then applicable, except
that such representations, warranties, and opinions
shall relate to the registration statement or
Notification on Form 1-A and to the securities which
shall be offered thereby. The Company and you further
agree that as to such registration statement or
Notification on Form 1-A, the provisions of Section 3
(but not including subsections (l), (m) or (n)) of the
Underwriting Agreement, shall apply. The Company and
you further agree that the provisions of section 8 of
the Underwriting Agreement shall apply, with the
holder having the rights and obligations afforded the
Underwriter in that section, and that such section
shall apply with respect to that offering.
2. Exercise of Warrant.
a. This Underwriter's Warrant may be exercised
in full or from time to time in part by the Holder by
surrendering it, with the form of subscription at the
end hereof duly executed by such holder, to the
Company's transfer agent accompanied by payment in
full, in cash or by certified or official bank check,
of the Exercise Price payable in respect of all or
part of this Underwriter's Warrant being exercised.
b. Upon such surrender of this Underwriter's
Warrant and payment of such Exercise Price, the
Company shall issue and cause to be delivered to or
upon the written order of the holder of this
Underwriter's Warrant and in such name or names as the
Holder may designate a certificate or certificates for
the number of full Units so purchased, together with
cash, as provided in Section 3 hereof, in respect of
any fractional Units otherwise issuable upon such
surrender. Such certificate or certificates shall be
deemed to have been issued and any person so
designated to be named therein shall be deemed to have
become a Holder of record of such Units as of the date
of surrender of this Underwriter's Warrant and payment
of such Exercise Price notwithstanding that the
certificate or certificates representing such Units
shall not actually have been delivered or that the
stock transfer books of the Company shall then be
closed.
c. If less than the entire Underwriter's
Warrant is exercised, the company shall, upon such
exercise, execute and deliver to the holder thereof a
new warrant in the same form as this Underwriter's
Warrant evidencing that Underwriter's Warrant to the
extent not exercised.
d. The Company shall, at the time of any
exercise of all or part of this Underwriter's Warrant,
upon the request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such
holder any rights to which such Holders shall continue
to be entitled after such exercise in accordance with
the provisions of this Underwriter's Warrant, provided
that if the holder of this Underwriter's Warrant shall
fail to make any such request, such failure shall not
affect the continuing obligations of the Company to
afford to such Holder any such rights.
3. Fractional units. No fractional securities or
scrip representing fractional securities shall be
issued upon the exercise of this Underwriter's
Warrant. With respect to any fraction of a Unit
called upon any such exercise hereof, the Company
shall pay to the holder an amount in cash equal to
such fraction multiplied by the current market value
of such fractional securities, determined as follows:
a. If the security is listed on a national
securities exchange or admitted to unlisted trading
privileges on such exchange, the current value shall
be the last reported sale price of the security on
such exchange on the last business day prior to the
date of exercise of this Underwriter's Warrant, or if
no such sale is made on such day, the average closing
bid and asked prices for such day on such exchange; or
b. If the security is not listed or admitted to
unlisted trading privileges, the current value shall
be the last reported sale price or the mean of the
last reported bid and asked prices reported by the
National Association of Securities Dealers Automated
Quotation System (or, if not so quoted on NASDAQ, by
the National Quotation Bureau, Inc.) on the last
business day prior to the date of the exercise of this
Underwriter's Warrant; or
c. If the security is not so listed or admitted
to unlisted trading privileges and prices are not
reported on NASDAQ, the current value shall be an
amount, not less than the book value, determined in
such reasonable manner as may be prescribed by the
Board of Directors of the Company.
4. Exchange, Assignment, or Loss of Warrant.
a. This Underwriter's Warrant is exchangeable,
without expense, at the option of the Holder, upon
presentation and surrender hereof to the transfer
agent for other Underwriter's Warrants of different
denominations entitling the Holder thereof to purchase
in the aggregate the same number of securities
purchased hereunder. This Underwriter's Warrant is
restricted from sale, transfer, assignment, or
hypothecation except to the officers, principals and
successors of Kenneth Jerome & Co., Inc., and may be
exercised in whole or in part at any time and from
time to time during the four (4) year period following
the expiration of one (1) year from the Issue Date.
Any such assignment shall be made by surrender of this
Underwriter's Warrant to American Stock Transfer and
Registrar Co., Inc. or any successor transfer agent
designated by the Company in writing (the "Transfer
Agent") with the Form of Assignment annexed hereto
duly executed and funds sufficient to pay any transfer
tax, whereupon the Transfer Agent shall, without
charge, cause to be executed and delivered a new
Underwriter's Warrant in the name of the assignee
named in such instrument or assignment and this
Underwriter's Warrant shall promptly be canceled.
This Underwriter's Warrant may be divided or combined
with other Underwriter's Warrants that carry the same
rights upon presentation hereof to the office of the
Transfer Agent together with a written notice
specifying the name and denomination in which new
Underwriter's Warrants are to be issued and signed by
the holder hereof. The term "Underwriter's Warrant"
as used in this Warrant includes any Underwriter's
Warrants issued in substitution for or replacement of
this Underwriter's Warrant, or into which this
Underwriter's Warrant may be divided or exchanged.
b. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or
mutilation of this Underwriter's Warrant, and, in the
case of loss, theft or destruction of reasonably
satisfactory indemnification, and upon surrender and
cancellation of this Underwriter's Warrant, if
mutilated, the Transfer Agent will cause to be
executed and delivered a new Underwriter's Warrant of
like tenor and date. Any such new Underwriter's
Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the
Company, whether or not this Underwriter's Warrant so
lost, stolen, destroyed, or mutilate
5. Rights of the Holder. The Holder of this
Underwriter's Warrant shall not, by virtue hereof, be
entitled to any rights of a stockholder in the
Company, either at law or equity, and the rights of
the holder are limited to those expressed in this
Underwriter's Warrant.
6. Adjustments.
a. In case the Company shall, while this
Underwriter's Warrant remains in force, effect a
recapitalization of such character that the securities
covered hereby shall be changed into or become
exchangeable for a larger or smaller number of such
securities, then thereafter, the number of securities
of the Company which the holder of this Underwriter's
Warrant shall be entitled to purchase hereunder, shall
be increased or decreased, as the case may be, in
direct proportion to the increase or decrease in the
number of shares of the Company, by reason of such
recapitalization, and the purchase price hereunder,
per Unit, shall in the case of an increase in the
number of shares be proportionately reduced, and in
the case of a decrease in the number of share be
proportionately increased.
b. In case the Company shall, at any time prior
to the
exercise of an Underwriter's Warrant, consolidate or
merge with, or shall transfer its property as an
entirety to, or substantially as
an entirety to, any other corporation, the Holder of
an Underwriter's Warrant who thereafter exercises the
same as herein
provided shall be entitled to receive, for the
purchase price per Unit stated in this Underwriter's
Warrant, that number of shares or other securities or
property of the corporation resulting from such
consolidation or merger or transfer to which each Unit
deliverable upon exercise of this Underwriter's
Warrant would have been entitled, upon such
consolidation or merger or transfer, had the holder of
such Underwriter's Warrant exercised his right to
purchase Units, and had such holder exercised the
redeemable common stock purchase warrant comprising a
part of the Unit, and had said shares or other
securities been issued and outstanding, and had such
holder been the holder of record of such shares or
other securities at the time of such consolidation or
merger or transfer.
c. In case the Company shall at any time prior to
the exercise of an Underwriter's Warrant make any
distribution of its assets to holders of its Common
Stock by liquidating or partial liquidating dividend
or by way of return of capital, or other than as a
dividend payable out of earnings or any surplus
legally available for dividends under the laws of the
State of New Jersey, then the Holder of an
Underwriter's Warrant who thereafter exercises the
same as herein provided and the redeemable common
stock purchase warrant comprising a part of the Unit
as therein provided after the date of record for the
determination of those Holders of Common Stock
entitled to such distribution of assets, shall be
entitled to receive for the purchase price, in
addition to each Share, the amount of such assets (or
at the option of the Company a sum equal to the value
thereof at the time of such distribution to holders of
Common Stock as such value is determined by the Board
of Directors of the Company in good faith) which would
have been payable to such Holder had he been the
holder of record of such share receivable upon
exercise of such Underwriter's Warrant and redeemable
common stock purchase warrant on the record date for
the determination of those entitled to such
distribution.
d. In case of the dissolution, liquidation or
winding-up of the Company, all rights under this
Underwriter's Warrant and the redeemable common stock
purchase warrants shall terminate on a date fixed by
the Company, such date so fixed to be not earlier than
the date of the commencement of the proceedings for
such dissolution, liquidation or winding-up and not
later than thirty days after such commencement date.
In any such case of termination of purchase rights the
Company shall give notice of such termination date to
the registered holder of this Underwriter's Warrant.
e. Upon any adjustment of the purchase price
and/or any increase or decrease in the number of
securities purchasable upon the exercise of this
Underwriters Warrant or the redeemable common stock
purchase warrant comprising a part of the Unit, then,
and in each case, the company, within 30 days
thereafter, shall give written notice thereof to the
registered holder of this Underwriter's Warrant, which
notice shall state the adjusted purchase price and/or
the increased or decreased number of securities
purchasable upon the exercise of this Underwriter's
Warrant or the redeemable common stock purchase
warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such
calculation is based.
7. Notices of Record Dates, Etc. Upon the
occurrence of any of the events listed in subsections
a to c below, the Company shall mail or cause to be
mailed (on the same date as the company informs its
stockholders of such event) to the Holder of this
Underwriter's Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or
right and stating the amount and character of such
dividend, distribution or right, or (ii) the date on
which a record is to be taken for the purpose of
voting on or approving such reorganization,
recapitalization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or
winding up and the date on which such event is to take
place and the time, if any is to be fixed, as of which
the holder of record of Common Stock (or any other
securities at the time deliverable on exercise of this
Underwriter's Warrant) shall be entitled to exchange
its shares of Common Stock (or such other securities)
for securities or other property deliverable on such
reorganization, recapitalization, reclassification,
consolidation, merger, conveyance, dissolution,
liquidation or winding up.
a. The Company shall fix a record date of the
holders of Common Stock (or other securities at the
time deliverable on exercise of this Underwriter's
Warrant) for the purpose of entitling or enabling them
to receive any dividends or other distribution, or to
receive any right to subscribe for or purchase any
shares of any class or any securities, or to receive
any other right contemplated by section 6 or
otherwise; or
b. Any reorganization or recapitalization of
the Company, any reclassification of the Capital stock
of the Company, any consolidation or merger of the
Company with or into another corporation or any
transfer of all or substantially all of the assets of
the Company to another entity; or
c. The voluntary or involuntary dissolution,
liquidation or winding up of the Company.
8. Reservation of the Units and Shares. The
Company shall at all times reserve, and the Transfer
Agent shall be irrevocably authorized and directed at
all times to reserve, for the purpose of issuance on
exercise of this Underwriter's Warrant, such number of
authorized Units and authorized shares of Common Stock
or such class or classes of capital stock or other
securities as shall from time to time be sufficient to
comply with this Underwriter's Warrant, and the
Company shall promptly take such corporate action as
may, in the opinion of its counsel, be necessary to
increase its authorized and unissued Units and
authorized and unissued shares of Common Stock or such
other class or classes of capital stock or other
securities to such number as shall be sufficient for
that purpose. The Company shall keep a copy of this
Underwriter's Warrant on file with the Transfer Agent.
The Company shall supply the Transfer Agent with duly
executed stock and other certificates, as appropriate,
for such purpose and shall provide or otherwise make
available any cash which may be payable as provided in
section 3 hereof.
9. Approvals. The Company shall from time to time
use its best efforts to obtain and continue in effect
any and all permits, consents, registrations,
qualifications and approvals of governmental agencies
and authorities and to make all filings under
applicable securities laws that may be or become
necessary in connection with the issuance, sale,
transfer and delivery of this
Underwriter's Warrant and the issuance of securities
on any exercise hereof, and if any such permits,
consent, qualifications, registrations, approvals or
filings are not obtained or continued in effect as
required, the Company shall immediately notify the
holder thereof. Nothing contained in this Section 9
shall in any way expand, alter or limit the rights of
the holder set forth in Section 1 hereof.
10. Survival. All agreements, covenants,
representations and warranties herein shall survive
the execution and delivery of this Underwriter's
Warrant and any investigation at any time made by or
on behalf of any parties hereto and the exercise, sale
and purchase of this Underwriter's Warrant (and any
other securities or property) issuable on exercise
hereof.
11. Remedies. The company agrees that the remedies
at law of the Holder of this Underwriters Warrant, in
the event of any default or threatened default by the
Company in the performance of or compliance with any
of the terms of this Underwriter's Warrant, are not
adequate and such terms may, in addition to and not in
lieu of any other remedy, be specifically enforced by
a decree of specific performance of any agreement
contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Notices. All demands, notices, consents and
other communications to be given hereunder shall be in
writing and shall be deemed duly given when delivered
personally or by telecopier or five days after being
mailed by first class mail, postage prepaid, properly
addressed, if to the holder of this Underwriter's
Warrant, to Kenneth Jerome & Co., Inc., 247 Columbia
Turnpike, Florham Park, New Jersey 07932 (201) 966-
6669 Fax:(201) 966-6319 Attention: Mr. Robert Kaplon,
with a copy to Steven I. Gutstein, Esq., 276 Fifth
Avenue, New York, New York 10001 (212) 725-7110 Fax:
(212) 725-7527; if to the Company, to PPA
Technologies, Inc., 163 South Street, Hackensack, New
Jersey 07601 Attention: Gerald Sugerman, with a copy
to: Roger Fidler, Esq., 400 Grove Street, Glen Rock,
New Jersey 07452 (201) 457-1221 Fax: (201)457-1331.
The Company and each Holder may change such address at
any time or times by notice hereunder to the other.
13. Amendments; Waivers; Terminations; Governing Law;
Headings. This Underwriter's Warrant and any term
hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by
the party against which enforcement of such change,
waiver, discharge or termination is sought. This
Underwriter's Warrant and any disputes arising
hereunder shall be governed by and construed and
interpreted in accordance with the laws of the State
of New Jersey. The headings in this Underwriter's
Warrant are for convenience of reference only and are
not part of this Underwriter's Warrant.
14. Payment of Taxes. The Company shall pay all
taxes, if any, attributable to the initial issuance of
this Underwriter's Warrant and the Units and the
securities comprising the Units; provided, however,
that the Company shall not be required to pay any tax
which may be payable in respect of any secondary
transfer of this Underwriter's Warrant on the Units.
DATED: , 1997
PPA
TECHNOLOGIES, INC., a
New Jersey
corporation
(CORPORATE SEAL)
By:
President
ATTEST:
By:
Corporate Secretary
FORM OF ASSIGNMENT
(To be executed upon transfer of Warrant)
FOR VALUE RECEIVED,
hereby sells, assigns and transfers to
the within Underwriter's Warrant together with all
rights, title and interest therein, and does hereby
irrevocably constitute and appoint attorney to
transfer such Underwriter's Warrant on the warrant
register of the within named Company, with full power
of substitution.
Signature:
Dated:
Signature
Guarantee:
SUBSCRIPTION
(To be completed and signed only upon an exercise
of
the Underwriter's Warrant in whole or in part)
To:
as Transfer Agent for PPA Technologies, Inc.
The undersigned, the Holder of the attached
Underwriter's Warrant, hereby irrevocably elects to
exercise the purchase right represented by the
Underwriter's Warrant for, and to purchase thereunder,
Units (as such terms are defined in the original
Underwriter's Warrant dated , 1997, from PPA
Technologies, Inc.), and herewith makes payment of $
therefor in cash or by certified or official bank
check. The undersigned hereby requests that the
Certificate(s) for such securities be issued in the
name(s) and delivered to the address(es) as follows:
Name:
Address:
Deliver to:
Address:
(Attach additional sheets as necessary)
If the foregoing Subscription evidences an
exercise of the Underwriter's Warrant to purchase
fewer than all of the Units (or other securities or
property) to which the undersigned is entitled under
such Underwriter's Warrant, please issue a new
Underwriter's Warrant, of like tenor, for the
remaining Units (or other securities or property) in
the name(s), and deliver the same to the address(es),
as follows:
Name:
Address:
(Attach additional sheets as necessary)
DATED:
(Name of
Holder)
(Signature of
Holder or Authorized Signatory)
(Social
Security or Taxpayer Identification Number of Holder)
??
KENNETH JEROME & CO., INC.
147 Columbia Turnpike
Florham Park, New Jersey 07932
SELECTED DEALERS AGREEMENT
Gentlemen:
Kenneth Jerome & Co., Inc. (the "Representative" or
the "Underwriter") , as representative for the
underwriters ("Underwriters"), proposes to offer on a
firm commitment basis, 1,000,000 Units (the "Units" or
"Securities") of PPA Technologies, Inc., a New Jersey
corporation, (the "Company"). Such offer will be made
pursuant to the terms and conditions of the
Underwriting Agreement between the Company and the
Underwriters. The Units to be offered for sale are
more particularly described in the enclosed
preliminary Prospectus ("Prospectus"). We invite your
participation, as a Selected Dealer, on the terms and
conditions stated herein.
1. Offering Price. The Units are to be reoffered to
the public at a price of not less than $6.00 per Unit
and shall not be directly or indirectly offered or
sold to the public by Selected Dealers at any lower
price during the period this Agreement is in effect.
The Company proposes to issue and sell a 1,000,000
Units.
2. Selected Dealers. Members of the National
Association of Securities Dealers, Inc. (the "NASD")
who shall agree to reoffer Units hereunder
(hereinafter referred to as "Selected Dealers" or
"Participating Dealers") will be allowed a selling
concession of ten percent (10%) payable as hereinafter
provided. No concession shall be earned or paid unless
a Closing shall take place prior to the "Termination
Date" as defined in the Registration Statement filed
with the United States Securities and Exchange
Commission. You agree that in reoffering said
securities, if your offer is accepted after the
Effective Date, you will make a bona fide public
distribution of same. You will advise us upon request
of the Securities purchased by you remaining unsold
and we shall the right to repurchase such Securities
upon demand at the public offering price without
payment of any concession with respect to any
Securities so repurchased.
3. Subscriptions. The Underwriter reserves the
right
to reject all offers to purchase, in whole or part, to
make allotments and to close the subscription books at
any time without notice. The Units allotted to you
will be confirmed, subject to the terms and conditions
of this Agreement. Payments for Units purchased by
you are to be made by check or money order only and
shall be made payable to the Representative as Agent
or Trustee for the Issuer. In respect of all Units
purchased by you pursuant hereto, you will promptly
transmit (i.e., by no later than noon of the next
business day following receipt by you) to Herzog Heine
Geduld, Inc. (the "Clearing Broker"), having its
principal office at 525 Washington Boulevard, Jersey
City, New Jersey 0731, your certified check or
cashier's check for payment for the full amount of the
Public offering Price for the number of Units
purchased, without deduction for any commission or
concession, in compliance with the Securities Exchange
Act of 1934, as amended (the "1934 Act"). Your
transmittal letter to the Escrow Agent accompanying
checks or money orders shall include a written account
of sale, which shall include each Purchaser's name and
address, the number of Units Purchased, the amount
paid therefor, Social Security number, taxpayer
identification number, and whether the consideration
received was in the form of a check or money order.
You shall concurrently send a copy of said transmittal
letter to us.
NO COMMISSIONS SHALL BE PAYABLE, AND ALL SUBSCRIPTIONS
ARE SUBJECT TO REJECTION BY THE UNDERWRITER, UNLESS
AND UNTIL THE SELECTED DEALER HAS COMPLIED WITH THE
ABOVE UNDERLINED PROVISIONS.
Each sale shall be contingent upon the sale of
1,000,000 Units being sold on or before the
Termination Date, and upon the acceptance of such sale
by the undersigned. In the event any order submitted
to you is not accepted, the Representative will return
all funds paid by the purchasers. Payment of the
selling concessions in respect of each such sale will
be made to the Selected Dealer, by the Underwriter
when and only in the event that 1,000,000 Units are
sold by the Termination Date and the proceeds released
by the Representative. The offering is made subject
to the issuance and delivery of the Units and the
acceptance hereof by the Underwriter, to the approval
of legal matters by counsel, and to the terms and
conditions herein set forth.
If an offer to purchase is rejected or if a payment is
received which proves insufficient or worthless, any
compensation paid to the Selected Dealer shall be
returned either by the Selected Dealer's remittances
in cash or by a charge against the account of the
Selected Dealer, as the Underwriter may elect.
4. Offering to Public. Neither you nor any other
person is, or has been, authorized to give any
information or to make any representations in
connection with the sale of the Units other than as
contained in the Prospectus. The Selected Dealer will
not reoffer the Units pursuant to this Agreement
unless the Prospectus is furnished to the purchaser at
least 48 hours prior to the mailing of the
confirmation of sale, or is sent to the person under
such circumstances that it would be received by him 48
hours prior to his receipt of a confirmation of the
sale. The Dealer understands that during the 90 day
period after the first date upon which the Units of
the Company are bona fide offered to the public, all
Dealers effecting transactions in the Units shall be
required to deliver the Company's current Prospectus
to any purchasers thereof prior to or concurrent with
the receipt of the confirmation of sale. Additional
copies of the then current Prospectus will be supplied
by the Underwriter in reasonable quantities upon
request. No Selected Dealer is authorized to act as
agent for the undersigned in any respect.
5. Compliance with Securities Laws. Upon becoming a
Selected Dealer, and in purchasing and reoffering the
Units, you agree to comply with all applicable
requirements of the Securities Act of 1933, as amended
(the 111933 Act") , the 1934 Act, any applicable state
securities or "Blue Sky" laws, and the Rules of Fair
Practice of the NASD, including, but not limited to,
Article III, Section I thereof, and the
interpretations of said section promulgated by the
Board of Governors of such Association, including an
Interpretation with respect to free-riding and
withholding dated November 1, 1970, and as thereafter
amended, and including information concerning the
Board of Governor's Interpretation thereof dated March
2, 1979, to NASD members. You also agree to comply
with Sections 8, 24, 25 and 36 of Article III of the
Rules of Fair Practice of the NASD. upon application,
you will be informed as to the states in which we have
been advised by counsel to the Company or counsel to
the Underwriter that the Units have been qualified for
sale under the respective securities or Blue Sky Laws
of such states, but we assume no obligation or
responsibility as to the right of any Selected Dealer
to sell the Units in any state or as to any sale
therein.
By acceptance of this Agreement, you represent that
you are a member in good standing of the NASD.
By acceptance of this Agreement, each Selected Dealer
has assumed full responsibility for thorough and prior
training of its representatives concerning the selling
methods to be used in connection with the offer and
sale of the Units, giving special emphasis to the
NASD's principles of full and fair disclosure to
prospective investors, suitability standards and the
prohibitions against "Free-Riding and Withholding." .
Each Selected Dealer agrees to indemnify and hold
harmless the Underwriter, the Company and the other
Selected Dealers against and from any liability, loss,
damage, or expense arising out of any failure by the
Selected Dealer to comply with the 1933 Act, the 1934
Act, applicable securities laws of any state, the
rules and regulations of the Securities and Exchange
Commission and the Rules of Fair Practice of the NASD,
due to any act of omission by the Selected Dealer.
By submitting an offer to purchase you confirm that
you may, in accordance with Rule 15c3-1 adopted under
the 1934 Act, agree to purchase the number of Units
you may become obligated to purchase under the
provisions of this Agreement.
6. Prospectus and Offering. We have been advised by
the Company that the offering under the Registration
Statement on Agreement, each Selected Dealer
acknowledges receipt of a copy of Form SB-2 (File No.
)with respect to the subject Units commenced on
___________________, 1996 . By signing this
Agreement each Selected Dealer acknowledges receipt of
a copy of the Prospectus included in said Registration
Statement. Additional copies of the Prospectus will
be supplied to you in reasonable quantities upon
request.
You will not, until advised by us in writing or by
wire that the entire offering has been distributed and
closed, bid for or purchase securities in the open
market or otherwise make a market in the Securities or
otherwise attempt to induce others to purchase the
Securities in the open market. Nothing contained in
this paragraph shall however preclude you from acting
as agent in the execution of unsolicited orders of
customers effectuated for them through a market maker.
7. Liability, Nothing herein will constitute the
Underwriter or the Selected Dealers as an association,
partnership or joint venture with each other, or as an
unincorporated business or other separate entity, but
you will be responsible for your share of any
liability or expense based ode any claim to the
contrary. As the Underwriter, we shall have full
authority to take such action as we may deem advisable
in all matters pertaining to the offering. The
Underwriter shall not be under any liability (except
for its own want of good faith) for or in respect of:
the validity or value of, or title to any of the Units
or securities underlying the Units; the form of, or
the statements contained in, or the validity of the
prospectuses or any amendment or supplement thereto;
any document incorporated by reference therein or any
other instruments executed by or on behalf of the
Company or others; the form or validity of the
Underwriting Agreement or this Agreement; the delivery
of the Units or the securities underlying the Units;
the performance by the Company of the Units or the
securities underlying the Units or others of any
agreement on its or their part; the qualifications of
the Units or the securities underlying the Units for
sale or the legality of the Units and such securities
for investment under the laws of any jurisdiction; or
any matter in connection with any of the foregoing;
provided, however that nothing in this paragraph shall
be deemed to relieve the Underwriter from any
liability imposed by federal securities laws.
8. Communications. All communications from Selected
Dealers should be addressed to Kenneth Jerome & Co.,
Inc., P.. Box 38, 147 Columbia Turnpike, Florham Park,
New Jersey 07932, Attention: Robert Kaplon, President.
Any notice from the Underwriter to a Selected Dealer
shall be deemed to have been duly given if mailed,
telecopied, or telegraphed to such Selected Dealer at
the address first appearing in this Agreement.
9. Amendment. This Agreement may be supplemented or
amended by the Underwriter by written notice thereof
to you, and any such supplement or amendment to this
Agreement shall be effective after the date of such
supplement or amendment.
10. Governing Law. This Agreement shall be governed
by the laws of the State of New Jersey.
This Agreement supersedes any prior understanding you
have with the Underwriter with respect to the subject
matter hereof. If the foregoing is acceptable to you,
please sign and return the enclosed copy of this
Agreement.
Very truly yours,
KENNETH JEROME & CO., INC.
By:__________________________
Robert Kaplon, President
OFFER TO PURCHASE
The undersigned does hereby offer to purchase (subject
to the right to revoke as set forth in the Agreement)
_______________* Units in accordance with the terms
and conditions set forth above. We hereby acknowledge
receipt of the Prospectus referred to herein above
relating to such Units. We further state that in
purchasing such Units we have relied upon such
Prospectus and upon no other statement whatsoever,
written or oral.
_______________________________
(Name of Dealer)
By:_____________________________
Name:
Title:
Address:
Telephone:
Telecopy:
* If a number appears here which does not correspond
with what you wish to purchase, you may change the
number by crossing of the number, and inserting a
different number and initializing the change.
Bob,
With respect to the DTC issue, I suggest the
following. Accompany each of the above Selected
Dealer Agreements sent out with a cover letter. In
that cover you may state that " as a means to effect
the payment for the securities set forth in the
enclosed agreement we would appreciate effecting that
payment through DTC ("Depository Trust Company"). To
effect this transfer of funds please us with your
DTC/Clearing Number: __________________ as soon as
possible.
This will avoid the issue of a new amendment for an
amended exhibit and it is still consistent with the
agreement since good funds are still required. Only
the manner of transferring those funds has changed.
Roger
CERTIFICATE OF INCORPORATION
OF
PPA TECHNOLOGIES, INC.
THIS IS TO CERTIFY THAT, there is hereby
organized a corporation under and by virtue of N.J.S.
14A:l-l et seq., the "New Jersey Business Corporation
Act."
1. The name of the corporation is PPA
Technologies, Inc.
2. The address (and zip code) of this
corporation's initial registered office is:
400 Grove Street
Glen Rock, New Jersey 07452
and the name of the corporation's initial registered
agent at
such address is Roger L. Fidler.
3. The purposes for which this corporation is
organized are:
To engage in any activity within the purposes for
which corporations may be organized under the "New
Jersey Business Corporation Act." N.J.S. 14A:l-l et
seq.
4. The aggregate number of shares which the
corporation shall have the authority to issue is:
2,500 common shares, no par value.
5. The first Board of Directors of this
corporation shall consist of one Director and the name
and address of such person who is to serve as such
Director is:
Name: Roger L. Fidler
Address: 400 Grove Street, Glen Rock, New Jersey 07452
Zip Code: 07452
6. The name and address of each incorporator
is:
Name: Wanda L. Billet
Address: 400 Grove Street, Glen Rock, New Jersey
Zip Code: 07452
IN WITNESS WHEREOF, each individual incorporator,
each being over the age of eighteen years, has signed
this Certificate; or if the incorporator be a
corporation, has caused this Certificate to be signed
by its authorized officers, this eighteenth
day of July 1994.
/S/ Wand L. Billet
Wanda L. Billet
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
PPA Technologies, Inc.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4)
and Section 14A:9-4(3), Corporations, General, of the
New Jersey Statutes, the undersigned corporation
executes the following Certificate of Amendment to its
Certificate of Incorporation:
1. The name of the corporation is
PPA Technologies, Inc.
2. The following amendment to the Certificate
of Incorporation was approved by the directors and
thereafter duly adopted by the shareholders of the
corporation on May 24, 1996.
RESOLVED, that paragraph FOURTH of the
Certificate of Incorporation be amended to read as
follows:
"4. The aggregate number of shares which
the corporation shall have the authority to issue is
10,000,000 shares of common stock having no par value
and 1,000,000 shares of Preferred Stock having a par
value of $100 per share. The Preferred Stock may be
issued in such classes and with such preferences as
the Board of Directors may, from time to time, decide
in their sole discretion."
3. Adoption was by a vote of the shareholders
of the corporation taken at a properly noticed meeting
on May 24, 1996 at which a unanimous vote in favor of
the Amendment to the Articles of Incorporation was
made in accordance with the New Jersey Statutes.
Dated this 4th day of June, 1996.
BY: /S/ Roger L.
Fidler
Roger L.
Fidler, President
Attested: /S/ Gerald Sugerman
Gerald Sugerman
Corporate Secretary
EXPRESS MAIL
June 18, 1996
Bureau of Commercial Recording
820 Bear Tavern Road
CN 308
Trenton, NJ 08625-0308
Gentlemen:
Enclosed herewith for filing please find the
amendment to the Certificate of Incorporation of PPA
Technologies, Inc. along with a copy, a self-addressed
stamped envelope, and a check to cover the filing fee,
certified copy fee and expedited service fee in the
amount of $130.00.
Yours truly,
Roger L. Fidler
??
BY-LAWS
OF
PPA TECHNOLOGIES, INC.
ARTICLE I - OFFICES
1. The registered office of the corporation
shall be as designated in the Certificate of
Incorporation of PPA Technologies, Inc. (hereinafter
referred to as "PPA" or the "corporation"), unless
changed by resolution of the corporation's Board of
Directors.
2. The corporation may also have offices at
such other places as-the Board of Directors may from
time to time appoint or the business of the
corporation may require.
ARTICLE II - SEAL
1. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its
organization and the words "Corporate Seal, New
Jersey".
ARTICLE III - SHAREHOLDERS' MEETING
1. Meetings of the shareholders shall be held at
the office of the corporation at 400 Grove Street,
Glen Rock, New Jersey, or at such other place or
places, either within or without the State of New
Jersey, as may from time to time be selected.
2. The annual meeting of the shareholders, shall
be held on the second Saturday of February in each
year, if not a legal holiday, and if a legal holiday,
then on the next secular day following at 10:00
o'clock a.m. when they shall elect a Board of
Directors, and transact such other business as may
properly be brought before the meeting. If the annual
meeting shall not be called and held during any
calendar year, any shareholder may call such meeting
at any time thereafter.
3. The presence, in person or by proxy, of
shareholders entitled to cast at least a majority of
the votes which all shareholders are entitled to cast
on the particular matter shall constitute a quorum for
the purpose of considering such matter, and, unless
otherwise provided by statute, the acts, at a duly
organized meeting, of the shareholders present, in
person or by proxy, entitled to cast at least a
majority of the votes which all shareholders present
are entitled to cast shall be the acts of the
shareholders. The shareholders present at a duly
organized meeting can continue to do business until
adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Adjournment, or adjournments, of any annual or special
meeting may be taken but any meeting at which
directors are to be elected shall be adjourned only
from day to day, or for such longer periods not
exceeding fifteen days each, as may be directed by
shareholders who are present in person or by proxy and
who are entitled to cast at least a majority of the
votes which all such shareholders would be entitled to
cast at an election of directors until such directors
have been elected. If a meeting cannot be organized
because a quorum has not attended, those present may,
except as otherwise provided by statute, adjourn the
meeting to such time and place as they may determine,
but in the case of any
meeting called for the election of directors, those
who attend the second of such adjourned meetings,
although less than a quorum, shall nevertheless
constitute a quorum for the purpose of electing
directors.
4. Every shareholder entitled to vote at a
meeting of shareholders, or to express consent or
dissent to corporate action in writing without a
meeting, may authorize another person or persons to
act for him by proxy. Every proxy shall be executed
in writing by the shareholders, or by his duly
authorized attorney in fact, and filed with the
Secretary of the corporation. A proxy, unless coupled
with an interest, shall be revocable at will,
notwithstanding any other agreement or any other
provision in the proxy to the contrary, but the
revocation of a proxy shall not be effective until
notice thereof has been given to the Secretary of the
corporation. No unrevoked proxy shall be valid after
eleven months from the date of its execution, unless a
longer time is expressly provided therein, but in no
event shall a proxy, unless coupled with an interest
be voted on after three years from the date of its
execution. A proxy shall not be revoked by the death
or incapacity of the maker unless before the vote is
counted or the authority is exercised, written notice
of such death or incapacity is given to the Secretary
of the corporation. A shareholder shall not sell his
vote or execute a proxy to any person for any sum of
money or anything of value. A proxy coupled with an
interest shall include an unrevoked proxy in favor of
a creditor of a shareholder and such proxy shall be
valid so long as the debt owed by him to the creditor
remains unpaid. Elections for directors need not be
by ballot, except upon demand made by a shareholder at
the election and before the voting begins. Cumulative
voting shall not be allowed. No share shall be voted
at any meeting upon which any installment is due and
unpaid.
5. Written notice of the annual meeting shall
be given to each shareholder entitled to vote thereat,
at least ten (10) days prior to the meeting.
6. In advance of any meeting of shareholders,
the Board of Directors may appoint judges of election,
who need not be shareholders, to act at such meeting
or any adjournment thereof. If judges of election be
not so appointed, the chairman of any such meeting
may, and on the request of any shareholder or his
proxy shall, make such appointment at the meeting.
The number of judges shall be one or three. If
appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares
present and entitled to vote shall determine whether
one or three judges are to be appointed. On request
of the chairman of the meeting, or of any shareholder
or his proxy, the judges shall make a report in
writing of any challenge or question or matter
determined by them, and execute a certificate of any
fact found by them. No person who is a candidate for
office shall act as a judge.
7. Special meetings of the shareholders may be
called at any time by the President, or the Board of
Directors, or shareholders entitled to cast at least
one-tenth of the votes which all shareholders are
entitled to cast at the particular meeting. At any
time, upon written request of any person or persons
who have duly called a special meeting, it shall be
the duty of the Secretary to fix the date of the
meeting, to be held not more than sixty days after the
receipt of the request, and to give due notice
thereof. If the Secretary shall neglect or refuse to
fix the date of the meeting and give notice thereof,
the person or persons calling the meeting may do so.
8. Business transacted at all special meetings
shall be confined to the objects stated in the call
and matters germane thereto, unless all shareholders
entitled to vote are present and consent.
9. Written notice of a special meeting of
shareholders stating the time and place and object
thereof, shall be given to each shareholder entitled
to vote thereat at least ten (10) days before such
meeting, unless a greater period of notice is required
by statute in a particular case.
10. The officer or agent having charge of the
transfer books shall make at least ten days before
each meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting, arranged
in alphabetical order, with the address of and the
number of shares held by each, which list shall be
subject to inspection by any shareholder, at any time
during usual business hours. Such list shall also be
produced and kept open at the time and place of the
meeting, and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate
thereof kept in this state, shall be prima facie
evidence as to who are the shareholders entitled to
examine such list or share ledger or transfer book, or
to vote in person or by proxy, at any meeting of
shareholders.
ARTICLE IV - DIRECTORS
1. The business of this corporation shall be
managed by its Board of Directors, which shall
initially be composed of a sole member, but which may
be increased up to eleven members. The directors need
not be residents of this state or shareholders in the
corporation. They shall be elected by the
shareholders, at the annual meeting of shareholders of
the corporation, and each director shall be elected
for the term of one year and until his successor shall
be elected and shall qualify. Whenever there are
three or more shareholders, there must be at least
three directors. The number of directors may be
increased or decreased within the limits set forth
hereinabove by majority vote of the Board of
Directors. In the event that a vacancy occurs on the
Board of Directors, the remaining directors may fill
that vacancy by appointing by majority vote a
replacement director who shall serve until his
successor is elected and qualified.
2. In addition to the powers and authorities
by these ByLaws expressly conferred upon them, the
Board may exercise all
such powers of the corporation and do all such lawful
acts and things as are not by statute or by the
Articles or by these ByLaws directed or required to be
exercised or done by the shareholders.
3. The meetings of the Board of Directors may be
held at
such place within this state, or elsewhere, as a
majority of the directors may from time to time
appoint, or as may be designated in the notice calling
the meeting.
4. Each newly elected Board may meet at either
such place and time as shall be fixed by the
shareholders at the meeting at which such directors
are elected and no notice shall be necessary to the
newly elected directors in order legally to constitute
the meeting, or they may meet at such place, and time
as may be fixed by the consent of a majority of the
Board of directors.
5. Regular meetings of the Board shall be held
without notice on the second Saturday in February of
each year at 10:30 a.m. at the registered office of
the corporation, or at such other time and place as
shall be determined by the Board.
6. Special meetings of the Board may be called
by the President on five days notice to each director,
either personally or by mail or by telegram; special
meetings shall be called by the President or Secretary
in like manner and on like notice on the written
request of a majority of the directors in office.
7. A majority of the directors in office shall
be necessary to constitute a quorum for the
transaction of business, and
the Acts of a majority of the directors present at a
meeting at which a quorum is present shall be the acts
of the Board of Directors. Any action which may be
taken at a meeting of the directors may be taken
without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by
all of the directors and shall be filed with the
Secretary of the corporation..
8. Directors as such, shall receive such
compensation for their services as, by resolution of
the Board, shall be set from time to time, PROVIDED,
that nothing herein contained shall be construed to
preclude any director from serving the corporation in
any other capacity and receiving compensation
therefor.
ARTICLE V - OFFICERS
1. The executive officers of the corporation
shall be chosen by the directors and shall be a
President, Secretary and Treasurer. The Board of
Directors may also choose a Vice President and such
other officers and agents as it shall deem necessary,
who shall hold their offices for such terms and shall
have such authority and shall perform such duties as
from time to time shall be prescribed by the Board.
Any number of offices may be held by the same person.
It shall not be necessary for the officers to be
directors.
2. The salaries of all officers and agents of
the corporation shall be fixed by the Board of
Directors.
3. The officers of the corporation shall hold
office for one year and until their successors are
chosen and have qualified. Any officer or agent
elected or appointed by the Board of Directors may be
removed by the Board oi Directors whenever in its
judgment the best interests of the corporation will be
served thereby.
4. The President shall be the chief executive
officer of the corporation; he shall preside at all
meetings of the shareholders and directors; he shall
have general and active management of the business of
the corporation, shall see that all orders and
resolutions of the Board are carried into effect,
subject, however, to the right of the directors to
delegate any specific powers, except such as may be by
statute exclusively conferred on the President, to any
other officer or officers of the corporation. He
shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation.
He shall be EX-OFFICIO a member of all committees, and
shall have the general powers and duties of
supervision and management usually vested in the
office of President of a corporation.
5. The Secretary shall attend all sessions of
the Board and all meetings of the shareholders and act
as clerk thereof, and record all the votes of the
corporation and the minutes of all its transactions in
a book to be kept for that purpose; and shall perform
like duties for all committees of the Board of
Directors when required. He shall give, or cause to
be given, notice of all meetings of the shareholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of
Directors or President, and under whose supervision he
shall be. He shall keep in safe custody the corporate
seal of the corporation, and when authorized by the
Board, affix the same to any instrument requiring it.
6. The Treasurer shall have custody of the
corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in
books belonging to the corporation, and shall keep the
moneys of the corporation in a separate account to the
credit of the corporation. He shall disburse the
funds of the corporation as may be ordered by the
Board, taking proper vouchers for such disbursements,
and shall render to the President and directors, at
the regular meetings of the Board, or whenever they
may require it, an account of all his transactions as
Treasurer and of the financial condition of the
corporation.
ARTICLE VI VACANCIES
1. If the office of any officer or agent, one
or more, becomes vacant for any reason, the Board of
Directors may choose a successor or successors, who
shall hold office for the unexpired term in respect of
which such vacancy occurred.
2. Vacancies in the Board of Directors,
including vacancies resulting from an increase in the
number of directors, shall be filled by a majority of
the remaining members of the Board though less than a
quorum, and each person so elected shall be a director
until his successor is elected by the shareholders,
who may make such election at the next annual meeting
of the shareholders or at any special meeting duly
called for that purpose and held prior thereto.
ARTICLE VII INDEMNIFICATION OF DIRECTORS
AND OFFICERS
1. Every person who is or was a director,
officer, employee or agent of the Corporation, or of
any corporation which he has served as such at the
request of the Corporation, shall be indemnified by
the Corporation to the fullest extent permitted by law
against all expenses and liabilities reasonably
incurred by or imposed upon him, in connection with
any proceeding to which he may be made, or threatened
to be made, a party, or in which he may become
involved by reason of his being or having been a
director, officer, employee or agent of the
Corporation, or such other corporation, at the time
the expense or liabilities are incurred.
ARTICLE VIII CORPORATE RECORDS
1. There shall be kept at the registered office
or prin-
cipal place of business of the corporation an,
original or dupli-
cate record of the proceedings of the shareholders and
of the directors, and the original or a copy of its
By-Laws, including
all amendments or alterations thereto to date,
certified by the Secretary of the corporation. An
original or duplicate share register shall also be
kept at the registered office or principal place of
business or at the office of a transfer agent or
registrar, giving the names of the shareholders, their
respective addresses and the number and classes of
shares held by each.
2. Every shareholder shall, upon written
demand under oath stating the purpose thereof, have a
right to examine, in person or by agent or attorney,
during the usual hours for business for any proper
purpose, the share register, books or records of
account, and records of the proceedings of the
shareholders and directors, and make copies or
extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest
as a shareholder. In every instance where an attorney
or other agent shall be the person who seeks the right
to inspection, the demand under oath shall be
accompanied by a power of attorney or such other
writing which authorizes the attorney or other agent
to so act on behalf of the shareholder. The demand
under oath shall be directed to the corporation at or
at its principal place of business.
ARTICLE IX - SHARE CERTIFICATES, DIVIDENDS, ETC.
1. The share certificates of the corporation
shall be numbered and registered in the share ledger
and transfer books of the corporation as they are
issued. They shall bear the corporate seal and shall
be signed by the President and Secretary.
2. Transfers of shares shall be made on the
books of the corporation upon surrender of the
certificates therefor, endorsed by the person named in
the certificate or by attorney, lawfully constituted
in writing. No transfer shall be made which is
inconsistent with law.
3. The Board of Directors may fix a time, not
more than fifty days, prior to the date of any meeting
of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date for the
allotment of rights, or the date when any change or
conversion or exchange of shares will be made or go
into effect, as a record date for the determination of
the shareholders entitled to notice of, or to vote at,
any such meeting, or entitled to receive payment of
any such dividend or distribution, or to receive any
such allotment of rights, or to exercise the rights in
respect to any such change, conversion, or exchange of
shares. In such case, only such shareholders as shall
be shareholders of record on the date so fixed shall
be entitled to notice of, or to vote at, such meeting
or to receive payment of such dividend, or to receive
such allotment of rights, or, to exercise such rights,
as the case may be, notwithstanding any transfer of
any shares on the books of the corporation after any
record date fixed as aforesaid. The Board of
Directors may close the books of the corporation
against transfers of shares during the whole or any
part of such period, and in such case, written or
printed notice thereof shall be mailed at least ten
days before the closing thereof to each shareholder of
record at the address appearing on the records of the
corporation or supplied by him to the corporation for
the purpose of notice. While the stock transfer books
of the corporation are closed, no transfer of shares
shall be made thereon. If no record date is fixed for
the determination of shareholders entitled to receive
notice of, or vote at, a shareholders' meeting,
transferees of shares which are transferred on the
books of the corporation within ten days next
preceding the date of such meeting shall not be
entitled to notice of or to vote at such meeting.
4. In the event that a share certificate shall
be lost, destroyed or mutilated, a new certificate may
be issued therefor upon such terms and indemnity to
the corporation as the Board of Directors may
prescribe.
5. The Board of Directors may declare and pay
dividends upon the outstanding shares of the
corporation, from time to time and to such extent as
they deem advisable, in the manner and upon the terms
and conditions provided by statute and the Articles of
Incorporation.
6. Before payment of any dividend there may be
set aside out of the net profits of the corporation
such sum or sums as the directors, from time to time,
in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose
as the directors shall think conducive to the
interests of the corporation, and the directors may
abolish any such reserve in the manner in which it was
created.
ARTICLE X MISCELLANEOUS PROVISIONS
1. All checks or demands for money and notes of
the corporation shall be signed by such officer or
officers as the Board of Directors may from time to
time designate.
2. The fiscal year shall begin in the first day
of April
each year.
3. Whenever written notice is required to be
given to any person, it may be given to such person,
either personally or by sending a copy thereof through
the mail, or by telegram, charges prepaid, to his
address appearing on the books of the corporation, or
supplied by him to the corporation for the purpose of
notice. If the notice is sent by mail or by
telegraph, it shall be deemed to have been given to
the person entitled thereto when deposited in the
United States mail or with a telegraph office for
transmission to such person. Such notice shall
specify the place, day and hour of the meeting and, in
the case of a special meeting of shareholders, the
general nature of the business, to be transacted.
4. Whenever any written notice is required by
statute, or by the Articles or By-Laws of this
corporation, a waiver thereof in writing, signed by
the person or persons entitled to such notice, whether
before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
Except in the case of a special meeting of
shareholders, neither the business to be transacted at
nor the purpose of the meeting need be specified in
the waiver of notice of such meeting. Attendance of a
person, either in person or by proxy, at any meeting
shall constitute a waiver of notice of such meeting,
except where a person attends a meeting for the
express purpose of objecting to the transaction of any
business because the meeting was not lawfully called
or convened.
5. One or more directors or shareholders may
participate in a meeting of the Board, of a committee
of the Board or of the shareholders, by means of
conference telephone or similar communications
equipment by means of which all persons participating
in the meeting can hear each other.
6. Except as otherwise provided in the
Articles or ByLaws of this corporation, any action
which may be taken at a meeting of the shareholders or
of a class of shareholders may be taken without a
meeting, if a consent or consents in writing, setting
forth the action so taken, shall be signed by all of
the shareholders who would be entitled to vote at a
meeting for such purpose and shall be filed with the
Secretary of the corporation.
7. Any payments made to an officer or employee
of the corporation such as a salary, commission,
bonus, interest, rent, or travel expense incurred by
him, which shall be disallowed in whole or in part as
a deductible expense by the Internal Revenue Service,
shall be reimbursed by such officer or employee to the
corporation to the full extent of such disallowance.
It shall be the duty of the directors, as a Board, to
enforce payment of each such amount disallowed. In
lieu of payment by the officer or employee, subject to
the determination of the directors, proportionate
amounts may be withheld from his future compensation
payments until the amount owed to the corporation has
been recovered.
ARTICLE XI ANNUAL STATEMENT
1. The President and Board of Directors shall
present at
each annual meriting a full and complete statement of
the business and affairs of the corporation for the
preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Detectors
shall deem advisable and need not be verified by a
certified public accountant.
ARTICLE XII AMENDMENTS
1. These By-Laws may be amended or repealed by
the vote of the directors entitled to cast at least a
majority of the votes which all directors are entitled
to cast thereon, at any regular or special meeting of
the directors, duly convened after notice to the
directors of that purpose.
The By-Laws set forth hereinabove were adopted by
the Board of Directors of PPA Technologies, Inc. at
its organizational meeting on August 4, 1994. I
hereby certify that this is a true and exact copy of
said By-Laws.
____________________________
Gerald Sugerman
Corporate Secretary
??
No. __ ________
Shares
PPA TECHNOLOGIES, INC.
Incorporated Under the Laws of the State of New Jersey
10,000,000 SHARES COMMON STOCK
No Par Value Per Share
THIS CERTIFIES THAT __________ is the owner of
______________________________________(_______) shares
of the COMMON STOCK of PPA TECHNOLOGIES, INC., fully
paid and non-assessable, transferable only on the
books of the corporation in person or by Attorney upon
surrender of this Certificate properly endorsed.
The Corporation will furnish to any shareholder, upon
request and without charge, a full statement of the
designations, relative rights, preferences and
limitations of the shares of each class authorized to
be issued.
IN WITNESS WHEREOF, the said corporation has caused
this Certificate to be signed by its duly authorized
officers and its corporate seal to be hereto affixed
this ____ day of ______, 19___.
________________________
_________________________
Secretary President
FOR VALUE RECEIVED, ________ hereby sell, assign and
transfer unto
__________________________________________________(soc
ial security
or other identifying number of
assignee___________________________)
_________________ Shares represented by the within
Certificate, and
do hereby irrevocably appoint
_____________________________________
Attorney to transfer the said Shares on the books of
the within
named Corporation with full powers of substitution in
the premises.
Dated: _______________, 19__
________________________________
In presence of
_______________________________
??
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT MADE UNDER THE SECURITIES ACT
OF 1933 /THE "ACT") OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT.
PPA TECHNOLOGIES, INC.
UNDERWRITER'S WARRANT
PPA Technologies, Inc., a New Jersey
corporation (the "Company"), hereby certifies that,
for an aggregate consideration of $ ,
(" ") is entitled, subject to the terms set
forth below, at any time or from time to time but not
earlier than twelve (12) months nor later than five
(5) years from , 1998 (the "Issue Date"),
to purchase from the Company
, ( ) Units, each such Unit
consisting of one share of Common Stock (no par value)
of the Company and one redeemable common stock
purchase warrant, exercisable into one share of Common
Stock per warrant for a period of one year from the
date of the purchase from the Company of the Unit at
the purchase price per Unit of Seven Dollars ($7.25)
(equal to 120% of the public offering price per Unit)
(the purchase price per unit, as adjusted from time to
time pursuant to the provisions hereunder set forth,
being referred to herein as the "Exercise Price") ,
all as described in the prospectus contained in the
Company's Registration Statement on Form SB-2 (File
No. ) , as amended, which Registration
Statement was originally filed with the Securities and
Exchange Commission on
, 1997 (the "Registration Statement").
The Issue Date shall be the same date as the closing
date of the public offering. Except as set forth
herein, the Units issuable upon exercise of this
Underwriter's Warrant have the same respective terms
as the Units offered by the Registration Statement.
This Underwriter's Warrant and all rights hereunder,
to the extent such rights shall not have been
exercised, shall terminate and become null and void to
the extent the holder fails to exercise any portion of
this Underwriter's Warrant prior to 5:00 p.m., New
Jersey time, on , 2003, or if the Transfer
Agent (as defined in Section 4 below) shall not
regularly be open for business on that day, then on
the next such business day.
1. Registration.
a. The Company agrees for a period of four
years commencing one year after the Issue Date, that
if during such four-year period, no current
registration statement by the Company is on file with
the U.S. Securities and Exchange Commission covering
the securities underlying this Underwriter's Warrant,
upon receipt of a demand for registration in the form
of a written request from the holder of this
Underwriter's Warrant or a majority of the securities
issued or issuable hereunder, it will prepare and file
under the Act one registration statement or
Notification on Form 1-A, if then required, to permit
a public offering of this Underwriter's Warrant and
the securities then underlying this Underwriter's
Warrant, and will use its best efforts to cause such
registration statement or notification to become
effective at the earliest possible date and to remain
effective for a period not to exceed 90 days. The
Company will bear the cost of such registration
statement, including but not limited to counsel fees
of the Company and disbursements, accountants' fees
and printing costs, if any, but excluding the fees of
counsel and others hired by the holder. The foregoing
demand registration right by the Underwriter at the
expense of the Company shall be on a one-time request
basis only.
b. Additionally, whenever during the four-year
period commencing one year after the Issue Date the
Company or any successor proposes to file a
Notification on Form 1-A under the Act or a
registration statement relating to a public offering
of its equity securities under the Act (whether for
its own benefit or for the holders of any of its
equity securities or otherwise), but not including a
registration on Form S-8, it shall offer, upon 30
days' written notice to the holder of this
Underwriter's Warrant or the holders of the underlying
securities (the "Holders"), to include and shall
include, at the Holders' option(s), all or any portion
of this Underwriter's Warrant and the securities
underlying this Underwriter's Warrant in such
registration statement at the expense of the Company,
limited in the case of a Regulation A Offering to the
amount of the available exemption.
c. In connection with any registration
statement or Notification on Form 1-A pursuant to
subsection a or b of this Section 1, the Company
agrees that it will furnish to you the representations
and warranties and opinions of counsel to the same
effect as provided in Sections 1 and 5(b) of the
Underwriting Agreement entered into by the parties
hereto on , 1997 (the "Underwriting
Agreement"), to the extent then applicable, except
that such representations, warranties, and opinions
shall relate to the registration statement or
Notification on Form 1-A and to the securities which
shall be offered thereby. The Company and you further
agree that as to such registration statement or
Notification on Form 1-A, the provisions of Section 3
(but not including subsections (l), (m) or (n)) of the
Underwriting Agreement, shall apply. The Company and
you further agree that the provisions of section 8 of
the Underwriting Agreement shall apply, with the
holder having the rights and obligations afforded the
Underwriter in that section, and that such section
shall apply with respect to that offering.
2. Exercise of Warrant.
a. This Underwriter's Warrant may be exercised
in full or from time to time in part by the Holder by
surrendering it, with the form of subscription at the
end hereof duly executed by such holder, to the
Company's transfer agent accompanied by payment in
full, in cash or by certified or official bank check,
of the Exercise Price payable in respect of all or
part of this Underwriter's Warrant being exercised.
b. Upon such surrender of this Underwriter's
Warrant and payment of such Exercise Price, the
Company shall issue and cause to be delivered to or
upon the written order of the holder of this
Underwriter's Warrant and in such name or names as the
Holder may designate a certificate or certificates for
the number of full Units so purchased, together with
cash, as provided in Section 3 hereof, in respect of
any fractional Units otherwise issuable upon such
surrender. Such certificate or certificates shall be
deemed to have been issued and any person so
designated to be named therein shall be deemed to have
become a Holder of record of such Units as of the date
of surrender of this Underwriter's Warrant and payment
of such Exercise Price notwithstanding that the
certificate or certificates representing such Units
shall not actually have been delivered or that the
stock transfer books of the Company shall then be
closed.
c. If less than the entire Underwriter's
Warrant is exercised, the company shall, upon such
exercise, execute and deliver to the holder thereof a
new warrant in the same form as this Underwriter's
Warrant evidencing that Underwriter's Warrant to the
extent not exercised.
d. The Company shall, at the time of any
exercise of all or part of this Underwriter's Warrant,
upon the request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such
holder any rights to which such Holders shall continue
to be entitled after such exercise in accordance with
the provisions of this Underwriter's Warrant, provided
that if the holder of this Underwriter's Warrant shall
fail to make any such request, such failure shall not
affect the continuing obligations of the Company to
afford to such Holder any such rights.
3. Fractional units. No fractional securities or
scrip representing fractional securities shall be
issued upon the exercise of this Underwriter's
Warrant. With respect to any fraction of a Unit
called upon any such exercise hereof, the Company
shall pay to the holder an amount in cash equal to
such fraction multiplied by the current market value
of such fractional securities, determined as follows:
a. If the security is listed on a national
securities exchange or admitted to unlisted trading
privileges on such exchange, the current value shall
be the last reported sale price of the security on
such exchange on the last business day prior to the
date of exercise of this Underwriter's Warrant, or if
no such sale is made on such day, the average closing
bid and asked prices for such day on such exchange; or
b. If the security is not listed or admitted to
unlisted trading privileges, the current value shall
be the last reported sale price or the mean of the
last reported bid and asked prices reported by the
National Association of Securities Dealers Automated
Quotation System (or, if not so quoted on NASDAQ, by
the National Quotation Bureau, Inc.) on the last
business day prior to the date of the exercise of this
Underwriter's Warrant; or
c. If the security is not so listed or admitted
to unlisted trading privileges and prices are not
reported on NASDAQ, the current value shall be an
amount, not less than the book value, determined in
such reasonable manner as may be prescribed by the
Board of Directors of the Company.
4. Exchange, Assignment, or Loss of Warrant.
a. This Underwriter's Warrant is exchangeable,
without expense, at the option of the Holder, upon
presentation and surrender hereof to the transfer
agent for other Underwriter's Warrants of different
denominations entitling the Holder thereof to purchase
in the aggregate the same number of securities
purchased hereunder. This Underwriter's Warrant is
restricted from sale, transfer, assignment, or
hypothecation except to the officers, principals and
successors of Kenneth Jerome & Co., Inc., and may be
exercised in whole or in part at any time and from
time to time during the four (4) year period following
the expiration of one (1) year from the Issue Date.
Any such assignment shall be made by surrender of this
Underwriter's Warrant to American Stock Transfer and
Registrar Co., Inc. or any successor transfer agent
designated by the Company in writing (the "Transfer
Agent") with the Form of Assignment annexed hereto
duly executed and funds sufficient to pay any transfer
tax, whereupon the Transfer Agent shall, without
charge, cause to be executed and delivered a new
Underwriter's Warrant in the name of the assignee
named in such instrument or assignment and this
Underwriter's Warrant shall promptly be canceled.
This Underwriter's Warrant may be divided or combined
with other Underwriter's Warrants that carry the same
rights upon presentation hereof to the office of the
Transfer Agent together with a written notice
specifying the name and denomination in which new
Underwriter's Warrants are to be issued and signed by
the holder hereof. The term "Underwriter's Warrant"
as used in this Warrant includes any Underwriter's
Warrants issued in substitution for or replacement of
this Underwriter's Warrant, or into which this
Underwriter's Warrant may be divided or exchanged.
b. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or
mutilation of this Underwriter's Warrant, and, in the
case of loss, theft or destruction of reasonably
satisfactory indemnification, and upon surrender and
cancellation of this Underwriter's Warrant, if
mutilated, the Transfer Agent will cause to be
executed and delivered a new Underwriter's Warrant of
like tenor and date. Any such new Underwriter's
Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the
Company, whether or not this Underwriter's Warrant so
lost, stolen, destroyed, or mutilate
5. Rights of the Holder. The Holder of this
Underwriter's Warrant shall not, by virtue hereof, be
entitled to any rights of a stockholder in the
Company, either at law or equity, and the rights of
the holder are limited to those expressed in this
Underwriter's Warrant.
6. Adjustments.
a. In case the Company shall, while this
Underwriter's Warrant remains in force, effect a
recapitalization of such character that the securities
covered hereby shall be changed into or become
exchangeable for a larger or smaller number of such
securities, then thereafter, the number of securities
of the Company which the holder of this Underwriter's
Warrant shall be entitled to purchase hereunder, shall
be increased or decreased, as the case may be, in
direct proportion to the increase or decrease in the
number of shares of the Company, by reason of such
recapitalization, and the purchase price hereunder,
per Unit, shall in the case of an increase in the
number of shares be proportionately reduced, and in
the case of a decrease in the number of share be
proportionately increased.
b. In case the Company shall, at any time prior
to the
exercise of an Underwriter's Warrant, consolidate or
merge with, or shall transfer its property as an
entirety to, or substantially as
an entirety to, any other corporation, the Holder of
an Underwriter's Warrant who thereafter exercises the
same as herein
provided shall be entitled to receive, for the
purchase price per Unit stated in this Underwriter's
Warrant, that number of shares or other securities or
property of the corporation resulting from such
consolidation or merger or transfer to which each Unit
deliverable upon exercise of this Underwriter's
Warrant would have been entitled, upon such
consolidation or merger or transfer, had the holder of
such Underwriter's Warrant exercised his right to
purchase Units, and had such holder exercised the
redeemable common stock purchase warrant comprising a
part of the Unit, and had said shares or other
securities been issued and outstanding, and had such
holder been the holder of record of such shares or
other securities at the time of such consolidation or
merger or transfer.
c. In case the Company shall at any time prior to
the exercise of an Underwriter's Warrant make any
distribution of its assets to holders of its Common
Stock by liquidating or partial liquidating dividend
or by way of return of capital, or other than as a
dividend payable out of earnings or any surplus
legally available for dividends under the laws of the
State of New Jersey, then the Holder of an
Underwriter's Warrant who thereafter exercises the
same as herein provided and the redeemable common
stock purchase warrant comprising a part of the Unit
as therein provided after the date of record for the
determination of those Holders of Common Stock
entitled to such distribution of assets, shall be
entitled to receive for the purchase price, in
addition to each Share, the amount of such assets (or
at the option of the Company a sum equal to the value
thereof at the time of such distribution to holders of
Common Stock as such value is determined by the Board
of Directors of the Company in good faith) which would
have been payable to such Holder had he been the
holder of record of such share receivable upon
exercise of such Underwriter's Warrant and redeemable
common stock purchase warrant on the record date for
the determination of those entitled to such
distribution.
d. In case of the dissolution, liquidation or
winding-up of the Company, all rights under this
Underwriter's Warrant and the redeemable common stock
purchase warrants shall terminate on a date fixed by
the Company, such date so fixed to be not earlier than
the date of the commencement of the proceedings for
such dissolution, liquidation or winding-up and not
later than thirty days after such commencement date.
In any such case of termination of purchase rights the
Company shall give notice of such termination date to
the registered holder of this Underwriter's Warrant.
e. Upon any adjustment of the purchase price
and/or any increase or decrease in the number of
securities purchasable upon the exercise of this
Underwriters Warrant or the redeemable common stock
purchase warrant comprising a part of the Unit, then,
and in each case, the company, within 30 days
thereafter, shall give written notice thereof to the
registered holder of this Underwriter's Warrant, which
notice shall state the adjusted purchase price and/or
the increased or decreased number of securities
purchasable upon the exercise of this Underwriter's
Warrant or the redeemable common stock purchase
warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such
calculation is based.
7. Notices of Record Dates, Etc. Upon the
occurrence of any of the events listed in subsections
a to c below, the Company shall mail or cause to be
mailed (on the same date as the company informs its
stockholders of such event) to the Holder of this
Underwriter's Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or
right and stating the amount and character of such
dividend, distribution or right, or (ii) the date on
which a record is to be taken for the purpose of
voting on or approving such reorganization,
recapitalization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or
winding up and the date on which such event is to take
place and the time, if any is to be fixed, as of which
the holder of record of Common Stock (or any other
securities at the time deliverable on exercise of this
Underwriter's Warrant) shall be entitled to exchange
its shares of Common Stock (or such other securities)
for securities or other property deliverable on such
reorganization, recapitalization, reclassification,
consolidation, merger, conveyance, dissolution,
liquidation or winding up.
a. The Company shall fix a record date of the
holders of Common Stock (or other securities at the
time deliverable on exercise of this Underwriter's
Warrant) for the purpose of entitling or enabling them
to receive any dividends or other distribution, or to
receive any right to subscribe for or purchase any
shares of any class or any securities, or to receive
any other right contemplated by section 6 or
otherwise; or
b. Any reorganization or recapitalization of
the Company, any reclassification of the Capital stock
of the Company, any consolidation or merger of the
Company with or into another corporation or any
transfer of all or substantially all of the assets of
the Company to another entity; or
c. The voluntary or involuntary dissolution,
liquidation or winding up of the Company.
8. Reservation of the Units and Shares. The
Company shall at all times reserve, and the Transfer
Agent shall be irrevocably authorized and directed at
all times to reserve, for the purpose of issuance on
exercise of this Underwriter's Warrant, such number of
authorized Units and authorized shares of Common Stock
or such class or classes of capital stock or other
securities as shall from time to time be sufficient to
comply with this Underwriter's Warrant, and the
Company shall promptly take such corporate action as
may, in the opinion of its counsel, be necessary to
increase its authorized and unissued Units and
authorized and unissued shares of Common Stock or such
other class or classes of capital stock or other
securities to such number as shall be sufficient for
that purpose. The Company shall keep a copy of this
Underwriter's Warrant on file with the Transfer Agent.
The Company shall supply the Transfer Agent with duly
executed stock and other certificates, as appropriate,
for such purpose and shall provide or otherwise make
available any cash which may be payable as provided in
section 3 hereof.
9. Approvals. The Company shall from time to time
use its best efforts to obtain and continue in effect
any and all permits, consents, registrations,
qualifications and approvals of governmental agencies
and authorities and to make all filings under
applicable securities laws that may be or become
necessary in connection with the issuance, sale,
transfer and delivery of this
Underwriter's Warrant and the issuance of securities
on any exercise hereof, and if any such permits,
consent, qualifications, registrations, approvals or
filings are not obtained or continued in effect as
required, the Company shall immediately notify the
holder thereof. Nothing contained in this Section 9
shall in any way expand, alter or limit the rights of
the holder set forth in Section 1 hereof.
10. Survival. All agreements, covenants,
representations and warranties herein shall survive
the execution and delivery of this Underwriter's
Warrant and any investigation at any time made by or
on behalf of any parties hereto and the exercise, sale
and purchase of this Underwriter's Warrant (and any
other securities or property) issuable on exercise
hereof.
11. Remedies. The company agrees that the remedies
at law of the Holder of this Underwriters Warrant, in
the event of any default or threatened default by the
Company in the performance of or compliance with any
of the terms of this Underwriter's Warrant, are not
adequate and such terms may, in addition to and not in
lieu of any other remedy, be specifically enforced by
a decree of specific performance of any agreement
contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Notices. All demands, notices, consents and
other communications to be given hereunder shall be in
writing and shall be deemed duly given when delivered
personally or by telecopier or five days after being
mailed by first class mail, postage prepaid, properly
addressed, if to the holder of this Underwriter's
Warrant, to Kenneth Jerome & Co., Inc., 247 Columbia
Turnpike, Florham Park, New Jersey 07932 (201) 966-
6669 Fax:(201) 966-6319 Attention: Mr. Robert Kaplon,
with a copy to Steven I. Gutstein, Esq., 276 Fifth
Avenue, New York, New York 10001 (212) 725-7110 Fax:
(212) 725-7527; if to the Company, to PPA
Technologies, Inc., 163 South Street, Hackensack, New
Jersey 07601 Attention: Gerald Sugerman, with a copy
to: Roger Fidler, Esq., 400 Grove Street, Glen Rock,
New Jersey 07452 (201) 457-1221 Fax: (201)457-1331.
The Company and each Holder may change such address at
any time or times by notice hereunder to the other.
13. Amendments; Waivers; Terminations; Governing Law;
Headings. This Underwriter's Warrant and any term
hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by
the party against which enforcement of such change,
waiver, discharge or termination is sought. This
Underwriter's Warrant and any disputes arising
hereunder shall be governed by and construed and
interpreted in accordance with the laws of the State
of New Jersey. The headings in this Underwriter's
Warrant are for convenience of reference only and are
not part of this Underwriter's Warrant.
14. Payment of Taxes. The Company shall pay all
taxes, if any, attributable to the initial issuance of
this Underwriter's Warrant and the Units and the
securities comprising the Units; provided, however,
that the Company shall not be required to pay any tax
which may be payable in respect of any secondary
transfer of this Underwriter's Warrant on the Units.
DATED: , 1997
PPA
TECHNOLOGIES, INC., a
New Jersey
corporation
(CORPORATE SEAL)
By:
President
ATTEST:
By:
Corporate Secretary
FORM OF ASSIGNMENT
(To be executed upon transfer of Warrant)
FOR VALUE RECEIVED,
hereby
sells, assigns and transfers to
the within Underwriter's Warrant together with all
rights, title and interest therein, and does hereby
irrevocably constitute and appoint attorney to
transfer such Underwriter's Warrant on the warrant
register of the within named Company, with full power
of substitution.
Signature:
Dated:
Signature
Guarantee:
SUBSCRIPTION
(To be completed and signed only upon an exercise
of
the Underwriter's Warrant in whole or in part)
To:
as Transfer Agent for PPA Technologies, Inc.
The undersigned, the Holder of the attached
Underwriter's Warrant, hereby irrevocably elects to
exercise the purchase right represented by the
Underwriter's Warrant for, and to purchase thereunder,
Units (as such terms are defined in the original
Underwriter's Warrant dated , 1997, from PPA
Technologies, Inc.), and herewith makes payment of $
therefor in cash or by certified or official bank
check. The undersigned hereby requests that the
Certificate(s) for such securities be issued in the
name(s) and delivered to the address(es) as follows:
Name:
Address:
Deliver to:
Address:
(Attach additional sheets as necessary)
If the foregoing Subscription evidences an
exercise of the Underwriter's Warrant to purchase
fewer than all of the Units (or other securities or
property) to which the undersigned is entitled under
such Underwriter's Warrant, please issue a new
Underwriter's Warrant, of like tenor, for the
remaining Units (or other securities or property) in
the name(s), and deliver the same to the address(es),
as follows:
Name:
Address:
(Attach additional sheets as necessary)
DATED:
(Name of
Holder)
(Signature of
Holder or Authorized Signatory)
(Social
Security or Taxpayer Identification Number of Holder)
??
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of _____________, 1997,
(the "Agreement") between PPA TECHNOLOGIES, INC., a
New Jersey corporation (the "Company"), and LIBERTY
TRANSFER COMPANY, INC., the Company's transfer agent
and warrant agent, (the "Warrant Agent"), (the parties
hereto hereinafter collectively referred to as the
"Parties").
WHEREAS, the offering 1,000,000 Units, each Unit
consisting of one share of common stock and one common
stock purchase warrant ("Warrants"), each Warrant
entitling the holder to purchase one Share for a
period of twelve (12) months commencing the closing
date of the offering (the "Final Closing Date") at an
exercise price of $7.00 pursuant to a registration
statement on Form SB-2 (the "Registration Statement")
filed with the Securities and Exchange Commission; and
WHEREAS, the Company desires the Warrant Agent to act
on behalf of the Company, and the Warrant Agent is
willing so to act, in connection with the
registration, transfer, exchange, replacement, and
exercise of the Warrants and the certificates
evidencing the Warrants (the "Warrant Certificates")
and other matters as provided herein;
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the Parties
agree as follows:
1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act
as agent for the Company in accordance with the
instructions set forth hereinafter and the Warrant
Agent accepts that appointment.
2. Form of Warrant Certificates.
The definitive Warrant Certificates to be delivered
pursuant to the Agreement shall be in registered form
only and shall be substantially in the form set forth
in Exhibit A attached.
3. Execution of Warrant Certificates.
The Warrant Certificates in definitive form shall be
signed on behalf of the Company, manually or by
facsimile signature, by its Chairman of the Board or
President, and by its Secretary or an Assistant
Secretary under its corporate seal, and shall be
manually countersigned by the Warrant Agent. Warrant
Certificates signed on behalf of the Company as
aforesaid by an incumbent in office at the time of
signature shall be valid, and may be countersigned and
issued by the Warrant Agent, notwithstanding the fact
that at the time of countersignature and issuance by
the Warrant Agent such signatory shall have ceased to
be the incumbent in such office. The Company's seal
may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced
on the Warrant Certificates. No Warrant Certificate
shall be valid for any purpose unless countersigned
manually by the Warrant Agent. Warrant Certificates
shall be dated as of the date of countersignature by
the Warrant Agent.
4. Registered Owners.
The Company and the Warrant Agent may deem and treat
the registered holder of a Warrant Certificate as the
absolute owner thereof (notwithstanding any notation
of ownership or other writing thereon made by anyone),
for the purpose of any exercise and any distribution
to the holder thereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
5. Registration of Warrants, Transfers and
Exchanges.
The Warrant Certificates shall be numbered and
registered by the Warrant Agent upon the records to be
maintained by it for that purpose. The Warrant Agent
shall register the transfer of any outstanding Warrant
upon surrender of the Warrant Certificate accompanied
(if required) by a written instrument of transfer in
form satisfactory to the Warrant Agent, duly executed
by the registered holder or holders thereof or by the
duly appointed legal representative thereof or by a
duly authorized attorney. Upon any registration of
transfer, a new Warrant Certificate shall be issued to
the transferee and the surrendered Warrant Certificate
shall be canceled by the Warrant Agent. Canceled
Warrant Certificates shall be disposed of in a manner
satisfactory to the Company.
Warrants may be split up, combined or otherwise
exchanged at the holder's option, upon surrender of
the Warrant Certificate to the Warrant Agent at its
office or agency maintained for the purpose of
exchanging, transferring or exercising the Warrant
Certificate at 191 New York Avenue, Huntington, New
York 11743-2711 (such office being referred to herein
as the "Warrant Agency Office") for another Warrant
Certificate or Certificates of like tenor and for the
purchase, in the aggregate, of a like number of
Shares. Warrant Certificates so surrendered shall be
canceled by the Warrant Agent. Canceled Warrant
Certificates shall thereafter be disposed of by the
Warrant Agent in a manner satisfactory to the Company.
The Warrant Agent is hereby authorized to countersign,
in accordance with the provisions of paragraph 3
hereof, and deliver any new Warrant Certificates
required pursuant to the provisions of this paragraph
5.
6. Duration, Extension and Exercise of Warrants.
Each Warrant may be exercised during a period of
twelve months from the Final Closing Date as reflected
on the Prospectus filed as part of the Registration
Statement, unless the exercise period shall be
accelerated or extended as herein provided (such date
or such earlier or later expiration date in the event
of an extension as provided herein being referred to
as the "Expiration Date"). Each Warrant entitles the
registered holder to purchase one Share at an exercise
price of $7.00, unless the Company reduces the
exercise price as herein provided.
The Company has the right to extend the period during
which the Warrants are exercisable or reduce the
exercise price, upon notice of the new expiration date
and/or exercise price to the Warrant Agent and to
Warrantholders. Notice of expiration shall be
effected as detailed in paragraph 19 herein. The
Company shall not be under obligation to extend the
exercise period and gives no assurance that it will do
so. Each Warrant may be exercised on any business day
prior to the close of business on the Expiration Date,
including any extensions thereto.
No fractional Shares shall be issued upon surrender of
a Warrant Certificate. In lieu of fractional Shares,
there shall be paid to the registered holder of a
surrendered Warrant, as soon as practicable after the
date of surrender, an amount in cash equal to a
fraction of the current market value of a Share to
which such Warrant related. As used herein, the
current market value of a Share shall be its closing
price (as determined pursuant to the second sentence
of paragraph 12 (d) hereof) on the last trading day
immediately prior to the day on which that Warrant is
exercised.
Subject to the provisions of the Agreement, the holder
of a Warrant shall have the right, at any time after
issuance of the Warrant and for a period of one year
from the Final Closing Date, to purchase from the
Company (and the Company shall issue and sell to that
holder) the number of fully paid and non-assessable
Shares set forth in the Warrant Certificate, at the
exercise price of $6.75 on any business day until 5:00
p.m. on the Expiration Date (the number of Shares and
Exercise Price being subject to adjustment as provided
in paragraph 12 hereof) upon the surrender of the
Warrant Certificate to the Warrant Agent at the office
of the Warrant Agent, with the form of election to
purchase on the reverse thereof duly filled in and
signed, and payment of the exercise price in lawful
money of the United States of America. The Warrants
shall be exercisable at any time prior to the close of
business on the Expiration Date, at the election of
the registered holder thereof, either as an entirety
or in part. In the event that fewer than all the
Shares purchasable upon the exercise of a Warrant are
purchased at any time prior to the close of business
on the Expiration Date, a new Warrant Certificate will
be issued for the remaining number of Shares
purchasable upon the exercise of the Warrant so
surrendered. No adjustments shall be made for any
cash dividends on Shares issuable on the exercise of a
Warrant. The exercise price (as may be adjusted from
time to time pursuant to the provisions of this
paragraph and paragraph 13) is herein called the
"Exercise Price."
Subject to paragraph 8 hereof, upon surrender of a
Warrant Certificate and receipt of payment of the
Exercise Price, the Warrant Agent shall requisition
from the Transfer Agent for issuance and delivery to
or upon the written order of the registered
Warrantholder and in such name or names as the
registered holder may designate, the Shares issuable
upon exercise. Shares shall be deemed to have been
issued and any person so designated to be named
therein shall be deemed to have become the holder of
record of such Shares as of the date of the surrender
of the Warrant and upon payment of the appropriate
Exercise Price. The Warrant Agent is hereby
authorized to countersign and deliver, in accordance
with the provisions of paragraph 3 hereof, any Warrant
Certificate required pursuant to the provisions of
this paragraph.
7. Separate Transferability.
The Warrant will be separately tradable and
transferable upon issue.
8. Payment of Taxes.
The Company will pay all documentary stamp taxes
attributable to the initial issuance of Shares upon
the exercise of a Warrant prior to the close of
business on the Expiration Date; provided, however,
that the Company shall not be required to pay any tax
or taxes which may be payable in respect of any
transfer involved in the issue of Shares in a name
other than that of the registered holder of the
Warrant, and the Company shall not be required to
issue or deliver such Share Certificates or other
certificates unless or until the person or persons
requesting such issuance shall have paid to the
Company the amount of such tax or shall have
established to the satisfaction of the Company that
such tax has been paid.
9. Redemption of Warrants.
The Warrants shall be subject to redemption by the
Company at .05 per Warrant, upon a minimum of thirty
days' prior written notice of the date on which the
Warrants will be redeemed to the Warrantholders.
During the period after the notice of redemption but
prior to 5 P.M. Eastern time on the date of
redemption, a Warrantholder may exercise or transfer
some or all of his Warrants. Notice of redemption
shall be effected as detailed in paragraph 19 herein.
10. Mutilated or Missing Warrant Certificates.
If a Warrant Certificate shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion
issue, and the Warrant Agent shall countersign and
deliver, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant
Certificate of like tenor and for the purchase of a
like number of Shares, but only upon receipt of
satisfactory indemnity or bond, if requested, and
evidence satisfactory to the Company and the Warrant
Agent of loss, theft or destruction of the Warrant
Certificate. A Warrantholder requesting a substitute
Warrant Certificate shall comply with all other
regulations and pay all other reasonable charges as
the Company or the Warrant Agent may prescribe.
11. Reservation of Shares.
The Company will at all times reserve and keep
available, free from pre-emptive rights, out of its
authorized but unissued Shares, to enable it to
satisfy its obligation to issue Shares upon exercise
of Warrants, through the close of business on the
Expiration Date, the number of Shares deliverable upon
the exercise of all outstanding Warrants, and the
Transfer Agent shall at all times reserve that number
of authorized and unissued Shares as shall be
required. The Company will keep a copy of the
Agreement on file with the Transfer Agent. The
Warrant Agent is hereby irrevocably authorized to
requisition from the Transfer Agent certificates for
Shares issuable upon exercise of Warrants, and the
Company will supply duly executed certificates for
such purpose.
Before taking any action that would cause an
adjustment to paragraph 13 hereof reducing the
Exercise Price below the then par value (if any) of
the Shares issuable upon exercise of the Warrants, the
Company will take any corporate action which may, in
the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid
and non-assessable Shares at the Exercise Price as so
adjusted.
The Company covenants that all Shares issued upon
exercise of the Warrants will, upon issuance in
accordance with the terms of the Agreement, be fully
paid and non-assessable and free from all taxes,
liens, charges and security interests created by the
Company with respect to the issuance thereof.
12. Obtaining of Governmental Approvals and Stock
Exchange Listings.
The Company will take all action which may be
necessary (a) to obtain and keep effective any and all
permits, consents and approvals of governmental
agencies and authorities and to make securities
acts filings under federal and state laws, which may
be or become requisite in connection with the
issuance, sale, transfer, delivery or exercise of the
Warrants, and the issuance, sale, transfer and
delivery of the Shares issuable upon exercise of the
Warrants, and (b) so that such Shares, immediately
upon their issuance upon the exercise of Warrants,
will be listed or entitled to unlisted trading
privileges on each securities exchange, if any, on
which all other Shares are then listed or entitled to
unlisted trading privileges and on an identical basis.
The Company will, as appropriate, furnish the Warrant
Agent with current Prospectuses meeting the
requirements of the Act and all rules and regulations
thereunder in sufficient quantity to permit the
Warrant Agent to deliver a Prospectus (if required by
the Act) to each holder of a Warrant upon the exercise
thereof. The Company agrees to pay all fees, costs
and expenses in connection with the preparation and
delivery to the Warrant Agent of the Prospectuses.
13. Adjustment of Exercise Price and Number of Shares
Purchasable.
The Exercise Price and number of Shares purchasable
upon the exercise of each Warrant are subject to
adjustment upon the occurrence of the events
enumerated in this paragraph 13.
(a) In case the Corporation shall, while this Warrant
remains in force, effect a recapitalization of such
character that the Shares covered hereby shall be
changed into or become exchangeable for a larger or
smaller number of Shares, then thereafter, the number
of Shares of the Corporation which the Holder hereof
shall be entitled to purchase hereunder, shall be
increased or decreased, as the case may be, in direct
proportion to the increase or decrease in the number
of Shares of the Corporation, by reason of such
recapitalization, and the purchase price hereunder,
per Share, of such recapitalized Shares shall in the
case of an increase in the number of Shares be
proportionately reduced, and in the case of a decrease
in the number of Shares be proportionately increased.
(b) In case the Corporation shall, at any time prior
to the exercise of a Warrant, consolidate or merge
with, or shall transfer its property as an entirety
to, or substantially as an entirety to, any other
corporation, the Holder of a Warrant who thereafter
exercises the same as herein provided shall be
entitled to receive, for the purchase price per Share
stated in the Warrant, that number of shares or other
securities or property of the corporation resulting
from such consolidation or merger or transfer to which
each Share deliverable upon exercise of the Warrant
would have been entitled, upon such consolidation or
merger or transfer, had the Holder of such Warrant
exercised his right to purchase and had said Share
been issued and outstanding, and had such Holder been
the holder of record of such Share at the time of such
consolidation or merger or transfer.
(c) In case the Corporation shall at any time prior
to the exercise of a warrant make any distribution of
its assets to holders of its Common Stock by
liquidating or partial liquidating dividend or by way
of return of capital, or other than as a dividend
payable out of earnings or any surplus legally
available for dividends under the laws of the State of
New York, then the Holder of a warrant who thereafter
exercises the same as herein provided after the date
of record for the determination of those holders of
Common Stock entitled to such distribution of assets,
shall be entitled to receive for the purchase price,
in addition to each Share, the amount of such assets
(or at the option of the Corporation a sum equal to
the value thereof at the time of such distribution to
holders of Common Stock as such value is determined by
the Board of Directors of the Corporation in good
faith) which would have been payable to such Holder
had he been the holder of record of such Share
receivable upon exercise of such Warrant on the record
date for the determination of those entitled to such
distribution.
(d) In case of the dissolution, liquidation or
winding-up of the Corporation, all rights under the
Warrants shall terminate on a date fixed by the
Corporation, such date so fixed to be not earlier than
the date of the commencement of the proceedings for
such dissolution, liquidation or winding-up and not
later than thirty days after such commencement date.
In any such case of termination of purchase rights the
Corporation shall give notice of such termination date
to the registered Holder hereof.
14. Notices to Warrantholders.
Upon any adjustment of the Exercise Price pursuant to
paragraph 13 hereof, the Company within 20 calendar
days thereafter shall (i) cause to be filed with the
Warrant Agent a certificate signed by the accounting
officer setting forth the Exercise Price after the
adjustment and setting forth in reasonable detail the
method of calculation and the facts upon which the
calculations are based and setting forth the number of
Shares purchasable upon exercise of a Warrant after
the adjustment in the Exercise Price, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein and (ii)
cause to be given to the registered holders of
outstanding Warrants at their respective addresses
appearing on the Warrant register written notice of
the adjustment by first-class mail, postage prepaid.
Where appropriate, the notice may be given in advance
and included as a part of the notice to be mailed
under the other provisions of this paragraph 14.
Upon the fixing of an Expiration Date other than
pursuant to paragraph 7 hereof, the Company shall
cause written notice by first-class mail, postage
prepaid, of the Expiration Date to be given as soon as
practicable to the Warrant Agent and to the registered
holders of the outstanding Warrants at their
respective addresses appearing on the Warrant
register.
In case:
(a) the Company shall authorize the issuance to all
holders of Shares of rights or warrants to subscribe
for or purchase capital stock of the Company or of any
other subscription rights or warrants; or
(b) the Company shall authorize the
distribution to all holders of Shares of evidences of
its indebtedness or assets (other than cash dividends
or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in
Shares); or
(c) of any consolidation or merger to which the
Company is a party and for which approval of any
stockholders of the Company is required, or of the
conveyance or transfer of the properties and assets of
the Company substantially as an entirety, or of any
capital reorganization or any reclassification of the
Shares (other than a change in par value, or from par
value to no par value, or from no par value to par
value, or as a result of a subdivision or
combination); or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company takes any other action which would
require an adjustment of the Exercise Price pursuant
to paragraph 13 hereof;
then the Company shall cause to be filed with the
Warrant Agent and shall cause to be given to the
registered holders of the outstanding Warrants at
their respective addresses appearing on the Warrant
register, by first-class mail, postage prepaid, a
written notice stating (i) the date as of which the
holders of record of Shares to be entitled to receive
any rights, warrants or distribution are to be
determined or (ii) the date on which any
consolidation, merger, conveyance, transfer,
reorganization, reclassification, dissolution,
liquidation or winding up is expected to become
effective, and the date as of which it is expected
that record Shareholders shall be entitled to exchange
the Shares for securities or other property, if any,
deliverable upon the consolidation, merger,
conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding
up. Such notice shall be filed and mailed in the case
of a notice pursuant to clause (i) above at least 10
calendar days before the record date specified, and,
in the case of a notice pursuant to clause (ii) above,
at least 20 calendar days before the earlier of the
dates specified. The failure to give the notice
required by this paragraph 14 or any defect therein
shall not affect the legality or validity of any
distribution, right, warrant, consolidation, merger,
conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding
up or the vote upon such action.
Nothing contained in the Agreement or in any of the
Warrant Certificates shall be construed as conferring
upon the holders thereof the right to vote or to
consent or to receive notice as Shareholders in
respect of the meetings of Shareholders or the
election of directors of the Company or any other
matter, or any rights whatsoever as Shareholders.
15. Merger, Consolidation or Change of Name of
Warrant Agent.
Any corporation into which the Warrant Agent may be
merged or converted or with which it may be
consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the
Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the
Warrant Agent, shall be the successor to the Warrant
Agent hereunder without the execution of the Parties,
provided that such corporation would be eligible for
appointment as successor Warrant Agent under the
provisions of paragraph 18 hereof. If at the time the
successor to the Warrant Agent shall succeed under the
Agreement, any Warrant Certificates shall have been
countersigned but not delivered, the successor to the
Warrant Agent may adopt the countersignature of the
Warrant Agent; and if at that time any Warrant
Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the Warrant
Agent or in its name, and in all the foregoing cases,
Warrants shall have the full force provided in the
Warrant Certificates and in the Agreement.
In case at any time the name of the Warrant Agent
shall be changed and at such time any of the Warrant
Certificates shall have been countersigned but not
delivered, the Warrant Agent whose name has changed
may adopt the countersignature under its prior name,
and in case at that time any Warrant Certificates
shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in
its prior name or in its changed name, and in all such
cases such Warrants shall have the full force provided
in the Warrants and in the Agreement.
16. Warrant Agent.
The Warrant Agent undertakes the duties and
obligations imposed by the Agreement upon the
following terms and conditions, by all of which the
Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the
Warrant Certificates shall be taken as statements of
the Company and the Warrant Agent assumes no
responsibility for their correctness, except such as
describe the Warrant Agent or action taken or to be
taken by it. The Warrant Agent assumes no
responsibility with respect to the execution, delivery
or distribution of the Warrant Certificates except as
herein otherwise provided.
(b) The Warrant Agent shall not be responsible for
any failure of the Company to comply with any of the
covenants contained herein or in the Warrant
Certificates nor shall it at any time be under any
duty or responsibility to any Warrantholder to make or
cause to be made any adjustment in the Exercise Price
(except as instructed by the Company), or to determine
whether any facts exist which may require any
adjustments, or with respect to the nature or extent
of or method employed in making any adjustments when
made.
(c) The Warrant Agent may consult at any time with
counsel satisfactory to it (who may be counsel for the
Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any
holder of a Warrant in respect of any action taken,
suffered or omitted by it hereunder in good faith and
in accordance with the opinion or the advice of
counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of a
Warrant for any action taken in reliance on any
notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by
the Warrant Agent hereunder, to reimburse the Warrant
Agent upon demand for all expenses, taxes and
governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution
of its duties hereunder, and to indemnify the Warrant
Agent and save it harmless against any and all losses,
liabilities and expenses, including judgments, costs
and counsel fees, for anything done or omitted by the
Warrant Agent arising out of or in connection with the
Agreement except as a result of its negligence or bad
faith.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceedings or to
take any other action likely to involve expense unless
the Company or one or more registered holders of the
Warrants shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and
expenses which may be incurred. All rights of action
under the Agreement or under any of the Warrants may
be enforced by the Warrant Agent without the
possession of any Warrant Certificates or the
production thereof at any trial or other proceeding
relative thereto, and any action, suit or proceeding
instituted by the Warrant Agent shall be brought in
its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the
registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any Shareholder, director,
officer or employee thereof, may buy, sell or deal in
any of the Warrants or other securities of the Company
or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully
and freely as though it were not Warrant Agent under
the Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as
agent for the Company, and its duties shall be
determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything it may
do or refrain from doing in connection with the
Agreement except for its own negligence or bad faith.
(i) The Company will perform, execute, acknowledge
and deliver or cause to be performed, executed,
acknowledged and delivered all further and other acts,
instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or
performing of the provisions of the Agreement.
(j) The Warrant Agent shall not be under any
responsibility in respect of the validity of the
Agreement or the execution and delivery hereof (except
its countersignature thereof); nor shall the Warrant
Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of the Shares to be issued pursuant to the
Agreement or any Warrant or as to whether the Shares
will when issued be validly issued, fully paid and
non-assessable or as to the Exercise Price or the
number of Shares issuable upon exercise of any
Warrant.
(k) The Warrant Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman
of the Board, the President, the Secretary or an
Assistant Secretary of the Company, and to apply to
those officers for advice or instructions in
connection with its duties, and shall not be liable
for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any of
those officers or in good faith reliance upon any
statement signed by any one of those officers of the
Company with respect to any fact or matter (unless
other evidence in respect thereof is
herein.specifically prescribed) which may be deemed to
be conclusively proved and established by such signed
statement.
17. Disposition of Proceeds from Exercise.
The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and
concurrently transfer to the Company all checks
received by the Warrant Agent on the purchase of
Shares through the exercise of Warrants.
18. Change of Warrant Agent.
If the Warrant Agent shall resign (such resignation to
become effective not earlier than thirty days after
the giving of written notice thereof to the Company
and the registered holders of Warrants) or becomes
incapable of acting as Warrant Agent, or upon the
election of the Company which may be made at any time,
the Company shall appoint a successor. If the Company
shall fail to make that appointment within a period of
thirty days after it has been so notified in writing
by the Warrant Agent or by the registered holder of a
Warrant (in the case of incapacity), then the
registered holder of any Warrant may apply to any
court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Pending appointment
of a successor to the Warrant Agent, either by the
Company or by such a court, the duties of the Warrant
Agent shall be carried out by the Company. After
appointment the successor warrant agent shall be
vested with the same powers, rights, duties and
responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the
successor warrant agent any property at the time held
by it hereunder and execute and deliver, at the
expense of the Company, any further assurance,
conveyance, act or deed necessary for the purpose.
Failure to give any notice provided for in this
paragraph 18, however, or any defect therein, shall
not affect the legality or validity or the removal of
the Warrant Agent or the appointment of a successor
warrant agent, as the case may be.
19. Notices to the Company, Warrant Agent and
Warrantholder.
Any notice or demand authorized by the Agreement to be
given or made by the Warrant Agent or by the
registered holder of any Warrant to or on the Company
shall be sufficiently given or made if sent by mail,
first-class or registered, postage prepaid, addressed
(until another address is filed in writing by the
Company with the Warrant Agent) as follows:
PPA TECHNOLOGIES, INC.
163 South St.,
Hackensack, NJ 07601
Should the Company fail to maintain that office or
agency or fail to give notice of the location or of
any change in the location thereof, presentations may
be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to the Agreement to be given
by the Company or by the registered holder of a
Warrant to the Warrant Agent shall be sufficiently
given if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing
by the Warrant Agent with the Company) to the Warrant
Agent as follows:
Liberty Transfer Co., Inc.
191 New York Avenue
Huntington, New York 11743
Any notice or demand authorized by the Agreement
to be given or made by the Warrant Agent or by the
Company to any registered holder of any Warrant shall
be sufficiently given or made if sent by mail, first-
class or registered, postage prepaid, addressed to the
Warrantholder at the address on file with the Warrant
Agent.
20. Supplements and Amendments.
The Company and the Warrant Agent may supplement or
amend the Agreement without the consent or concurrence
of or notice to any holders of Warrants in order to
cure any ambiguity, manifest error or other mistake in
the Agreement, or to make any other provisions in
regard to matters or questions arising hereunder which
the Company and the Warrant Agent may deem necessary
or desirable and which shall not adversely affect,
alter or change the interests of the holders of
Warrants.
21. Successors.
All covenants and provisions the Agreement by or for
the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective
successors and assigns hereunder.
22. Termination.
The Agreement shall terminate at the close of business
ten days after the Expiration Date of the Warrant.
Notwithstanding the foregoing, the Agreement will
terminate on any earlier date if all Warrants have
been exercised. The provisions of paragraph 15 hereof
shall survive that termination.
23. Governing Law.
The Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be
construed in accordance therewith.
24. Benefits of the Agreement.
Nothing herein shall be construed to give to any
person or corporation other than the Company, the
Warrant Agent and the registered holders of Warrants
any legal or equitable right, remedy or claim
hereunder. The Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent
and the registered holders of Warrants.
25. Counterparts.
The Agreement may be executed in any number of
counterparts and each of the counterparts shall for
all purposes be deemed to be an original, and all the
counterparts shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the Parties have caused the
Agreement to be duly executed, as of the day and year
first above written.
PPA TECHNOLOGIES, INC.
By:_________________________
Roger Fidler
President
LIBERTY TRANSFER CO., INC.
By:_________________________
7
EMPLOYMENT AGREEMENT
BETWEEN
PPA TECHNOLOGIES, INC.
AND
GERALD SUGERMAN
AGREEMENT dated this ___ day of May, 1995,
between PPA TECHNOLOGIES, INC., a New Jersey
corporation (hereinafter the "Company") having its
principal place of business at 400 Grove Street, Glen
Rock, New Jersey 07452, and GERALD SUGERMAN
(hereinafter the "Employee").
WHEREAS, the Company desires to acquire the
services of Employee because of his special knowledge
and skills; and,
WHEREAS, Employee desires to be employed by the
Company;
NOW, THEREFORE, in consideration of the
foregoing, ten dollars paid in hand, and other good
and valuable consideration, receipt and sufficiency of
which is hereby acknowledged, the following is agreed:
1. DUTIES.
The Company hereby employs Gerald Sugerman as
Vice President for Scientific Affairs, having powers
and duties in that capacity as set forth from time to
time by the Board of Directors (the "Board") in the
By-Laws of the Company. Employee shall devote his
full time and best efforts to the Business of the
Company. All of Sugerman's business activities shall
be owned by the Company except those set forth in
Exhibit A, attached hereto and incorporated by
reference herein in its entirety.
2. COMPENSATION.
As compensation for his services to the Company,
in whatever capacity rendered, the Company shall pay
to Employee monthly $10,000(US) per month for the rest
of calendar year 1995. This salary shall be paid over
the term of this Agreement which is five years, with
cost of living adjustments being made on the first day
of each calendar year. On a percentage basis this
increase shall be equal to the percentage of increase
in the consumer price index for the New York
Metropolitan Area.
In addition, Employee shall be entitled to the
following: 1) company paid life insurance equal to
twice Employee's annual salary; 2) medical insurance
coverage, including major medical and dental coverages
equivalent to that provided to other key employees of
the Company; 3) such disability coverage as is
maintained on other key employees, and, 4) the Company
will pay Employee at the rate of $0.30 per mile for
Employee's use of his vehicle for Company's business.
Employee shall be entitled to four weeks of
vacation per year, five sick days and three personal
days, all of which shall be accumulated if not taken.
No cash compensation shall be paid for sick or
personal days not taken. Additionally, Employee shall
be entitled to all holidays provided to other key
employees of the Company.
Further, Employee shall receive incentive
compensation in the form of a royalty on net sales,
paid no later than fourteen days after receipt of
payment in good funds, and equal to:
5% of net sales until Employee has received
$350,000;
2% of net sales thereafter.
3. EXPENSES
The Employee may incur reasonable expenses for
promoting the business of the Company, including
expenses for travel, entertainment and similar items.
The Company will reimburse the Employee for all such
expenses upon the presentation by the Employee, from
time to time, of an itemized account justifying such
expenditures. Such reimbursement shall be provided
within 10 working days of such presentation by
Employee. To facilitate Employee's performance the
Company will issue to Employee a company credit card,
when available.
4. INDEBTEDNESS TO EMPLOYEE
Employee and the Company hereby agree and
acknowledge that the only amounts owed to Employee as
at the date of this Agreement are $100,000 for past
unpaid salary and about $47,000 for expenses,
including an approximately $12,000 loan to the
Company.
5. NOTICE
Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and
by registered mail, and mailed to the parties at the
following addresses:
COMPANY: Roger L. Fidler 400 Grove Street
Glen Rock, New Jersey 07452
EMPLOYEE: at his last known residence.
6. RESERVED
7. TERMINATION
This Agreement may be terminated in any one of
the following manners:
1. The death of Employee;
2. The failure of the Company, as evidenced by
filing under the Bankruptcy Act for liquidation, or
the making of an assignment for the benefit of
creditors; or,
3. A material breach of the Assignment and Non-
Disclosure Agreement executed between the Company and
the Employee.
8. APPLICABLE LAW
Except to the extent of that which must be
governed by the General Corporation Law of the State
of New Jersey, this Agreement shall be governed by the
laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
9. BINDING EFFECT
This Agreement shall have binding effect upon the
parties hereto, when approved by the Board, and upon
their respective personal representatives, legal
representatives, successors and assigns. Any waiver
of any breach of this Agreement shall be made in
writing and shall be applicable only to such breach
and shall not be construed to waive any subsequent or
prior breach other than the specific breach so waived.
10. SUPERSEDES EARLIER AGREEMENTS
This Agreement supersedes all earlier agreements
between the Employee and the Company with respect to
Employee's employment by the Company and monies owed
to Employee by the Company.
IN WITNESS WHEREOF, the parties have executed
this Agreement the date first written above.
PPA TECHNOLOGIES,
INC.
_____________________
By:__________________________
Gerald Sugerman Roger L. Fidler,
Director
ASSIGNMENT, NON-COMPETITION AND NON-DISCLOSURE
AGREEMENT
AGREEMENT made this __th day of May, 1995, by and
between PPA TECHNOLOGIES, INC. AND/OR ITS ASSIGNEES
(the "Company") and GERALD SUGERMAN, (the "Recipient"
or "Employee").
WHEREAS, the Company is and has been induced to
deliver to Recipient certain proprietary information,
because of his special skills and knowledge in areas
of importance to the Company; and,
WHEREAS, the Recipient has had and desires to
have access, on a confidential basis, to such
information, and has and will develop through his
employment by OR consultation with the Company certain
additional information which will become the Company's
property; and,
WHEREAS, Recipient has and will come into
possession of, and has and may develop, information
which may be disclosed to and used by the Company in
its business which includes the skills, techniques,
knowledge and information which the consultant will
acquire as a result of his contact with the Company;
and,
WHEREAS, the Recipient desires to maintain and to
continue to maintain the confidentiality of all such
information related to the businesses of the Company
including such prior knowledge as is relevant to the
Company's business and the Company desires to acquire
such information and to place the Recipient in a
position in which he may receive or contribute to the
Company's success;
NOW, THEREFORE, in consideration of the
foregoing, the relationship of the Recipient and the
Company, other benefits conferred upon the Recipient
by virtue of his relationship with the Company, and
other good and valuable consideration, receipt AND
sufficiency of which are hereby acknowledged, the
following is agreed:
1. Disclosure of the Information
Recipient is obligated to maintain absolute
confidentiality with respect to all information which
is not in the public domain, including without
limitation, unique and proprietary information, all
ideas, discoveries, concepts, inventions, devices or
improvements, products, methods of production,
processes,, formulas, techniques, and services,
including information relating to research,
development, inventions, manufacturing, purchasing,
accounting, engineering,marketing, merchandising and
selling, including the Company's proposed and present
business and its products, processes, methods of
production, formulas, and services whether patentable
or not, which has been disclosed to the Recipient,
alone or with others, intentionally or
unintentionally, except as otherwise provided herein.
The Recipient agrees to maintain and make adequate and
current written records of all Information, to the
extent practical, in the form of notes,
sketches, drawings, procedures, laboratory reports or
notebooks relating thereto, which shall be and shall
remain the property of the Company and shall be
available to the Company at all times.
2. Assignment of the Information
a. The Recipient is obligated to assign and agrees
to assign, transfer, convey and deliver to the Company
and hereby does assign, transfer and convey to the
Company, all right, title and interest in and to all
Information required to be disclosed by the Recipient
to the Company under paragraph 1 of this Agreement and
all patents and patent applications (including
continuations, continuations-in-part, divisions,
reissues, renewals and extensions) for all countries
relating to such Information, provided that such
assignment does not apply to any such information
developed by Recipient outside the scope of his
employment. Further, if the Recipient violates the
law or breaches any contract as a result of signing
this agreement or working for the Company the
Recipient will indemnify the Company for any damages
resulting therefrom.
b. At the request of the Company, the Recipient will
assist the Company or any person or persons from time
to time designated by the Company, to obtain the grant
of patents in the United States and/or in such other
country or countries as may be designated by the
Company covering the Information and will in
connection therewith execute such applications,
statements or other documents, furnish such
information and data and take all such other action
(including without limitation, the giving of
testimony) as the Company may from time to time
reasonably request.
3. Non-Disclosure of Information
a. The Recipient will not, without prior
written approval from the Company's Board of
Directors, use, disclose, disseminate, publish or
lecture on any Information.
b. The Recipient will not, without prior
written approval from the Company's Board of
Directors, at any time or manner, make or cause to be
made, any copies, pictures, duplicates, facsimiles or
other reproductions or recordings or any abstracts or
summaries of any laboratory reports, studies,
memoranda, procedures, correspondence, manuals,
customer lists, records, formulas, plans, or other
written, printed or otherwise recorded material of any
kind or of any equipment or facilities belonging to or
in the possession of the Company, which may be
produced or created by or come into the possession of
the Recipient in the course of his employment with the
Company, or which relates in any manner to the present
business of the Company.
4. RESTRICTIVE COVENANTS
(a) During the term of his Employment the
Employee shall devote his best efforts and full time
to advance the interests of the Company.
(b) During the tern of employment, Employee
shall not compete with the Company directly or
indirectly, as a partner, proprietor, stockholder,
officer, director, principal, agent, employee or
consultant, with respect to any person, firm,
corporation or other organization, or engage in any
business which is the same as, similar to, or in
general competition with the business conducted by the
Company, except as provided hereinafter, if at all.
In furtherance of, and without in any way
limiting the contents of this restrictive clause, the
Employee shall not, directly or indirectly, during the
term of his employment with the Company:
(i) request any Company customer to curtail or
cancel their present or future business with the
Company; or
(ii) solicit, canvas or accept, or authorize any
other person to solicit, canvas or accept, from any
past, or present customers of the Company any business
for any other person, firm or corporation engaged in
any business which is the same as, similar to or in
general competition with the business of the Company;
(c) The Employee shall have no right, title or
interest in any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any
abstracts or summaries of any reports, studies,
memoranda, correspondence, manuals, customer lists,
records, formulas, plans or other written, printed or
otherwise recorded material of any kind whatever
related to the business of the Company or any
equipment or facilities belonging to the Company,
which may be produced or created by or come into the
possession of the Employee in the course of his
employment with the Company. The Employee further
agrees that without the prior written consent of the
Company's Board he will not remove or cause to be
removed any such material except personal material
unrelated to the business of the Company from any
premises of the Company, and that he will surrender
all such material to the Company immediately upon the
termination of his employment or at any time prior
thereto upon request of the Company, except material
which is not proprietary or unique or having only
nominal value.
(d) The Employee will promptly disclose and
assign to the Company any and all unique and
proprietary information and improvements, discoveries,
ideas and inventions (whether or not patentable) made
or conceived or possessed by the Employee while
employed by the Company, either alone or in
conjunction with others, whether or not made or
conceived at the request of or upon the suggestion of
the Company, which directly relates to the Company's
business. However, any monies received from
publications, honors or prizes shall be retained by
Employee, his heirs or assigns, provided that such
publications do not violate this Agreement.
(e) The Employee will not, without the prior
written approval of the Board of Directors, which
shall not be unreasonably withheld, directly or
indirectly, use, disseminate, disclose, lecture upon,
or publish articles concerning the company's present
or proposed products or projects, trade practices or
any other unique or proprietary information which
presently exists or is established or developed
hereafter by the Company.
(f) Nothing herein shall be construed in a
manner which limits action taken by Employee in the
normal and proper execution of his duties.
5. Termination of Relationship
a. Upon termination of his relation as Recipient
under this
agreement with the Company, all documents, records,
notebooks and similar repositories containing
Information which constitute part of the Company's
business and which are in Recipient's possession,
whether prepared by him or others, shall be and shall
remain the property of the Company and shall be left
with the Company or turned over to the Company.
b. Upon termination the Recipient shall disclose
all information relevant to the Company's business or
proposed or existing products of the Company but which
may not be described in subsection (a) above.
c. Termination of this relationship shall not
release the Recipient from:
i. any obligation under this Agreement as to
any Information which the Recipient has a duty to
disclose to the Company under paragraph 1 of this
Agreement; and,
ii. any obligation in paragraph 3 of this
Agreement relating to non-disclosure for a period of
two (2) years after termination, for any reason, of
the Recipient's employment with the Company, provided
that the Recipient shall keep confidential all
information unique or proprietary, or which pertains
to product knowledge and trade practices of the
Company, and shall not for a period of 10 years from
termination, directly or indirectly, use, disseminate,
disclose, lecture upon, or publish articles concerning
such confidential information. Except that Employee
shall have no residual obligations to the Company in
the event that termination results from the failure
of the Company to honor its obligations under
Employee's employment agreement.
6. Warranty
The Recipient represents that he has no prior
agreements or obligations which conflict with the
Company's rights under this Agreement.
7. Enforceability
The Recipient acknowledges and accepts the conditions
imposed on his employment by this Agreement and the
Company shall be entitled to preliminary and permanent
injunctive relief as well as an equitable accounting
of all earnings, profits, and other benefits arising
from such violation, which rights shall be cumulative
and in addition to any other rights or remedies to
which the Company may be entitled. In the event that
the Recipient shall disclose any information during
the two (2) year period in which his use of such
information is restricted, the restriction period
shall be extended for a period of time equal to that
period beginning when such violation commenced and
ending when the activities constituting such violation
shall have been finally terminated in good faith. If
the scope of the restrictions contained herein are too
broad to permit enforcement of such restrictions to
the full extent, then such restrictions shall be
enforced to the maximum extent permitted by law and
the Company and Recipient hereby consent and agree
that such scope may be judicially or otherwise
modified accordingly in any forum having jurisdiction
of the subject matter and in any proceeding which may
be brought to enforce such restrictions.
8. Binding Effect
a. This Agreement shall be binding upon and inure to
the benefit of the Company, its affiliates,
subsidiaries, successors and assigns and may not be
changed or modified, or released, discharged,
abandoned or otherwise terminated, in whole or in
part, except by a written instrument signed by the
Board of Directors.
b. This Agreement shall be binding upon the
Recipient, his heirs, executors, administrators,
guardians, or other legal representative, successors
or assigns. Recipient acknowledges receipt of a copy
of this Agreement.
9. Applicable Law
This Agreement shall be governed for all purposes by
the laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
10. Supersedes Earlier Agreements
This Agreement supersedes any and all earlier
agreements made between the Recipient and the Company
relating to the assignment and non-disclosure of such
Information.
11. Subsequent Employment
Notwithstanding any provision in this Contract,
Employee shall
not be prevented upon termination of this Contract
from obtaining employment or conducting business in
the chemical industry, or a similar industry, so long
as proprietary information belonging to the Company is
not divulged or practiced except as allowed by law and
personnel and business are not diverted away from the
Company by the Employee. Thus, Section 5 above
remains in full force and effect, except that the
employment by Employee in the chemical industry will
not operate as an automatic breach of said Section 5.
Employee will however be in breach of such agreement
if he uses knowledge gained from PPA Technologies,
Inc. either before the execution of this Agreement,
or, of course, during the period of his employment
with the Company to assist in any fashion a subsequent
employer or in Employee's own business commenced after
the termination of his employment by the Company.
IN WITNESS WHEREOF, the parties have executed
this Agreement on the date first above written.
PPA TECHNOLOGIES, INC.
BY:__________________________
Roger L. Fidler
President
_____________________________
Gerald Sugerman
EMPLOYMENT AGREEMENT
BETWEEN
PI-TECH, INC.
AND
GERALD SUGERMAN
AGREEMENT dated this ___ day of April, 1993,
between PI-TECH, INC., a Delaware Corporation
(hereinafter the "Company") having its principal place
of business at 1183 West Side Avenue, Jersey City, New
Jersey, and GERALD SUGERMAN (hereinafter the
"Employee").
WHEREAS, the Employee and Pinnacle Technologies,
Inc. have entered into an agreement dated February,
1991, whereby the Company was created and certain
obligations were created; and,
WHEREAS, certain recent developments have induced
the parties hereto to modify, clarify and/or restate
certain terms and conditions of said prior agreement;
NOW, THEREFORE, in consideration of the
foregoing, ten dollars paid in hand, and other good
and valuable consideration, receipt and sufficiency of
which is hereby acknowledged, the following is agreed:
1. DUTIES.
The Company hereby employs Gerald Sugerman as
President having powers and duties in that capacity as
set forth from time to time by the Board of Directors
(the "Board") in the By-Laws of the Company. Employee
shall devote his full time and best efforts to the
Business of the Company. All of Sugerman's business
activities shall be owned by the Company except those
set forth in Exhibit A, attached hereto and
incorporated by reference herein in its entirety.
2. COMPENSATION.
As compensation for his services to the Company,
in whatever capacity rendered, the Company shall pay
to Employee monthly $15,535(US) per month for the rest
of calendar year 1993. This salary shall be paid over
the term of this Agreement which is five years, with
cost of living adjustments being made on the first day
of each calendar year. On a percentage basis this
increase shall be equal to the percentage of increase
in the consumer price index for the New York
Metropolitan Area.
In addition, Employee shall be entitled to the
following: 1) company paid life insurance equal to
twice Employee's annual salary; 2) medical insurance
coverage, including major medical and dental coverages
equivalent to that provided to other key employees of
the Company; 3) such disability coverage as is
maintained on other key employees, and, 4) the Company
will make the lease payments on Employee's presently
leased Jaguar, and upon expiration of that lease will
supply the use of a Company car of equal cost, as well
as pay for car insurance, fuel, oil and maintenance
and the use of a car telephone, if needed.
Employee shall be entitled to four weeks of
vacation per year, five sick days and three personal
days, all of which shall be accumulated if not taken.
No cash compensation shall be paid for sick or
personal days not taken. Additionally, Employee shall
be entitled to all holidays provided to other key
employees of the Company.
Further, Employee shall receive incentive
compensation in the form of a royalty on net sales,
paid no later than fourteen days after receipt of
payment in good funds, and equal to:
1% of the first two million dollars in net sales;
5% of the next five million dollars in net sales;
and,
2% of the next fifty million dollars in net
sales.
3. EXPENSES
The Employee may incur reasonable expenses for
promoting the business of the Company, including
expenses for travel, entertainment and similar items.
The Company will reimburse the Employee for all such
expenses upon the presentation by the Employee, from
time to time, of an itemized account justifying such
expenditures. Such reimbursement shall be provided
within 10 working days of such presentation by
Employee. To facilitate Employee's performance the
Company will issue to Employee a company credit card,
when available.
4. FINANCIAL CONTROLS
Any corporate expenditure, or group of related
expenditures, exceeding two hundred fifty thousand
dollars ($250,000.00), shall require the approval of
the Board's designee and the Employee. Thus, either
party may veto an expenditure. Similarly, no
obligations, contracts, guarantees, funds transfers,
or payment of dividends shall be made, declared or
executed without the approval of the Board and
Employee.
5. NOTICE
Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and
by registered mail, and mailed to the parties at the
following addresses:
COMPANY: at the principal offices of the
Company,
with copies to: Roger L. Fidler 400
Grove Street
Glen Rock, New Jersey 07452
EMPLOYEE: at his last known residence.
6. BOARD OF DIRECTORS
The Board of Directors shall be initially
composed of a designee of Broadwater Developments,
Ltd. and Gerald Sugerman. Thereafter three additional
members shall be appointed to the Board mutually
agreed upon by Broadwater and Employee. In the event
that the Company shall become a publicly traded
company this provision requiring mutual approval of
Board members shall terminate and the provisions of
Delaware corporate law shall apply. Otherwise, during
the term of this Agreement Broadwater, or its
successor in interest, and Employee shall each be
entitled to appoint one member to the Board. Employee
hereby selects himself.
7. TERMINATION
This Agreement may be terminated in any one of
the following manners:
1. The death of Employee;
2. The failure of the Company, as evidenced by
filing under the Bankruptcy Act for liquidation, or
the making of an assignment for the benefit of
creditors; or,
3. A material breach of the Assignment and Non-
Disclosure Agreement executed between the Company and
the Employee.
8. APPLICABLE LAW
Except to the extent of that which must be
governed by the General Corporation Law of the State
of Delaware, this Agreement shall be governed by the
laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
9. BINDING EFFECT
This Agreement shall have binding effect upon the
parties hereto, when approved by the Board, and upon
their respective personal representatives, legal
representatives, successors and assigns. Any waiver
of any breach of this Agreement shall be made in
writing and shall be applicable only to such breach
and shall not be construed to waive any subsequent or
prior breach other than the specific breach so waived.
10. SUPERSEDES EARLIER AGREEMENTS
This Agreement supersedes all earlier agreements
with respect to only those terms which conflict with
said earlier agreements and which were made between
the Employee and the Company or Pinnacle covering the
Employee's employment with the Company.
11. PAYMENTS DUE TO EMPLOYEE
A. For services previously rendered, Employee
shall, in addition to other compensation provided for
herein, shall receive payment as follows:
$50,000 on or before April 15, 1993,
$50,000 on or before May 1, 1993;
B. For Pi-Tech's committment to purchase 20,000
shares of Pinnacle Technologies, Inc. stock from
Employee on or before May 1, 1994, Pi-Tech shall pay
Employee $100,000 on or before May 1, 1994.
C. If any of the above payments are late by more
than five (5) business days, then Employee may
terminate this Agreement.
12. PINNACLE CONSIDERATIONS
a) Sugerman shall assign the patent application
for BETA KETO MIXED ACYLATE MONOMERS to Pi-Tech, Inc.
subject to an exclusive license granting to Pinnacle
Technologies, Inc. rights in the graphic arts and
lithographic ink industry.
b) Nothing contained herein shall prevent
Employee from consulting for Pinnacle in a reasonable
manner in the lithigraphic ink arts, so long as such
arrangement does not materially and substantially
impair the business of the Company. Pi-Tech shall
deduct from Employee's compensation the sum of $825.
per day os such consultation for Pinnacle.
IN WITNESS WHEREOF, the parties have executed
this Agreement the date first written above.
PI-TECH, INC.
_____________________
By:__________________________
Gerald Sugerman Ronald S.
Fisher, Director
ASSIGNMENT, NON-COMPETITION AND NON-DISCLOSURE
AGREEMENT
AGREEMENT made this __th day of April, 1993, by
and between PI-TECH, INC. AND/OR ITS ASSIGNEES (the
"Company") and GERALD SUGERMAN, (the "Recipient" or
"Employee").
WHEREAS, the Company is and has been induced to
deliver to Recipient certain proprietary information,
because of his special skills and knowledge in areas
of importance to the Company; and,
WHEREAS, the Recipient has had and desires to
have access, on a confidential basis, to such
information, and has and will develop through his
employment by OR consultation with the Company certain
additional information which will become the Company's
property; and,
WHEREAS, Recipient has and will come into
possession of, and has and may develop, information
which may be disclosed to and used by the Company in
its business which includes the skills, techniques,
knowledge and information which the consultant will
acquire as a result of his contact with the Company;
and,
WHEREAS, the Recipient desires to maintain and to
continue to maintain the confidentiality of all such
information related to the businesses of the Company
including such prior knowledge as is relevant to the
Company's business and the Company desires to acquire
such information and to place the Recipient in a
position in which he may receive or contribute to the
Company's success;
NOW, THEREFORE, in consideration of the
foregoing, the relationship of the Recipient and the
Company, other benefits conferred upon the Recipient
by virtue of his relationship with the Company, and
other good and valuable consideration, receipt AND
sufficiency of which are hereby acknowledged, the
following is agreed:
1. Disclosure of the Information
Recipient is obligated to maintain absolute
confidentiality with respect to all information which
is not in the public domain, including without
limitation, unique and proprietary information, all
ideas, discoveries, concepts, inventions, devices or
improvements, products, methods of production,
processes,, formulas, techniques, and services,
including information relating to research,
development, inventions, manufacturing, purchasing,
accounting, engineering,marketing, merchandising and
selling, including the Company's proposed and present
business and its products, processes, methods of
production, formulas, and services whether patentable
or not, which has been disclosed to the Recipient,
alone or with others, intentionally or
unintentionally, except as otherwise provided herein.
The Recipient agrees to maintain and make adequate and
current written records of all Information, to the
extent practical, in the form of notes,
sketches, drawings, procedures, laboratory reports or
notebooks relating thereto, which shall be and shall
remain the property of the Company and shall be
available to the Company at all times.
2. Assignment of the Information
a. The Recipient is obligated to assign and agrees
to assign, transfer, convey and deliver to the Company
and hereby does assign, transfer and convey to the
Company, all right, title and interest in and to all
Information required to be disclosed by the Recipient
to the Company under paragraph 1 of this Agreement and
all patents and patent applications (including
continuations, continuations-in-part, divisions,
reissues, renewals and extensions) for all countries
relating to such Information, provided that such
assignment does not apply to any such information
developed by Recipient outside the scope of his
employment. Further, if the Recipient violates the
law or breaches any contract as a result of signing
this agreement or working for the Company the
Recipient will indemnify the Company for any damages
resulting therefrom.
b. At the request of the Company, the Recipient will
assist the Company or any person or persons from time
to time designated by the Company, to obtain the grant
of patents in the United States and/or in such other
country or countries as may be designated by the
Company covering the Information and will in
connection therewith execute such applications,
statements or other documents, furnish such
information and data and take all such other action
(including without limitation, the giving of
testimony) as the Company may from time to time
reasonably request.
3. Non-Disclosure of Information
a. The Recipient will not, without prior
written approval from the Company's Board of
Directors, use, disclose, disseminate, publish or
lecture on any Information.
b. The Recipient will not, without prior
written approval from the Company's Board of
Directors, at any time or manner, make or cause to be
made, any copies, pictures, duplicates, facsimiles or
other reproductions or recordings or any abstracts or
summaries of any laboratory reports, studies,
memoranda, procedures, correspondence, manuals,
customer lists, records, formulas, plans, or other
written, printed or otherwise recorded material of any
kind or of any equipment or facilities belonging to or
in the possession of the Company, which may be
produced or created by or come into the possession of
the Recipient in the course of his employment with the
Company, or which relates in any manner to the present
business of the Company.
4. RESTRICTIVE COVENANTS
(a) During the term of his Employment the
Employee shall devote his best efforts and full time
to advance the interests of the Company.
(b) During the tern of employment, Employee
shall not compete with the Company directly or
indirectly, as a partner, proprietor, stockholder,
officer, director, principal, agent, employee or
consultant, with respect to any person, firm,
corporation or other organization, or engage in any
business which is the same as, similar to, or in
general competition with the business conducted by the
Company, except as provided hereinafter, if at all.
In furtherance of, and without in any way
limiting the contents of this restrictive clause, the
Employee shall not, directly or indirectly, during the
term of his employment with the Company:
(i) request any Company customer to curtail or
cancel their present or future business with the
Company; or
(ii) solicit, canvas or accept, or authorize any
other person to solicit, canvas or accept, from any
past, or present customers of the Company any business
for any other person, firm or corporation engaged in
any business which is the same as, similar to or in
general competition with the business of the Company;
(c) The Employee shall have no right, title or
interest in any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any
abstracts or summaries of any reports, studies,
memoranda, correspondence, manuals, customer lists,
records, formulas, plans or other written, printed or
otherwise recorded material of any kind whatever
related to the business of the Company or any
equipment or facilities belonging to the Company,
which may be produced or created by or come into the
possession of the Employee in the course of his
employment with the Company. The Employee further
agrees that without the prior written consent of the
Company's Board he will not remove or cause to be
removed any such material except personal material
unrelated to the business of the Company from any
premises of the Company, and that he will surrender
all such material to the Company immediately upon the
termination of his employment or at any time prior
thereto upon request of the Company, except material
which is not proprietary or unique or having only
nominal value.
(d) The Employee will promptly disclose and
assign to the Company any and all unique and
proprietary information and improvements, discoveries,
ideas and inventions (whether or not patentable) made
or conceived or possessed by the Employee while
employed by the Company, either alone or in
conjunction with others, whether or not made or
conceived at the request of or upon the suggestion of
the Company, which directly relates to the Company's
business. However, any monies received from
publications, honors or prizes shall be retained by
Employee, his heirs or assigns, provided that such
publications do not violate this Agreement.
(e) The Employee will not, without the prior
written approval of the Board of Directors, which
shall not be unreasonably withheld, directly or
indirectly, use, disseminate, disclose, lecture upon,
or publish articles concerning the company's present
or proposed products or projects, trade practices or
any other unique or proprietary information which
presently exists or is established or developed
hereafter by the Company.
(f) Nothing herein shall be construed in a
manner which limits action taken by Employee in the
normal and proper execution of his duties.
5. Termination of Relationship
a. Upon termination of his relation as Recipient
under this
agreement with the Company, all documents, records,
notebooks and similar repositories containing
Information which constitute part of the Company's
business and which are in Recipient's possession,
whether prepared by him or others, shall be and shall
remain the property of the Company and shall be left
with the Company or turned over to the Company.
b. Upon termination the Recipient shall disclose
all information relevant to the Company's business or
proposed or existing products of the Company but which
may not be described in subsection (a) above.
c. Termination of this relationship shall not
release the Recipient from:
i. any obligation under this Agreement as to
any Information which the Recipient has a duty to
disclose to the Company under paragraph 1 of this
Agreement; and,
ii. any obligation in paragraph 3 of this
Agreement relating to non-disclosure for a period of
two (2) years after termination, for any reason, of
the Recipient's employment with the Company, provided
that the Recipient shall keep confidential all
information unique or proprietary, or which pertains
to product knowledge and trade practices of the
Company, and shall not for a period of 10 years from
termination, directly or indirectly, use, disseminate,
disclose, lecture upon, or publish articles concerning
such confidential information.
6. Warranty
The Recipient represents that he has no prior
agreements or obligations which conflict with the
Company's rights under this Agreement.
7. Enforceability
The Recipient acknowledges and accepts the conditions
imposed on his employment by this Agreement and the
Company shall be entitled to preliminary and permanent
injunctive relief as well as an equitable accounting
of all earnings, profits, and other benefits arising
from such violation, which rights shall be cumulative
and in addition to any other rights or remedies to
which the Company may be entitled. In the event that
the Recipient shall disclose any information during
the two (2) year period in which his use of such
information is restricted, the restriction period
shall be extended for a period of time equal to that
period beginning when such violation commenced and
ending when the activities constituting such violation
shall have been finally terminated in good faith. If
the scope of the restrictions contained herein are too
broad to permit enforcement of such restrictions to
the full extent, then such restrictions shall be
enforced to the maximum extent permitted by law and
the Company and Recipient hereby consent and agree
that such scope may be judicially or otherwise
modified accordingly in any forum having jurisdiction
of the subject matter and in any proceeding which may
be brought to enforce such restrictions.
8. Binding Effect
a. This Agreement shall be binding upon and inure to
the benefit of the Company, its affiliates,
subsidiaries, successors and assigns and may not be
changed or modified, or released, discharged,
abandoned or otherwise terminated, in whole or in
part, except by a written instrument signed by the
Board of Directors.
b. This Agreement shall be binding upon the
Recipient, his heirs, executors, administrators,
guardians, or other legal representative, successors
or assigns. Recipient acknowledges receipt of a copy
of this Agreement.
9. Applicable Law
This Agreement shall be governed for all purposes by
the laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
10. Supersedes Earlier Agreements
This Agreement supersedes any and all earlier
agreements made between the Recipient and the Company
relating to the assignment and non-disclosure of such
Information.
11. Subsequent Employment
Notwithstanding any provision in this Contract,
Employee shall
not be prevented upon termination of this Contract
from obtaining employment or conducting business in
the chemical industry, or a similar industry, so long
as proprietary information belonging to the Company is
not divulged or practiced except as allowed by law and
personnel and business are not diverted away from the
Company by the Employee. Thus, Section 5 above
remains in full force and effect, except that the
employment by Employee in the chemical industry will
not operate as an automatic breach of said Section 5.
Employee will however be in breach of such agreement
if he uses knowledge gained from Pi-Tech, Inc. either
before the execution of this Agreement, or, of course,
during the period of his employment with the Company
to assist in any fashion a subsequent employer or in
Employee's own business commenced after the
termination of his employment by the Company.
12. Consultation with Pinnacle
Since the Company permits Sugerman to consult with
Pinnacle on the Company's behalf, it is understood
that the confidentiality contemplated by this
Agreement will not be enforced vis-a-vis any
information developed by Employee for Pinnacle or
disclosed by Employee to Pinnacle within the proper
scope of that consultation.
IN WITNESS WHEREOF, the parties have executed
this Agreement on the date first above written.
PI-TECH, INC.
BY:__________________________
Ronald S. Fisher
Director
_____________________________
Gerald Sugerman
??
EMPLOYMENT AGREEMENT
BETWEEN
PPA TECHNOLOGIES, INC.
AND
ROGER FIDLER
AGREEMENT dated this ___ day of February, 1996,
between PPA TECHNOLOGIES, INC., a New Jersey
corporation (hereinafter the "Company") having its
principal place of business at 8 Cambridge Drive,
Allendale, N.J. 07401 and Roger L. Fidler residing at
400 Grove Street, Glen Rock, New Jersey 07452
(hereinafter the "Employee").
WHEREAS, the Company desires to acquire the
services of Employee because of his special knowledge
and skills; and,
WHEREAS, Employee desires to be employed by the
Company;
NOW, THEREFORE, in consideration of the
foregoing, ten dollars paid in hand, and other good
and valuable consideration, receipt and sufficiency of
which is hereby acknowledged, the following is agreed:
1. DUTIES.
The Company hereby employs Roger Fidler as
President and Director of Marketing, having powers and
duties in that capacity as set forth from time to time
by the Board of Directors (the "Board") in the By-Laws
of the Company. Employee shall devote such time as
may be needed, in Employee's sole discretion, and best
efforts to the Business of the Company. The Company
recognizes and accepts that Fidler is engaged in the
practice of law and other business ventures which have
and will continue to consume most of his time.
2. COMPENSATION.
As compensation for his services to the Company,
the Company shall pay to Employee the following:
A. Services rendered as President - The Company
shall pay Employee such amount monthly as the Board of
Directors may determine from time to time. Employee
understands that until the Company is either financed
or generates net profits no such compensation will be
paid. Such compensation shall not limit the
commissions payable under Section 2. B. of this
Agreement. However, Employee shall receive the
greater of Section 2.B. compensation or this Section
2.A. compensation.
B. Services for Sales and Marketing - Employee
shall receive commission or incentive compensation in
the form of a percentage of gross sales made by
Employee, paid no later than ten business days after
the date upon which payment in good funds are cleared,
and equal to:
15% of sales of coupling agents, ink and paint
vehicles; and
10% of hard resin sales.
Enviro Ink, Inc. has an exclusive in the province of
Quebec, Canada for ink, and sales for ink cannot be
made in that territory.
Commissions on other products sold through the efforts
of Employee will be negotiated in good faith from time
to time, but shall be based upon the above scale as
modified for differences in the costs of production of
the goods sold. The commissions shall be paid only on
accounts opened by Employee, but said commission shall
be paid for the term of the contract, and for one year
after termination. Commissions shall not be paid on
existing customers for the purchase of products
presently being purchased by them.
C. Benefits - Upon the successful conclusion of
a financing in excess of $500,000 or sales of
$2,000,000 per annum, whichever shall occur first,
Employee shall be entitled to the following: 1)
company paid life insurance equal to twice Employee's
annual salary; 2) medical insurance coverage,
including major medical and dental coverages
equivalent to that provided to other key employees of
the Company; 3) such disability coverage as is
maintained on other key employees, and, 4) the Company
will pay Employee for the use of a vehicle at the rate
of $.30 per mile for miles traveled on Company
business.
3. EXPENSES
Until the Company obatins financing in an amount
exceeding $500,000 no expenses will be reimbursed.
After such financing is obtained or an equal amount of
retained earnings is acheived then expenses will be
paid as set forth herein after for all Company
business excluding those related to commissionable
sales by Employee. The Employee may incur reasonable
expenses for promoting the business of the Company,
including expenses for travel, entertainment and
similar items. The Company will reimburse the
Employee for all such expenses upon the presentation
by the Employee, from time to time, of an itemized
account justifying such expenditures. Such
reimbursement shall be provided within 10 working days
of such presentation by Employee. To facilitate
Employee's performance the Company will issue to
Employee a company credit card, when available.
4. STOCK OPTIONS
[RESERVED]
5. NOTICE
Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and
by registered mail, and mailed to the parties at the
following addresses:
EMPLOYEE: Roger L. Fidler 400 Grove Street
Glen Rock, New Jersey 07452
COMPANY: Gerald Sugerman
8 Cambridge Drive
Allendale, NJ 07401
6. RESERVED
7. TERMINATION
This Agreement may be terminated in any one of
the following manners:
1. The death of Employee;
2. The failure of the Company, as evidenced by
filing under the Bankruptcy Act for liquidation, or
the making of an assignment for the benefit of
creditors; or,
3. A material breach of the Assignment and Non-
Disclosure Agreement executed between the Company and
the Employee.
4. Upon the Employee attaining the Company's
retirement age of not less than 65 years of age.
8. APPLICABLE LAW
Except to the extent of that which must be
governed by the General Corporation Law of the State
of New Jersey, this Agreement shall be governed by the
laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
9. BINDING EFFECT
This Agreement shall have binding effect upon the
parties hereto, when approved by the Board, and upon
their respective personal representatives, legal
representatives, successors and assigns. Any waiver
of any breach of this Agreement shall be made in
writing and shall be applicable only to such breach
and shall not be construed to waive any subsequent or
prior breach other than the specific breach so waived.
10. SUPERSEDES EARLIER AGREEMENTS
This Agreement supersedes all earlier agreements
between the Employee and the Company with respect to
Employee's employment by the Company and monies owed
to Employee by the Company.
IN WITNESS WHEREOF, the parties have executed
this Agreement the date first written above.
PPA TECHNOLOGIES,
INC.
_____________________
By:__________________________
Roger Fidler Gerald Sugerman
Vice President
ASSIGNMENT, NON-COMPETITION AND NON-DISCLOSURE
AGREEMENT
AGREEMENT made this ___ day of February, 1996, by
and between PPA TECHNOLOGIES, INC. AND/OR ITS
ASSIGNEES (the "Company") and ROGER FIDLER, (the
"Recipient" or "Employee").
WHEREAS, the Company is and has been induced to
deliver to Recipient certain proprietary information,
because of his special skills and knowledge in areas
of importance to the Company; and,
WHEREAS, the Recipient has had and desires to
have access, on a confidential basis, to such
information, and has and will develop through his
employment by OR consultation with the Company certain
additional information which will become the Company's
property; and,
WHEREAS, Recipient has and will come into
possession of, and has and may develop, information
which may be disclosed to and used by the Company in
its business which includes the skills, techniques,
knowledge and information which the consultant will
acquire as a result of his contact with the Company;
and,
WHEREAS, the Recipient desires to maintain and to
continue to maintain the confidentiality of all such
information related to the businesses of the Company
including such prior knowledge as is relevant to the
Company's business and the Company desires to acquire
such information and to place the Recipient in a
position in which he may receive or contribute to the
Company's success;
NOW, THEREFORE, in consideration of the
foregoing, the relationship of the Recipient and the
Company, other benefits conferred upon the Recipient
by virtue of his relationship with the Company, and
other good and valuable consideration, receipt AND
sufficiency of which are hereby acknowledged, the
following is agreed:
1. Disclosure of the Information
Recipient is obligated to maintain absolute
confidentiality with respect to all information which
is not in the public domain, including without
limitation, unique and proprietary information, all
ideas, discoveries, concepts, inventions, devices or
improvements, products, methods of production,
processes,, formulas, techniques, and services,
including information relating to research,
development, inventions, manufacturing, purchasing,
accounting, engineering,marketing, merchandising and
selling, including the Company's proposed and present
business and its products, processes, methods of
production, formulas, and services whether patentable
or not, which has been disclosed to the Recipient,
alone or with others, intentionally or
unintentionally, except as otherwise provided herein.
The Recipient agrees to maintain and make adequate and
current written records of all Information, to the
extent practical, in the form of notes,
sketches, drawings, procedures, laboratory reports or
notebooks relating thereto, which shall be and shall
remain the property of the Company and shall be
available to the Company at all times.
2. Assignment of the Information
a. The Recipient is obligated to assign and agrees
to assign, transfer, convey and deliver to the Company
and hereby does assign, transfer and convey to the
Company, all right, title and interest in and to all
Information required to be disclosed by the Recipient
to the Company under paragraph 1 of this Agreement and
all patents and patent applications (including
continuations, continuations-in-part, divisions,
reissues, renewals and extensions) for all countries
relating to such Information, provided that such
assignment does not apply to any such information
developed by Recipient outside the scope of his
employment. Further, if the Recipient violates the
law or breaches any contract as a result of signing
this agreement or working for the Company the
Recipient will indemnify the Company for any damages
resulting therefrom.
b. At the request of the Company, the Recipient will
assist the Company or any person or persons from time
to time designated by the Company, to obtain the grant
of patents in the United States and/or in such other
country or countries as may be designated by the
Company covering the Information and will in
connection therewith execute such applications,
statements or other documents, furnish such
information and data and take all such other action
(including without limitation, the giving of
testimony) as the Company may from time to time
reasonably request.
3. Non-Disclosure of Information
a. The Recipient will not, without prior
written approval from the Company's Board of
Directors, use, disclose, disseminate, publish or
lecture on any Information.
b. The Recipient will not, without prior
written approval from the Company's Board of
Directors, at any time or manner, make or cause to be
made, any copies, pictures, duplicates, facsimiles or
other reproductions or recordings or any abstracts or
summaries of any laboratory reports, studies,
memoranda, procedures, correspondence, manuals,
customer lists, records, formulas, plans, or other
written, printed or otherwise recorded material of any
kind or of any equipment or facilities belonging to or
in the possession of the Company, which may be
produced or created by or come into the possession of
the Recipient in the course of his employment with the
Company, or which relates in any manner to the present
business of the Company.
4. RESTRICTIVE COVENANTS
(a) During the term of his Employment the
Employee shall devote his best efforts and such time
to advance the interests of the Company as required by
his Employment Agreement.
(b) During the tern of employment, Employee
shall not compete with the Company directly or
indirectly, as a partner, proprietor, stockholder,
officer, director, principal, agent, employee or
consultant, with respect to any person, firm,
corporation or other organization, or engage in any
business which is the same as, similar to, or in
general competition with the business conducted by the
Company, except as provided hereinafter, if at all.
In furtherance of, and without in any way
limiting the contents of this restrictive clause, the
Employee shall not, directly or indirectly, during the
term of his employment with the Company:
(i) request any Company customer to curtail or
cancel their present or future business with the
Company; or
(ii) solicit, canvas or accept, or authorize any
other person to solicit, canvas or accept, from any
past, or present customers of the Company any business
for any other person, firm or corporation engaged in
any business which is the same as, similar to or in
general competition with the business of the Company;
(c) The Employee shall have no right, title or
interest in any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any
abstracts or summaries of any reports, studies,
memoranda, correspondence, manuals, customer lists,
records, formulas, plans or other written, printed or
otherwise recorded material of any kind whatever
related to the business of the Company or any
equipment or facilities belonging to the Company,
which may be produced or created by or come into the
possession of the Employee in the course of his
employment with the Company. The Employee further
agrees that without the prior written consent of the
Company's Board he will not remove or cause to be
removed any such material except personal material
unrelated to the business of the Company from any
premises of the Company, and that he will surrender
all such material to the Company immediately upon the
termination of his employment or at any time prior
thereto upon request of the Company, except material
which is not proprietary or unique or having only
nominal value.
(d) The Employee will promptly disclose and
assign to the Company any and all unique and
proprietary information and improvements, discoveries,
ideas and inventions (whether or not patentable) made
or conceived or possessed by the Employee while
employed by the Company, either alone or in
conjunction with others, whether or not made or
conceived at the request of or upon the suggestion of
the Company, which directly relates to the Company's
business. However, any monies received from
publications, honors or prizes shall be retained by
Employee, his heirs or assigns, provided that such
publications do not violate this Agreement.
(e) The Employee will not, without the prior
written approval of the Board of Directors, which
shall not be unreasonably withheld, directly or
indirectly, use, disseminate, disclose, lecture upon,
or publish articles concerning the company's present
or proposed products or projects, trade practices or
any other unique or proprietary information which
presently exists or is established or developed
hereafter by the Company.
(f) Nothing herein shall be construed in a
manner which limits action taken by Employee in the
normal and proper execution of his duties.
5. Termination of Relationship
a. Upon termination of his relation as Recipient
under this
agreement with the Company, all documents, records,
notebooks and similar repositories containing
Information which constitute part of the Company's
business and which are in Recipient's possession,
whether prepared by him or others, shall be and shall
remain the property of the Company and shall be left
with the Company or turned over to the Company.
b. Upon termination the Recipient shall disclose
all information relevant to the Company's business or
proposed or existing products of the Company but which
may not be described in subsection (a) above.
c. Termination of this relationship shall not
release the Recipient from:
i. any obligation under this Agreement as to
any Information which the Recipient has a duty to
disclose to the Company under paragraph 1 of this
Agreement; and,
ii. any obligation in paragraph 3 of this
Agreement relating to non-disclosure for a period of
two (2) years after termination, for any reason, of
the Recipient's employment with the Company, provided
that the Recipient shall keep confidential all
information unique or proprietary, or which pertains
to product knowledge and trade practices of the
Company, and shall not for a period of 10 years from
termination, directly or indirectly, use, disseminate,
disclose, lecture upon, or publish articles concerning
such confidential information. Except that Employee
shall have no residual obligations to the Company in
the event that termination results from the failure
of the Company to honor its obligations under
Employee's employment agreement.
6. Warranty
The Recipient represents that he has no prior
agreements or obligations which conflict with the
Company's rights under this Agreement.
7. Enforceability
The Recipient acknowledges and accepts the conditions
imposed on his employment by this Agreement and the
Company shall be entitled to preliminary and permanent
injunctive relief as well as an equitable accounting
of all earnings, profits, and other benefits arising
from such violation, which rights shall be cumulative
and in addition to any other rights or remedies to
which the Company may be entitled. In the event that
the Recipient shall disclose any information during
the two (2) year period in which his use of such
information is restricted, the restriction period
shall be extended for a period of time equal to that
period beginning when such violation commenced and
ending when the activities constituting such violation
shall have been finally terminated in good faith. If
the scope of the restrictions contained herein are too
broad to permit enforcement of such restrictions to
the full extent, then such restrictions shall be
enforced to the maximum extent permitted by law and
the Company and Recipient hereby consent and agree
that such scope may be judicially or otherwise
modified accordingly in any forum having jurisdiction
of the subject matter and in any proceeding which may
be brought to enforce such restrictions.
8. Binding Effect
a. This Agreement shall be binding upon and inure to
the benefit of the Company, its affiliates,
subsidiaries, successors and assigns and may not be
changed or modified, or released, discharged,
abandoned or otherwise terminated, in whole or in
part, except by a written instrument signed by the
Board of Directors.
b. This Agreement shall be binding upon the
Recipient, his heirs, executors, administrators,
guardians, or other legal representative, successors
or assigns. Recipient acknowledges receipt of a copy
of this Agreement.
9. Applicable Law
This Agreement shall be governed for all purposes by
the laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
10. Supersedes Earlier Agreements
This Agreement supersedes any and all earlier
agreements made between the Recipient and the Company
relating to the assignment and non-disclosure of such
Information.
11. Subsequent and Current Employment
Notwithstanding any provision in this Contract,
Employee shall
not be prevented upon termination of this Contract
from obtaining employment or conducting business in
the chemical industry, or a similar industry, so long
as proprietary information belonging to the Company is
not divulged or practiced except as allowed by law and
personnel and business are not diverted away from the
Company by the Employee. Thus, Section 5 above
remains in full force and effect, except that the
employment by Employee in the chemical industry will
not operate as an automatic breach of said Section 5.
Employee will however be in breach of such agreement
if he uses knowledge gained from PPA Technologies,
Inc. either before the execution of this Agreement,
or, of course, during the period of his employment
with the Company to assist in any fashion a subsequent
employer or in Employee's own business commenced after
the termination of his employment by the Company.
Employee is also not bound by any term of this
Agreement which would cause a conflict with any
obligation which the Employee's present occupation
and/or other businesses do or would in the future
impose upon him.
IN WITNESS WHEREOF, the parties have executed
this Agreement on the date first above written.
PPA TECHNOLOGIES, INC.
BY:__________________________
Gerald Sugerman
Vice President
_____________________________
Roger Fidler
EMPLOYMENT AGREEMENT
BETWEEN
PPA TECHNOLOGIES, INC.
AND
ROGER FIDLER
AGREEMENT dated this ___ day of May, 1996,
between PPA TECHNOLOGIES, INC., a New Jersey
corporation (hereinafter the "Company") having its
principal place of business at 8 Cambridge Drive,
Allendale, N.J. 07401 and Roger L. Fidler residing at
400 Grove Street, Glen Rock, New Jersey 07452
(hereinafter the "Employee").
WHEREAS, the Company desires to acquire the
services of Employee because of his special knowledge
and skills; and,
WHEREAS, Employee desires to be employed by the
Company;
NOW, THEREFORE, in consideration of the
foregoing, ten dollars paid in hand, and other good
and valuable consideration, receipt and sufficiency of
which is hereby acknowledged, the following is agreed:
1. DUTIES.
The Company hereby employs Roger Fidler as
President and Director of Marketing, having powers and
duties in that capacity as set forth from time to time
by the Board of Directors (the "Board") in the By-Laws
of the Company. Employee shall devote such time as
may be needed, in Employee's sole discretion, and best
efforts to the Business of the Company. The Company
recognizes and accepts that Fidler is engaged in the
practice of law and other business ventures which have
and will continue to consume most of his time.
2. COMPENSATION.
As compensation for his services to the Company,
the Company shall pay to Employee the following:
A. Services rendered as President - The Company
shall pay Employee such amount, if any, monthly as the
Board of Directors may determine from time to time.
Employee understands that until the Company is either
financed or generates net profits no such compensation
will be paid.
B. Services for Sales and Marketing - Employee
shall receive commission or incentive compensation in
the form of a percentage of gross sales, paid no later
than ten business days after the date upon which
payment in good funds are cleared, and equal to:
15% of sales of coupling agents, ink and paint
vehicles; and
10% of hard resin sales.
Enviro Ink, Inc. has an exclusive in the province of
Quebec, Canada for ink, and sales for ink cannot be
made in that territory.
Commissions on other products sold through the efforts
of Employee will be negotiated in good faith from time
to time, but shall be based upon the above scale as
modified for differences in the costs of production of
the goods sold. The commissions shall be paid only on
accounts opened by Employee, but said commission shall
be paid for the term of the contract, and for one year
after termination. Commissions shall not be paid on
existing customers for the purchase of products
presently being purchased by them.
C. Benefits - Upon the successful conclusion of
a financing in excess of $500,000 or sales of
$2,000,000 per annum, whichever shall occur first,
Employee shall be entitled to the following: 1)
company paid life insurance equal to twice Employee's
annual salary; 2) medical insurance coverage,
including major medical and dental coverages
equivalent to that provided to other key employees of
the Company; 3) such disability coverage as is
maintained on other key employees, and, 4) the Company
will pay provide Employee with the use of a vehicle.
3. EXPENSES
Until the Company obtains financing in an amount
exceeding $500,000 no expenses will be reimbursed.
After such financing is obtained or an equal amount of
retained earnings is achieved then expenses will be
paid as set forth herein after. The Employee may incur
reasonable expenses for promoting the business of the
Company, including expenses for travel, entertainment
and similar items. The Company will reimburse the
Employee for all such expenses upon the presentation
by the Employee, from time to time, of an itemized
account justifying such expenditures. Such
reimbursement shall be provided within 10 working days
of such presentation by Employee. To facilitate
Employee's performance the Company will issue to
Employee a company credit card, when available.
4. STOCK OPTIONS
[RESERVED]
5. NOTICE
Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and
by registered mail, and mailed to the parties at the
following addresses:
EMPLOYEE: Roger L. Fidler 400 Grove Street
Glen Rock, New Jersey 07452
COMPANY: Gerald Sugerman
8 Cambridge Drive
Allendale, NJ 07401
6. RESERVED
7. TERMINATION
This Agreement may be terminated in any one of
the following manners:
1. The death of Employee;
2. The failure of the Company, as evidenced by
filing under the Bankruptcy Act for liquidation, or
the making of an assignment for the benefit of
creditors; or,
3. A material breach of the Assignment and Non-
Disclosure Agreement executed between the Company and
the Employee.
4. Upon the Employee attaining the Company's
retirement age of not less than 65 years of age.
8. APPLICABLE LAW
Except to the extent of that which must be
governed by the General Corporation Law of the State
of New Jersey, this Agreement shall be governed by the
laws of the State of New Jersey and shall be
enforceable only in the Superior Court of New Jersey
for Bergen County. If any provision of this Agreement
is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise
remain in full force and effect.
9. BINDING EFFECT
This Agreement shall have binding effect upon the
parties hereto, when approved by the Board, and upon
their respective personal representatives, legal
representatives, successors and assigns. Any waiver
of any breach of this Agreement shall be made in
writing and shall be applicable only to such breach
and shall not be construed to waive any subsequent or
prior breach other than the specific breach so waived.
IN WITNESS WHEREOF, the parties have executed
this Agreement the date first written above.
PPA TECHNOLOGIES,
INC.
_____________________
By:__________________________
Roger Fidler Gerald Sugerman
Vice President
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This Lease Agreement, made the 13th day of March 1997,
Landlord
Between: ARCHIE SCHWARTZ CO./ BELL HOLDING CO.
c/o Mandelbaum
residing or located at: 80 Main Street in the Town of
West Orange in the County of Essex and State of New
Jersey, herein designated as the Landlord, and
Tenant
PPA TECHNOLOGIES, INC.. residing or located at #8
Cambridge Drive in the Boro. of Allendale in the
County of Bergen and State of New Jersey, herein
designated as the Tenant;
Witnesseth that, the Landlord does hereby lease to the
Tenant and the Tenant does hereby rent from the
Landlord, the following described premises:
Premises
#163 SOUTH STREET, HACKENSACK, NEW JERSEY
Term
for a term of four (4) years commencing on April 1st
1997, and ending on March 31st, 2001 to be used and
occupied only and for no other purpose than
Use
distribution of environmentally friendly products
which has an ISRA Code number of 5099-42/43. Tenant
agrees to comply with zoning ordinances and other
rules and regulations of the City of Hackensack,
County of Bergen, State of New Jersey.
Upon the following Conditions and Covenants:
Payment of Rent
1st: The Tenant covenants and agrees to pay to the
Landlord, as rent for and during the term hereof, the
sum of See Exhibit "A"-Rent Clause in the following
manner:
Repairs and Care
2nd: The Tenant has examined the premises and has
entered into this lease without any representation on
the part of the Landlord as to the condition thereof.
The Tenant shall take good care of the premises and
shall at the Tenant's own cost and expense, make all
repairs, including painting and decorating, and shall
maintain the premises in good condition and state of
repair, and at the end or other expiration of the term
hereof, shall deliver up the rented premises in good
order and condition, wear and tear from a reasonable
use thereof, and damage by the elements not resulting
from the neglect or fault of the Tenant, excepted. The
Tenant shall neither encumber nor obstruct the
sidewalks, driveways, yards, entrances, hallways and
stairs, but shall keep and maintain the same in a
clean condition, free from debris, trash, refuse, snow
and ice.
Glass, etc. Damage Repairs
3rd: In case of the destruction of or any damage to
the glass in the leased premises, or the destruction
of or damage of any kind whatsoever to the said
premises, caused by the carelessness, negligence or
improper conduct on the part of the Tenant or the
Tenant's agents, employees, guests, licensees,
invitees, subtenants, assignees or successors, the
Tenant shall repair the said damage or replace or
restore any destroyed parts of the premises, as
speedily as possible, at the Tenant's own cost and
expense.
Alterations/Improvements
4th: No alterations, additions or improvements shall
be made, and no climate regulating, air conditioning,
cooling, heating or sprinkler systems, television or
radio antennas, heavy equipment, apparatus and
fixtures, shall be installed in or attached to the
leased premises, without the written consent of the
Landlord. Unless otherwise provided herein, all such
alterations, additions or improvements and systems,
when made, installed in or attached to the said
premises, shall belong to and become the property of
the Landlord and shall be surrendered with the
premises and as part thereof upon the expiration or
sooner termination of this lease, without hindrance,
molestation or injury.
Signs
5th: The Tenant shall not place nor allow to be placed
any signs of any kind whatsoever, upon, in or about
the said premises or any part thereof, except of a
design and structure and in or at such places as may
be indicated and consented to by the Landlord in
writing. In case the Landlord or the Landlord's
agents, employees or representatives shall deem it
necessary to remove any such signs in order to paint
or make any repairs, alterations or improvements in or
upon said premises or any part thereof, they may be so
removed, but shall be replaced at the Landlord's
expense when the said repairs, alterations or
improvements shall have been completed. Any signs
permitted by the Landlord shall at all times conform
with all municipal ordinances or other laws and
regulations applicable thereto.
Utilities
6th: The Tenant shall pay when due all the rents or
charges for water or other utilities used by the
Tenant, which are or may be assessed or imposed upon
the leased premises or which are or may be charged to
the Landlord by the suppliers thereof during the term
hereof, and if not paid, such rents or charges shall
be added to and become payable as additional rent with
the installment of rent next due or within 30 days of
demand therefor, whichever occurs sooner.
Compliance with Laws etc.
7th: The Tenant shall promptly comply with all laws,
ordinances, rules, regulations, requirements and
directives of the Federal, State and Municipal
Governments or Public Authorities and of all their
departments, bureaus and subdivisions, applicable to
and affecting the said premises, their use and
occupancy, for the correction, prevention and
abatement of nuisances, violations or other grievances
in, upon or connected with the said premises, during
the term hereof: and shall promptly comply with all
orders, regulations, requirements and directives of
the Board of Fire Underwriters or similar authority
and of any insurance companies which have issued or
are about to issue policies of insurance covering the
said premises and its contents, for the prevention of
fire or other casualty, damage or injury, at the
Tenant's own cost and expense.
Liability Insurance
8th: The Tenant, at Tenant's own cost and expense,
shall obtain or provide and keep in full force for the
benefit of the Landlord, during the term hereof,
general public liability insurance, insuring the
Landlord against any and all liability or claims of
liability arising out of, occasioned by or resulting
from any accident or otherwise in or about the leased
premises, for injuries to any person or persons, for
limits of not less than $1,000,0000 for injuries to
one person and $1,000,000 for injuries to more than
one person, in any one accident or occurrence, and for
loss or damage to the property of any person or
persons, for not less than $250,000.
Indemnification
The policy or policies of insurance shall be of a
company or companies authorized to do business in this
State and shall be delivered to the Landlord, together
with evidence of the payment of the premiums therefor,
not less than fifteen days prior to the commencement
of the term hereof or of the date when the Tenant
shall enter into possession, whichever occurs sooner.
At least fifteen days prior to the expiration or
termination date of any policy, the Tenant shall
deliver a renewal or replacement policy with proof of
the payment of the premium therefor. The Tenant also
agrees to and shall save, hold and deep harmless and
indemnify the Landlord from and for any and all
payments, expenses, costs, attorney fees and from and
for any and all claims and liability for losses or
damage to property or injuries to persons occasioned
wholly or in part by or resulting form any acts or
omissions by the tenant or the Tenant's agents,
employees, guests, licensees, invites, subtenants,
assignees or successors, or for any cause or reason
whatsoever arising out of or by reason of the
occupancy by the Tenant and the conduct of the
Tenant's business.
Assignment
9th: The Tenant shall not, without the written consent
of the Landlord, assign, mortgage or hypothecate this
lease, nor sublet or sublease the premises or any part
thereof.
Restriction of use
10th: The Tenant shall not occupy or use the leased
premises or any part thereof, nor permit or suffer the
same to be occupied or used for any purposes other
than as herein limited, nor for any purpose deemed
unlawful, disreputable, or extra hazardous, on account
of fire or other casualty.
Mortgage Priority
11th: This lease shall not be a lien against the said
premises in respect to any mortgages that may
hereafter be placed upon said premises. The recording
of such mortgage or mortgages shall have preference
and precedence and be superior and prior in lien to
this lease, irrespective of the date of recording and
the Tenant agrees to execute any instruments, without
cost, which may be deemed necessary or desirable, to
further effect the subordination of this lease to any
such mortgage or mortgages. A refusal by the Tenant to
execute such instruments shall entitle the Landlord to
the option of canceling this lease and the term hereof
expressly limited accordingly.
Condemnation Eminent Domain
12th: If the land and premises leased herein, or of
which the leased premises are a part, or any portion
thereof, shall be taken under eminent domain or
condemnation proceedings, or if suit or other action
shall be instituted for the taking or condemnation
thereof, or if in lieu of any format condemnation
proceedings or actions, the Landlord shall grant an
option to purchase and or shall sell and convey the
said premises or any portion thereof, to the
governmental or other public authority, agency, body
or public utility, seeking to take said land and
premises or any portion thereof, than this lease, at
the option of the Landlord, shall terminate, and the
term hereof shall end as of such date as the Landlord
shall fix by notice in writing; and the Tenant shall
have no claim or right to claim or be entitled to any
portion of any amount which may be awarded as damages
or paid as the result of such condemnation proceedings
or paid as the purchase price for such option, sale or
conveyance in lieu of formal condemnation proceedings;
and all rights of the Tenant to damages, if any, are
hereby assigned to the Landlord. The Tenant agrees to
execute and deliver any instruments, at the expense of
the Landlord, as may be deemed necessary or required
to expedite any condemnation proceedings or to
effectuate a proper transfer of title to such
governmental or other public authority, agency, body
or public utility seeking to take or acquire the said
lands and premises or any portion thereof. The Tenant
covenants and agrees to vacate the said premises,
remove all the Tenant's personal property therefrom
and deliver up peaceable possession thereof to the
Landlord or to such other party designated by the
Landlord in the aforementioned notice. Failure by the
Tenant to comply with any provisions in this clause
shall subject the Tenant to such costs, expenses,
damages and losses as the Landlord may incur by reason
of the Tenant's breach hereof.
Fire and other Casually
13th: In case of fire or other casualty, the Tenant
shall give immediate notice to the Landlord. If the
premises shall be partially damaged by fire, the
elements or other casualty, the Landlord shall repair
the same as speedily as practicable, but the Tenant's
obligation to pay the rent hereunder shall not cease.
If, in the opinion of the Landlord, the premises be so
extensively and substantially damaged as to render
them untenantable, then the rent shall cease until
such time as the premises shall be made tenantable by
the Landlord. However, if, in the opinion of the
Landlord, the premises be totally destroyed or so
extensively and substantially damaged as to require
practically a rebuilding thereof, then the rent shall
be paid up to the time of such destruction and then
from thenceforth this lease shall come to an end. In
no event however, shall the provisions of this clause
become effective or be applicable, if the fire or
other casualty and damage shall be the result of the
carelessness, negligence or improper conduct of the
Tenant or the Tenant's agents, employees, guests,
licensees, invitees, subtenants, assignees or
successors. In such case, the Tenant's liability for
the payment of the rent and the performance of all the
covenants, conditions and terms hereof on the Tenant's
part to be performed shall continue and the Tenant
shall be liable to the Landlord for the damage and
loss suffered by the Landlord. If the Tenant shall
have been insured against any of the risks herein
covered, then the proceeds of such insurance shall be
paid over to the Landlord to the extent of the
Landlord's costs and expenses to make the repairs
hereunder, and such insurance carriers shall have no
recourse against the Landlord for reimbursement.
Reimbursement of Landlord
14th: If the Tenant shall fail or refuse to comply
with and perform any conditions and covenants of the
within lease, the Landlord may, if the Landlord so
elects, carry out and perform such conditions and
covenants, at the cost and expense of the Tenant, and
the said cost and expense shall be payable on demand,
or at the option of the Landlord shall be added to the
instalment of rent due immediatley thereafter but in
no case later than one month after such demand,
whichever occurs sooner, and shall be due and payable
as such. This remedy shall be in addition to such
other remedies as the Landlord may have hereunder by
reason of the breach by the Tenant of any of the
covenants and conditions in this lease contained.
Inspection and Repair
15th: The Tenant agrees that the Landlord and the
Landlord's agents, employees or other representatives,
shall have the right to enter into and upon the said
premises or any aprt thereof, at all reasonable hours,
for the purpose of examining the same or making such
repairs or alterations therein as may be necessary for
the safety and preservation thereof. This clause shall
not be deemed to be a covenant by the Landlord nor be
construed to create an obligation on the part of the
Landlord to make such inspection or repairs.
Right to Exhibit
16th: The Tenant agrees to permit the Landlord and the
Landlord's agents, employees or other representatives
to show the premises to persons wishing to rent or
purchase the same, and Tenant agrees that on and after
ninety (90) days next preceding the expiration of the
term hereof, the Landlord or the Landlord's agents,
employees or other representatives shall have the
right to place notices on the front of said premises
or any part thereof, offering the premises for rent or
for sale; and the Tenant hereby agrees to permit the
same to remain thereon without hindrance or
molestation.
Increase of Insurance Rates
17th: If for any reason it shall be impossible to
obtain fire and othe hazard insurance on the buildings
and improvements on the leased premises, in an amount
and in the form and in insurance companies acceptable
to the Landlord, the Landlord may, if the Landlord so
elects at any time thereafter, terminate this lease
and the term hereof, upon giving to the Tenant fifteen
days notice in writing of the Landlord's intention so
to do, and upon the giving of such notice, this lease
and the term thereof shall terminate. If by reason of
the use to which the premises are put by the Tenant or
character of or the manner in which the Tenant's
business is carried on, the insurance rates for fire
and other hazards shall be increased, the Tenant shall
upon demand, pay to the Landlord, as rent, the amounts
by which the premiums for such insurance are
increased. Such payment shall be paid with the next
installment of rent but in no case later than one
month after such demand, whichever occurs sooner.
Removal of Tenant's Property
18th: Any equipment, fixtures, goods or other property
of the Tenant, not removed by the Tenant upon the
termination of this lease, or upon any quitting,
vacating or abandonment of the premises by the Tenant,
or upon the Tenant's eviction, shall be considered as
abandoned and the Landlord shall have the right,
without any notice to the Tenant, to sell or otherwise
dispose of the same, at the expense of the Tenant, and
shall not be accountable to the Tenant for any part of
the proceeds of such sale, if any.
Remedies upon Tenant's Default
19th: If there should occur any default on the part of
the Tenant in The performance of any conditions and
covenants herein contained, or if during the term
hereof the premises or any part thereof shall be or
become abandoned or deserted, vacated or vacant, or
should the Tenant be evicted by summary proceedings or
otherwise, the Landlord, in addition to any other
remedies herein contained or as may be permitted by
law, may either by force or otherwise, without being
liable for prosecution therefor, or for damages, re-
enter the said premises and the same have and again
possess and enjoy; and as agent for the Tenant or
otherwise, re-let the premises and receive the rents
therefor and apply the same, first to the payment of
such expenses, reasonable attorney fees and costs, as
the Landlord may have been put to in re-entering and
repossessing the same and in making such repairs and
alterations as may be necessary; and second to the
payment of the rents due hereunder. The Tenant shall
remain liable for such rents as may be in arrears and
also the rents as may accrue subsequent to the re-
enter by the Landlord, to the extent of the difference
between the rents reserved hereunder and the rents, if
any, received by the Landlord during the remainder of
the unexpired term hereof, after deducting the
aforementioned expenses, fees and costs; the same to
be paid as such deficiencies arise and are ascertained
each month.
Termination on Default
20th: Upon the occurrence of any of the contingencies
set forth in the preceding clause, or should the
Tenant be adjudicated a bankrupt, insolvent or placed
in receivership, or should proceedings be instituted
by or against the Tenant for bankruptcy, insolvency,
receivership, agreement of composition or assignment
for the benefit of creditors, or if this lease or the
estate of the Tenant hereunder shall pass to another
by virtue of any court proceedings, writ of execution,
levy, sale, or by operation of law, the Landlord may,
if the Landlord so elects, at any time thereafter,
terminate this lease and the term hereof, upon giving
to the Tenant or to any trustee, receiver, assignee or
other person in charge of or acting as custodian of
the assets or property of the Tenant, five days notice
in writing, of the Landlord's intention so to do. Upon
the giving of such notice, this lease and the term
hereof shall end on the date fixed in such notice as
if the said date was the date originally fixed in this
lease for the expiration hereof; and the Landlord
shall have the right to remove all persons, goods,
fixtures and chattels therefrom, by force or
otherwise, without liability for damages.
Non-Liability of Landlord
21st: The Landlord shall not be liable for any damage
or injury which may be sustained by the Tenant or any
other person, as a consequence of the failure,
breakage, leakage or obstruction of the water,
plumbing, steam, sewer, waste or soil pipes, roof,
drains, leaders, gutters, valleys, downspouts or the
like or of the electrical, gas, power, conveyor,
refrigeration, sprinkler, airconditioning or heating
systems, elevators or hoisting equipment; or by reason
of the elements; or resulting from the carelessness,
negligence or improper conduct on the part of any
other Tenant or of the Landlord or the Landlord's or
this or any other Tenant's agents, employees, guests,
licensees, invitees, subtenants, assignees or
successors; or attributable to any interference with,
interruption of or failure, beyond the control of the
landlord, of any services to be furnished or supplied
by the Landlord.
Non-Waiver by Landlord
22nd: The various rights, remedies, options and
elections of the Landlord, expressed herein, are
cumulative, and the failure of the Landlord o enforce
strict performance by the Tenant of the conditions and
covenants of this lease or to exercise any election or
option or to resort or have recourse to any remedy
herein conferred or the acceptance by the Landlord of
any installment of rent after any breach by the
Tenant, in any one or more instances, shall not be
construed or deemed to be a waiver or a relinquishment
for the future by the Landlord or any such conditions
and covenants, options, elections or remedies, but the
same shall continue in full force and effect.
Non-Performance by Landlord
23rd: This lease and the obligation of the Tenant to
pay the rent hereunder and to comply with the
covenants and conditions hereof, shall not be
affected, curtailed, impaired or excused because of
the Landlord's inability to supply any service or
material called for herein, by reason of any rule,
order, regulation or preemption by any governmental
entity, authority, department, agency or subdivision
or for any delay whcih may arise by reason of
negotiations for the adjustment of any fire or other
casualty loss or because of strikers or other labor
trouble or for any cause beyond the control of the
Landlord.
Validity of Lease
24th: The terms, conditions, covenants and provisions
of this lease shall be deemed to be severable. If any
clause or provision herein contained shall be adjudged
to be invalid or unenforceable by a court of competent
jurisdiction or by operation of any applicable law, it
shall not affect the validity of any other clause or
provision herein, but such other clauses or provisions
shall remain in full force and effect.
Notices
25th: All notices required under the terms of this
lease shall be given and shall be complete by mailing
such notices by certified or registered mail, return
receipt requested, to the address of the parties as
shown at the head of this lease, or to such other
address as may be designated in writing, which notice
of change of adcress shall be given in the same
manner.
Title and Quiet Enjoyment
26th: The Landlord covenants and represents that the
Landlord is the owner of the premises herein leased
and has the right and authority to enterinto, execute
and deliver this lease; and does further covenant that
the Tenant on paying the rend and performing the
ocnditions and covenants herein contained, shall and
may peaceably and quietly have, hold and enjoy the
leased premises for the term aforementioned.
Entire Contract
27th: This lease contians the entire contract between
the parties. No representative, agent or employee of
the Landlord has been authorized to make any
representations or promises with reference to the
within letting or to vary, alter or modify the terms
hereof. No additions, changes or modifications,
renewals or extensions hereof, shall be binding unless
reduced to writing and signed by the Landlord and the
Tenant.
Tax Increase
28th: See Rider Para. #32
Mechanics' Liens
29th: If any mechanics' or other liens shall be
created or filed against the leased premises by reason
of labor performed or materials furnished for the
Tenant in the erection, construction, completion,
alteration, repair or addition to any building or
improvement, the Tenant shall upon demand, at the
Tenant's own cost and expense, cause such lien or
liens to be satisfied and discharged of record
together with any Notices of Intention that may have
been filed. Failure so to do, shall entitle the
Landlord to resort to such remedies as are provide
herein in the case of any default of this lease, in
addition to such as are permitted by law.
Waiver of Subrogation Rights
30th: The Tenant waives all rights of recovery against
the Landlord or Landlord's agents, employees or other
representatives, for any loss, damages or injury of
any nature whatsoever to property or persons for which
the Tenant is insured. The Tenant shall obtain from
Tenant's insurance carriers and will deliver to the
Landlord, waivers for the subrogation rights under
the respective policies.
Security
31st: The Tenant has this day deposited with the
Landlord the sum of (2) months rent as security for
the payment of the rent hereunder and the full and
faithful performance by the Tenant of the covenants
and conditions on the part of the Tenant to be
performed. Said sum shall be returned to the Tenant,
without interest, after the expiration of the term
hereof, provided that the Tenant has fully and
faithfully performed all such covenants and conditions
and is not in arrears in rent During the term hereof,
the Landlord may, if the Landlord so elects, have
recourse to such security, to make good any default by
the Tenant, in which event the Tenant shall, on
demand, promptly restore said security to its original
amount. Liability to repay said security to the Tenant
shall run with the reversion and little to said
premises, whether any change in ownership thereof be
by voluntary alienation or as the result of judicial
sale, foreclosure or other proceedings, or the
exercise of a right of taking or entry by any
mortgagee. The Landlord shall assign or transfer said
security, for the benefit of the Tenant, to any
subsequent owner or holder of the reversion or title
to said premises, in which case the assignee shall
become liable for the repayment thereof as herein
provided, and the assignor shall be deemed to be
released by the Tenant from all liability to return
such security. This provision shall be applicable to
every alienation or change in title and shall in no
wise be deemed to permit the Landlord to retain the
security after termination of the Landlord's ownership
of the reversion or title. The Tenant shall not
mortgage, encumber or assign said security without the
written consent of the Landlord.
See Exhibits A,B, and C attached hereto and made a
part hereof.
See Rider attached hereto and made a part hereof.
Conformation with Laws and Regulations
The Landlord may pursue the relief or remedy sought in
any invalid clause, by conforming the said clause with
the provisions of the statutes or the regulations of
any governmental agency in such case made and provided
as if the particular provisions of the applicable
statutes or regulations were set forth herein at
length.
In all references herein to any parties, persons,
entities or corporations the use of any particular
gender or the plural or singular number is intended to
include the appropriate gender or number as the text
of the within instrument may require. All the terms,
covenants and conditions herein contained shall be for
and shall inure to the benefit of and shall bind the
respective parties hereto, and their heirs, executors,
administrators, personal or legal representatives,
successors and assigns.
In Witness Whereof, the parties hereto have hereunto
set their hands and seals, or caused these presents to
be signed by their proper corporate officers and their
proper corporate seal to be hereto affixed, the day
and year first above written.
Signed, Sealed and Delivered ARCHIE
SCHWARTZ CO./BELL HOLDING CO
in the presence of
or Attested by /S/ David
Mandelbaum
David Mandelbaum Landlord
PPA TECHNOLOGIES, INC.
Tenant
/S/ Gerald Sugerman/ Secretary
/S/ Roger L. Fidler
Gerald Sugerman
Roger L. Fidler
ADDENDUM TO LEASE BETWEEN ARCHIE SCHWARTZ CO./BELL
HOLDING CO.
AND PPA TECHNOLOGIES DATED MARCH 12, 1997
Notwithstanding any terms and conditions set
forth herein above, the following terms and conditions
amend and supersede the Lease between the parties:
With respect to:
The business code referred to under Use is a SIC Code,
not an ISRA Code.
Paragraph 4: All equipment brought into the Premises
by Tenant shall remain the property of Tenant and
shall be removed by Tenant when Tenant vacates the
premises, and any alterations to the Premises so as to
make the equipment operable shall be removed and the
Premises returned to its original condition at
Tenant's expense.
Paragraph 12: The Lease shall not terminate until
actual condemnation. Landlord shall advise Tenant
within five (5) business days of the commencement of
any action seeking condemnation and Tenant shall have
the right to seek damages for its own account for
condemnation of its Leasehold interests. In any
settlement with an entity seeking condemnation,
Landlord shall not settle with such entity on terms
which provide Tenant with less than ninety (90) days
to vacate the Premises.
Paragraph 13: If the building is rendered unfit for
occupancy for thirty (30) consecutive days, Tenant
shall have the option to terminate the Lease.
Paragraph 17: The notice period is increased to thirty
(30) days and in the event that the cost of Landlord's
coverage is at issue, Tenant shall have the right to
seek out a policy with substantially the same coverage
as the policy upon which Landlord's complaint is
based.
Paragraph 41(C): The term "petroleum products" shall
be defined as "petroleum distillates", the term "any
other substance defined as a hazardous or toxic
substance by any Federal, state or local law,
ordinance, rule or regulation" shall mean any
substance which has a DOT health hazard rating greater
than 2. The prohibition against gasoline and
petroleum distillates shall not prohibit Tenant from
allowing automobiles and trucks from being parked on
the premises, hydraulic fluids and lubricating oils
used in our equipment, as well as minor amounts of
office supply materials, e.g correction fluid,
cleaning solvents (detergents and ammonia glass
cleaner) and the like.
Exhibit B: There are two leaks in the warehouse, and
one at the front door that shall be repaired.
CONSENT OF CERTIFIED PUBLIC ACCOUNTANT
The undersigned, Thomas P. Monahan, the certified
public accountant who audited the financial statements
of PPA Technologies, Inc. for the years ending June
30, 1996 and 1997, hereby consents to the use of his
accountant's report, and related statements in the
registration statement of PPA Technologies, Inc. filed
herewith.
/S/ Thomas P.
Monahan
Thomas P. Monahan,
C.P.A.
??
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S><C>
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the year ended June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 210,657
<SECURITIES> 0
<RECEIVABLES> 2,733
<ALLOWANCES> 0
<INVENTORY> 42,679
<CURRENT-ASSETS> 256,069
<PP&E> 35,927
<DEPRECIATION> (7,370)
<TOTAL-ASSETS> 290,976
<CURRENT-LIABILITIES> 313,401
<BONDS> 0
0
296,600
<COMMON> 51,750
<OTHER-SE> (74,175)
<TOTAL-LIABILITY-AND-EQUITY> 290,976
<SALES> 131,335
<TOTAL-REVENUES> 816,917
<CGS> 61,453
<TOTAL-COSTS> 211,080
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3065
<INCOME-PRETAX> (144,263)
<INCOME-TAX> 0
<INCOME-CONTINUING> (144,263)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (144,263)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
