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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
Hydron Technologies, Inc.
________________________________________________________
(Name of Issuer)
Common Stock, $0.01 par value
________________________________________________________
(Title of Class of Securities)
449020106
____________________________________
(CUSIP Number)
Copy to:
Lawrence A. Kletter
Eckert Seamans Cherin & Mellott
One International Place, 18th Floor
Boston, MA 02110
(617) 342-6855
________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 19, 1996
________________________________________________________
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
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SCHEDULE 13D
CUSIP No. 449020106
1. Name of Reporting Person: Victor N. Grillo
I.R.S. Identification No.: ###-##-####
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds: 00
5. Check Box if Disclosure of Legal Proceedings is [ ]
Required Pursuant To Items 2(d) or 2(e)
6. Citizenship or Place of Organization: United States
Number of 7. Sole Voting Power: 1,500,000
Shares
Beneficially 8. Shared Voting Power: - 0 -
Owned by
Each 9. Sole Dispositive Power: 1,500,000
Reporting
Person 10. Shared Dispositive Power: - 0 -
With
11. Aggregate Amount Beneficially Owned by Each 1,500,000
Reporting Person:
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares [ ]
13. Percent of Class Represented by Amount in Row (11): 6.46%
14. Type of Reporting Person: IN
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SCHEDULE 13D
CUSIP No. 449020106
1. Name of Reporting Person: DTR Associates Limited Partnership
Tax Identification No.: 04-3135090
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds: W.C.
5. Check Box if Disclosure of Legal Proceedings is [ ]
Required Pursuant To Items 2(d) or 2(e)
6. Citizenship or Place of Organization: United States
Number of 7. Sole Voting Power: 70,834
Shares
Beneficially 8. Shared Voting Power: - 0 -
Owned by
Each 9. Sole Dispositive Power: 70,834
Reporting
Person 10. Shared Dispositive Power: - 0 -
With
11. Aggregate Amount Beneficially Owned by Each 70,834
Reporting Person:
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares [ ]
13. Percent of Class Represented by Amount in Row (11): .30%
14. Type of Reporting Person: PN
<PAGE>
Item 1. Security and Issuer.
The title of the class of equity securities to which this
Schedule 13D relates is the common stock, $0.01 par value (the "Common
Stock"), of Hydron Technologies, Inc. (the "Company"). The Company's
principal executive offices are located at 1001 Yamato Road, Suite 403,
Boca Raton, Florida 33431.
Item 2. Identity and Background.
This statement is being filed by the following person and entity:
(i) Victor N. Grillo ("Grillo"), a United States citizen, whose business
address is 150 East Palmetto Park Road, Suite 700, Boca Raton, Florida
33432. Grillo's principal occupation is President of DTR Associates,
Inc.; and
(ii) DTR Associates Limited Partnership, a Massachusetts limited
partnership ("DTR"), with a business address of 150 East Palmetto Park
Road, Suite 700, Boca Raton, FL 33432. The principal business of DTR
is engaged in the business of developing, marketing and distributing
consumer products through direct response and retail distribution
channels.
Collectively, Grillo and DTR are hereinafter sometimes referred to as the
"Reporting Persons."
Grillo and DTR may be deemed to be beneficial owners of
securities of the Company owned by either party.
During the past five years, the Reporting Persons have not (i)
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violation with respect to such
laws.
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Item 3. Source and Amount of Funds or Other Consideration.
On March 9, 1992, Dento-Med Industries, Inc., now known as the
Company, granted DTR an option to purchase 350,000 shares of Common Stock
at a purchase price of $3.00 per share. On October 3, 1994, DTR assigned
its rights to purchase an aggregate of 279,166 shares of Common Stock to 12
persons. It retained options to purchase up to 70,834 shares of Common
Stock. The options are exercisable until March 8, 1997.
On July 19, 1996, the Company granted to DTR an option to
purchase 1,500,000 shares of Common Stock at a purchase price of $.01 per
share (the "DTR Option") in exchange for DTR agreeing to terminate its
rights to receive royalty payments in return for the DTR Option. On
January 3, 1997, DTR exercised options to purchase 1,500,000 shares of
Common Stock of the Company at a purchase price of $.01 per share. The
1,500,000 shares of Common Stock received pursuant to the exercise of the
options by DTR were assigned to Grillo. The source of funds for the
purchase of the Common Stock pursuant to the exercise of the DTR Option was
from the working capital of DTR.
Item 4. Purpose of Transaction.
The purchase of the Common Stock to which this statement relates
was effected for the purposes of investment. The Reporting Persons have no
present plans or proposals to change the Company's business, corporate
structure, capitalization, management or dividend policy.
Except as set forth in this Item 4, the Reporting Persons have no
present plans or proposals which relate to or would result in any of the
following (although the Reporting Persons reserve the right to develop such
plans or proposals or any other plans relating to the Company and to take
action with respect thereto): (i) the acquisition by any person of
additional securities of the Company, or the disposition of securities of
the Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (iii) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries; (iv) any change in the present
board of directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board; (v) any material change in the present
capitalization or dividend policy of the Company; (vi) any other material
change in the Company's business or corporate structure; (vii) changes in
the Company's certificate of incorporation, bylaws, or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person; (viii) causing a class of securities
of the Company to be delisted from a national securities exchange or to
cease to be authorized to be quoted in an inter-dealer quotation system of
a registered national securities association; (ix) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (x) any action similar
to any of those enumerated above.
Grillo, without the consent of the Company, may purchase
additional shares of Common Stock in the open market or in private
transactions at any time. Pursuant to the terms of existing option
agreements for up to 70,834 shares of Common Stock of the Company, DTR may
not purchase additional shares of Common Stock so long as it is the
beneficial owner of options to purchase Common Stock of the Company. The
Reporting Persons may be deemed to beneficially own 70,834 shares of Common
Stock issuable upon exercise of options to purchase Common Stock of the
Company, which DTR may exercise up until March 8, 1997.
<PAGE>
Item 5. Interest in Securities of Issuer.
Grillo and DTR may be deemed to be the beneficial owner of
securities of the Company held by either party. Grillo beneficially owns
and has sole voting and dispositive power with respect to 1,500,000 shares
of Common Stock representing approximately 6.46% of the Common Stock
outstanding. The Reporting Persons may also be deemed to own 70,834 shares
of Common Stock which may be issued upon the exercise of an option held by
DTR. After giving effect to such exercise and assuming no other change in
beneficial ownership or shares outstanding, the Reporting Persons would
beneficially own 1,570,834 shares of Common Stock representing
approximately 6.76% of the Common Stock outstanding.
Except as described herein, no transactions in Common Stock were
effected during the past 60 days by the Reporting Persons.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships (legal or otherwise) between the Reporting Persons and any
other person with respect to securities of the Company, including but not
limited to transfer or voting of any of the securities finder's fees, joint
ventures, loan or option arrangements, put or calls, guarantees of profits,
division of profits or loss or the giving or withholding of proxies other
than pursuant to the following provisions of the agreement governing the
DTR Option:
5. Restrictions Upon Sale. The Option Holder shall not
sell into the public market more Shares than the volume that
would be permissible for sales of restricted or affiliate shares
under Rule 144 promulgated under Act.
8. No Stockholder Rights; Proxy for the Shares.
(a) Neither the Option Holder nor any other person
legally entitled to exercise this Option shall be entitled to any
of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable upon any exercise of this Option,
unless and until a certificate or certificates representing such
Shares shall have actually been issued and delivered to the
Option Holder.
(b) The Option Holder hereby grants to Harvey Tauman, the
Chairman of the Board, Chief Executive Officer and President of
the Company, in his individual capacity, an irrevocable proxy to
vote the Shares in any and all matters in the discretion of
Harvey Tauman. This proxy shall lapse as to such Shares that are
sold to an unaffiliated third party upon the consummation of such
sale.
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9. Standstill. Option Holder hereby covenants and agrees
with the Company that without the prior written consent of the
Company, which may in its absolute discretion be withheld, it
shall not
(a) acquire, offer to acquire, or agree to acquire,
directly or indirectly, by purchase or otherwise, beneficial
ownership of any Voting Securities, or direct or indirect rights
or options to acquire any Voting Securities (including, without
limitation, non-Voting Securities convertible into or with
appertaining rights to acquire Voting Securities), of the
Company; or
(b) make, or in any way participate, directly or
indirectly, in any Solicitation of Proxies to vote, or seek to
advise or influence any person, entity or Group with respect to
the voting of, any Voting Securities of the Company, or initiate
or propose any stockholder proposal with respect to the Company
described in Rule 14a-8 promulgated under the Exchange Act; or
(c) form, join or in any way participate in, or in any
manner provide any form of assistance to, a Group with respect to
any Voting Securities of the Company; or
(d) otherwise act, alone or in concert with others, to
seek to, or assist or encourage any other person, entity or Group
in seeking to, control or influence the management, board of
directors or policies of the Company or propose or effect any
form of business combination with the Company or any of its
Affiliates or any restructuring, recapitalization or similar
transaction with respect to the Company or any of its Affiliates.
(e) The terms "Affiliate" and "Associate" shall mean any
present or future Affiliate or Associate within the meaning of
Rule 12b-2 promulgated under the Exchange Act; the term "Common
Stock" shall mean Company's Common Stock, $.01 par value per
share; the term "Group" means a Group within the meaning of
Section 13(d) of the Exchange Act; the term "Voting Securities"
shall mean Company's Common Stock, and any other securities of
the Company entitling the holder to vote for the election of
directors of the Company; the term "Exchange Act" shall mean the
Securities Exchange Act of 1934; and the terms "Solicitation" and
"Proxies" shall have the meanings used in the proxy rules of the
Securities and Exchange Commission under the Exchange Act.
<PAGE>
Item 7. Material to be Filed as Exhibits.
1. Stock Option Agreement dated as of March 9, 1992 between DTR and
Dento-Med Industries, Inc. (now known as the Company).
2. Option Agreement dated as of May 31, 1996 between DTR and the Company.
3. Agreement to file Joint Statement between the Reporting Persons.
Signatures.
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is
true, complete and correct.
March 3, 1997 /s/ Victor N. Grillo
_________________ ___________________________________________________
Date Victor N. Grillo
DTR Associates Limited Partnership
By: DTR Associates, Inc., its sole General Partner
March 3, 1997 By: /s/ Victor N. Grillo
_________________ __________________________________________
<PAGE>
EXHIBIT 1
STOCK OPTION AGREEMENT
______________________
Stock Option Agreement (the "Agreement") dated as of the 9th day of
March, 1992, by and between DENTO-MED INDUSTRIES, INC., a New York
corporation (the "Company") with its executive offices at 941 Clint Moore
Road, Boca Raton, Florida 33487 and DTR ASSOCIATES LIMITED PARTNERSHIP (the
"Option Holder"), a Massachusetts limited partnership at with its principal
place of business at 3 Tech Circle, Natick, Massachusetts 01760.
W I T N E S S E T H :
_____________________
Whereas, the Option Holder is to perform valuable services for the
Company;
Whereas, the Board of Directors of the Company (the "Board") has
determined that it is in the best interest of the Company to grant a
nonqualified option to the Option Holder to purchase shares of the
Company's common stock, $.01 par value per share (the "Common Stock"), as
an inducement for increased effort during such service, and has approved
the execution of this Agreement; and
Whereas, the option granted hereby is not intended to qualify either
as an "incentive stock option" under Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code") or to be granted under any stock
option plan of the Company.
NOW, THEREFORE, in consideration of the mutual covenants conditions
and promises contained herein, the parties hereto hereby agree as follows:
1. Grant of Option.
________________
The Company hereby grants to the Option Holder the right and option to
purchase on the terms and conditions hereinafter set forth, all or any part
of an aggregate of 350,000 shares (the "Shares") of Common Stock at the
purchase price of $3.00 per share (such purchase price being 100% of the
fair market value of the Common Stock at the close of business on March 9,
1992) exercisable at any time and from time to time in accordance with the
provisions of this Agreement, expiring at 5:00, New York City time, on
March 8, 1997, unless terminated sooner as hereinafter provided (the
"Expiration Date").
2. Termination; Non-Transferability; Exceptions.
_____________________________________________
In the event the association of the Option Holder with the Company
terminates by reason of either a material breach on the part of the Option
Holder of the Distribution Agreement dated November 20, 1991 between the
Company and the Option Holder (the "Distribution Agreement') or the
termination of the Distribution Agreement by the Option Holder for other
than a material breach of the Distribution Agreement by the Company, then
in either such event, this Agreement shall immediately terminate and be of no
<PAGE>
further force and effect without any other act by or on behalf of the
parties hereto except that the Option Holder shall have 90 days from the
date of termination of association to exercise this option to the extent
otherwise exercisable on the date of such termination, but in no event
later than 5:00, New York City Time, on March 8, 1997.
3. Method of Exercise.
___________________
Each exercise of this option shall be by means of a notice of exercise
delivered to the Company: (i) containing the written statement set forth
in paragraph no. 4(d) hereof, (ii) specifying the number of Shares to be
purchased and (iii) accompanied by payment to the Company of the full
purchase price of the Shares to be purchased either by cash or check
payable to the order of the Company. In no event shall any fractional
Shares be issued upon any exercise of the option granted hereunder.
4. Issuance of Shares.
___________________
The Option Holder hereby warrants and represents to, and covenants and
agrees with, the Company as follows:
(a) The Shares issuable upon exercise of this Option are being
purchased for the Option Holder's own account for investment only, and not
with a view towards the distribution or resale to others;
(b) The Option Holder has been advised and is aware that (i) it may
be impossible to readily liquidate this investment, and (ii) the Option Holder
must bear the economic risk of this investment in the Shares for an indefinite
period of time because the Shares have not been registered under Section 5 of
the Securities Act of 1933, as amended (the "Act"), and therefore, cannot be
sold unless they are subsequently registered under the Act or an exemption from
such registration is available;
(c) The Option Holder understands that the Company has no obligation
to register the Shares, except as expressly hereinafter set forth, and the
Company may not be able to effect such registration; and
(d) Prior to the issuance of any Shares, the Option Holder shall
provide to the Company a written statement to the effect that (i) the Option
Holder has had the opportunity to ask questions of, and receive answers from,
the Company concerning the business and financial condition of the Company;
(ii) the Option Holder has had the opportunity to review all reports filed by
the Company pursuant to Section 13 of the Securities Exchange Act of 1934
during the fiscal year of the Company prior to the date of the exercise of
this option; (iii) no warranties or representations have been made to the
<PAGE>
Option Holder by any officer, director, employee or agent of the Company,
except as expressly set forth herein; (iv) the Option Holder has evaluated
the risks of purchasing the Shares; (v) the Option Holder has determined that
the purchase of the Shares is a suitable investment; (vi) the Option Holder has
adequate financial resources for an investment of such character; (vii) the
Option Holder alone or with its representative, has such knowledge and
experience in financial and business matters that the Option Holder is
capable of evaluating the merits and risks of the purchase of the Shares;
and (viii) the warranties and representations made herein by the Option
Holder are accurate, true and correct, and may be relied upon by the
Company in connection with the issuance of the Shares hereunder to the
Option Holder.
5. Registration Rights.
____________________
The Company covenants and agrees with the Option Holder that it agrees
to use its best efforts to file a registration statement with the
Securities and Exchange Commission for purposes of offering for sale
securities to the public for selling security holders and/or the Company
prior to April 30, 1992. The Option Holder will be entitled to have the
Shares included in such registration statement at no cost to the Option
Holder. Notwithstanding the foregoing, the Company shall not be liable for
any and all fees and expenses incurred, if any, by the Option Holder for
the fees and expenses of attorneys or other representatives of the Option
Holder, or for any selling or brokerage commissions, if any, incurred in
connection with the registration and sale to the public of the Shares. The
Company further covenants and agrees with the Option Holder to use its best
efforts to have such registration statement declared effective, maintained
effective for the shorter of five years thereafter or the sale of all the
securities offered thereby and have the Shares registered for sale in a
reasonable number of states.
6. No Transfer.
____________
This Option and the rights and privileges granted hereby shall not be
transferred, assigned, pledged or hypothecated in any way, whether by
operation of the law, or otherwise, except by will or the laws of descent
and distribution. Upon any attempt to so transfer, assign, pledge,
hypothecate or otherwise dispose of this option or any right or privileges
granted hereby contrary to the provisions hereof, this Option and all
rights and privileges contained herein shall immediately become null and
void and of no further force and effect.
7. Adjustments.
____________
(a) If the outstanding shares of the Common Stock are increased,
decreased, changed into, or exchanged for a different number or kind of
<PAGE>
Shares or securities of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split or the like, an appropriate and proportionate adjustment shall
be made in the number and kind of securities receivable upon the exercise
of this Option, without change in the total price applicable to the
unexercised portion of this option but with a corresponding adjustment in
the price for each unit of any security covered by this option.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or upon the sale of substantially all of the assets of the
Company, the Board shall provide in writing in connection with such
transaction for one or more of the following alternatives, separately or in
combination: (i) the assumption by the successor entity of the options
theretofore granted or the substitution by such entity for such options of
new options covering the stock of the successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices; or (ii) the continuance of the Agreement by such
successor entity in which this Option shall remain in full force and effect
under the terms so provided.
(c) Any adjustments under this paragraph no. 7 shall be made by the
Board, whose good faith determination as to what adjustments shall be made,
and the extent thereof, shall be final, binding and conclusive.
8. No Stockholder Rights.
______________________
Neither the Option Holder nor any other person legally entitled to
exercise this option shall be entitled to any of the rights or privileges
of a stockholder of the Company with respect to any Shares issuable upon
any exercise of this Option, unless and until a certificate or certificates
representing such Shares shall have actually be issued and delivered to the
Option Holder.
9. No Waiver.
__________
The failure of any of the parties hereto to enforce any provision
hereof on any occasion shall not be deemed to be a waiver of any preceding
or succeeding breach of such provision or any other provision.
10. Entire Agreement.
_________________
This Agreement constitutes the entire agreement and understanding of
the parties hereto and no amendment, modification or waiver of any
provision herein shall be effective unless in writing, executed by the
party charged therewith.
<PAGE>
11. Governing Law.
______________
This Agreement shall be construed, interpreted and enforced in
accordance with and shall be governed by the laws of the State of New York
without regard to the principles of conflicts of laws.
12. Binding Effect.
_______________
This Agreement shall bind and inure to the benefit of the parties,
their successors and assigns.
13. Assignment.
___________
Except as set forth in paragraph nos. 2(b) and 7(b) hereof, this
Agreement may not be assigned by the parties hereto, and any attempted
assignment hereof shall be void and of no effect.
14. Paragraph Headings.
___________________
The paragraph headings herein have been inserted for convenience of
reference only, and shall in no way modify or restrict any of the terms or
provisions hereof.
15. Notices.
________
Any notice or other communication under the provisions of this
Agreement shall be in writing, and shall be given by postage prepaid,
registered or certified mail, return receipt requested, by hand delivery
with an acknowledgement copy requested, or by the Express Mail service
offered by the United States Post Office, directed to the addresses set
forth above, or to any new address of which any party hereto shall have
informed the others by the giving of notice in the manner provided herein.
Such notice or communication shall be effective, if sent by mail, three (3)
days after it is mailed within the continental United States; if sent by
Express Mail service, one day after it is mailed; or by hand delivery, upon
receipt.
16. Unenforceability; Severability.
_______________________________
If any provision of this Agreement is found to be void or
unenforceable by a court of competent jurisdiction, then the remaining
provisions of this Agreement, shall, nevertheless, be binding upon the
parties with the same force and effect as though the unenforceable part had
been severed and deleted.
17. Broker's Fees.
______________
No party has incurred nor will incur any liability for brokerage fees
or agents' commissions in connection with the transactions contemplated
hereby, and all parties warrant that no agent or broker was instrumental in
consummating this transaction so as to earn any such fee.
<PAGE>
18. Counterparts.
_____________
This Agreement may be executed in counterparts, all of which shall be
deemed to be duplicate originals.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date above written.
DENTO-MED INDUSTRIES, INC.
by: /s/ Harvey Tauman, President
_______________________________
Harvey Tauman, President
DTR ASSOCIATES LIMITED PARTNERSHIP
by: /s/ Victor N. Grillo
_______________________________
Victor N. Grillo, Sr.
President
<PAGE>
EXHIBIT 2
NONQUALIFIED STOCK OPTION AGREEMENT
Nonqualified Stock Option Agreement (the "Agreement") dated as of the
31st day of May, 1996, by and between HYDRON TECHNOLOGIES, INC., a New York
corporation (the "Company") with its executive offices at 1001 Yamato Road,
Suite 403, Boca Raton, Florida 33431 and DTR ASSOCIATES LIMITED PARTNERSHIP
(the "Option Holder"), a Massachusetts limited partnership at with its
principal place of business at 3 Tech Circle, Natick, Massachusetts 01760.
W I T N E S S E T H :
Whereas, as a part of a series of transactions relating to a
modification of the relationship among the Company, QVC, Inc. and the
Option Holder, the Board of Directors of the Company (the "Board") has
determined that it is in the best interest of the Company to grant a
nonqualified option to the Option Holder to purchase shares of the
Company's Common Stock;
Whereas, this Nonqualified Stock Option Agreement is being executed
simultaneously with the execution and delivery of a series of other
agreements, documents and instruments to effectuate the aforementioned
transactions; and
Whereas, the option granted hereby is not intended to qualify either
as an "incentive stock option" under Section 422A of the Internal Revenue
Code of 1986, as amended or to be granted under any stock option plan of
the Company.
NOW, THEREFORE, in consideration of the mutual covenants conditions
and promises contained herein, the parties hereto hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Option Holder
the right and option to purchase on the terms and conditions hereinafter
set forth, all or any part of an aggregate of 1,500,000 shares (the
"Shares") of Common Stock, $.01 par value per share (the "Common Stock"),
at the purchase price equal to $.01 per share, exercisable at any time and
from time to time in accordance with the provisions of this Agreement,
expiring at 5:00, New York City time, on May 31, 2001 (the "Option").
2. Method of Exercise. Each exercise of this Option shall be by
means of a notice of exercise delivered to the Company: (i) containing the
written statement set forth in Exhibit A hereof, (ii) specifying the number
of Shares to be purchased and (iii) accompanied by payment to the Company
of the full purchase price of the Shares to be purchased either by cash or
check payable to the order of the Company. Notwithstanding anything to the
contrary contained herein, in no event shall this Option be exercised for
the lesser of 500,000 Shares or the then number of Shares remaining to be
issued upon proper exercise of this Option if less than 500,000 Shares, and
no fractional Shares will be issued upon exercise of this Option.
<PAGE>
3. Issuance of Shares. The Option Holder hereby warrants and
represents to, and covenants and agrees with, the Company as follows.
(a) Unless the Shares have been registered under Section 5 of the
Securities Act of 1933, as amended (the "Act") for resale to the public;
(i) the Shares issuable upon exercise of this Option are being
purchased for the Option Holder's own account for investment only, and not
with a view toward the distribution or resale to others;
(ii) the Option Holder has been advised and is aware that (k)
it may be impossible to readily liquidate this investment, and (ii) the
Option Holder must bear the economic risk of this investment in the Shares
for an indefinite period of time because the Shares have not been
registered under Section 5 of the Act, and therefore, cannot be sold unless
they are subsequently registered under the Act or an exemption from such
registration is available; and
(iii) the Option Holder understands that the Company has no
obligation to register the Shares, except as expressly set forth herein.
(b) Prior to the issuance of any Shares, the Option Holder shall
provide to the Company the written Option Exercise Form, a copy of which is
annexed hereto as Exhibit A.
4. Registration Rights.
(a) The Company covenants and agrees with the Option Holder to
register the Shares under Section 5 of the Act for resale to the public by
the preparation and filing of a registration statement with the Securities
and Exchange Commission, and to have such registration statement declared
effective not later than the close of business on November 19, 1996.
Notwithstanding the foregoing, the Company shall not be liable for any and
all fees and expenses incurred, if any, by the Option Holder for the fees
and expenses of attorneys or other representatives of the Option Holder, or
for any selling or brokerage commissions, if any, incurred in connection
with the registration and sale to the public of the Shares. The Company
further covenants and agrees with the Option Holder to use its best efforts
to have such registration statement declared effective, maintained
effective for the shorter of three (3) years thereafter.
(b) In the event such registration statement is not declared
effective prior to the close of business on November 19, 196, then in such
event and as the sole remedy for and in full satisfaction of any and all
claims for the failure to have the Shares registered for resale to the
public, the Company agrees to pay to Option Holder the sum of $637,500,
which shall be used immediately and solely to exercise the outstanding
<PAGE>
Option held by the Option Holder dated March 9, 1992, as amended, and to
thereby purchase 212,500 shares underlying such Option.
5. Restrictions Upon Sale. The Option Holder shall not sell into
the public market more Shares than the volume that would be permissible for
sales of restricted or affiliate shares under Rule 144 promulgated under
Act.
6. No Transfer. This Option and the rights and privileges granted
hereby shall not be transferred, assigned, pledged or hypothecated in any
way, whether by operation of the law, or otherwise, except by will or the
laws of descent and distribution. Upon any attempt to so transfer, assign,
pledge, hypothecate or otherwise dispose of this Option or any right or
privileges granted hereby contrary to the provisions hereof, this Option
and all rights and privileges contained herein shall immediately become
null and void and of no further force and effect.
7. Adjustments.
(a) If the outstanding shares of the Common Stock are increased,
decreased, changed into, or exchanged for a different number or kind of
Shares or securities of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split or the like, an appropriate and proportionate adjustment shall
be made in the number and kind of securities receivable upon the exercise
of this Option, without change in the total price applicable to the
unexercised portion of this Option but with a corresponding adjustment in
the price for each unit of any security covered by this Option.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or upon the sale of substantially all of the assets of the
Company, the Board shall provide in writing in connection with such
transaction for one or more of the following alternatives, separately or in
combination: (i) the assumption by the successor entity of the Options
theretofore granted or the substitution by such entity for such Options of
new Options covering the stock of the successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices; or (ii) the continuance of the Agreement by such
successor entity in which this Option shall remain in full force and effect
under the terms so provided.
(c) Any adjustments under this paragraph no. 7 shall be made by the
Board, whose good faith determination as to what adjustments shall be made,
and the extent thereof, shall be final, binding and conclusive.
<PAGE>
8. No Stockholder Rights; Proxy for the Shares.
(a) Neither the Option Holder nor any other person legally entitled
to exercise this Option shall be entitled to any of the rights or
privileges of a stockholder of the Company with respect to any Shares
issuable upon any exercise of this Option, unless and until a certificate
or certificates representing such Shares shall have actually be issued and
delivered to the Option Holder.
(b) The Option Holder hereby grants to Harvey Tauman, the Chairman of
the board, Chief Executive Officer and President of the Company, in his
individual capacity, an irrevocable proxy to vote the Shares in any and all
matters in the discretion of Harvey Tauman. This proxy shall lapse as to
such Shares that are sold to an unaffiliated third party upon the
consummation of such sale.
9. Standstill. Option Holder hereby covenants and agrees with the
Company that without the prior written consent of the Company, which may in
its absolute discretion be withheld, it shall not
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, beneficial ownership of any Voting
Securities (including, without limitation, non-Voting Securities
convertible into or with appertaining rights to acquire Voting Securities),
of the Company; or
(b) make, or in any way participate, directly or indirectly, in any
Solicitation of Proxies to vote, or seek to advise or influence any person,
entity or Group with respect to the voting of, any Voting Securities of the
Company, or initiate or propose any stockholder proposal with respect to
the Company described in Rule 14a-8 promulgated under the Exchange Act; or
(c) form, join or in any way participate in, or in any manner provide
any form of assistance to, a Group with respect to any Voting Securities of
the Company; or
(d) otherwise act, alone or in concert with others, to seek to, or
assist or encourage any other person, entity or Group in seeking to,
control or influence the management, board of directors or policies of the
Company or propose or effect any form of business combination with the
Company or any of its Affiliates or any restructuring, recapitalization or
similar transaction with respect to the Company or any of its Affiliates.
(e) The terms "Affiliate" and "Associate" shall mean any present or
future Affiliate or Associate within the meaning of Rule 12b-2 promulgated
under the Exchange Act; the term "Common Stock" shall mean Company's Common
Stock, $.01 par value per share; the term "Group" means a Group within the
meaning of Section 13(d) of the Exchange Act; the term "Voting Securities"
shall mean Company's Common Stock, and any other securities of Company
entitling the holder to vote for the election of directors of the Company;
<PAGE>
the term "Exchange Act" shall mean the Securities Exchange Act of 1934; and
the terms "Solicitation" and "Proxies" shall have the meanings used in the
proxy rules of the Securities and Exchange Commission under the Exchange
Act.
10. No Waiver. The failure of any of the parties hereto to enforce
any provision hereof on any occasion shall not be deemed to be a waiver of
any preceding or succeeding breach of such provision or any other
provision.
11. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto and no amendment,
modification or waiver of any provision herein shall be effective unless in
writing, executed by the party charged therewith.
12. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with and shall be governed by the laws of the
State of New York without regard to the principles of conflicts of laws.
13. Binding Effect. This Agreement shall bind and inure to the
benefit of the parties, their successors and assigns.
14. Assignment. Except as set forth in paragraph no.7(b) hereof,
this Agreement may not be assigned by the parties hereto, and any attempted
assignment hereof shall be void and of no effect.
15. Paragraph Headings. The paragraph headings herein have been
inserted for convenience of reference only, and shall in no way modify or
restrict any of the terms or provisions hereof.
16. Notices. Any notice or other communication under the provisions
of this Agreement shall be in writing, and shall be given by postage
prepaid, registered or certified mail, return receipt requested; by hand
delivery with an acknowledgement copy requested; or by the Express Mail
service offered by the United States Post Office or any reputable overnight
delivery service, directed to the addresses set forth above, or to any new
address of which any party hereto shall have informed the others by the
giving of notice in the manner provided herein. Such notice or
communication shall be effective, if sent by postage prepaid, registered or
certified mail, return receipt requested, three (3) days after it is mailed
within the continental United States; if sent by Express Mail or any
reputable overnight delivery service, one (1) day after it is forwarded; or
by hand delivery, upon receipt.
17. Unenforceability; Severability. If any provision of this
Agreement is found to be void or unenforceable by a court of competent
jurisdiction, then the remaining provisions of this Agreement, shall,
nevertheless, be binding upon the parties with the same force and effect as
though the unenforceable part had been severed and deleted.
<PAGE>
18. Broker's Fees. No party has incurred nor will incur any
liability for brokerage fees or agents' commissions in connection with the
transactions contemplated hereby, and all parties warrant that no agent or
broker was instrumental in consummating this transaction so as to earn any
such fee.
19. Counterparts. This Agreement may be executed in counterparts,
all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date above written.
HYDRON TECHNOLOGIES, INC.
by: /s/ Harvey Tauman, President
__________________________________
Harvey Tauman, President
DTR ASSOCIATES LIMITED PARTNERSHIP
by: /s/ Victor N. Grillo, President
__________________________________
Victor Grillo, President of
the General Partner
<PAGE>
EXHIBIT A -- OPTION EXERCISE FORM
Date:________, 199___
Hydron Technologies, Inc.
1001 Yamato Road, Suite 403
Boca Raton, Florida 33431
Att.: President
Re: Option Exercise
Gentlemen:
The undersigned ("Option Holder") hereby exercises the Nonqualified
Stock Option Agreement dated as of May 31, 1996 (the "Agreement") and
hereby subscribes to purchase _______ shares (the "Shares") of common
stock, $.01 par value per share, of Hydron Technologies, Inc. ("Company")
at the exercise price of $.01 per share. As payment for such exercise, the
Option Holder hereby tenders the sum of $_______________.
In accordance with the terms of paragraph no. 3 of the Agreement, and
in order to induce you to issue the Shares, the Option Holder hereby
represents and warrants to the Company as follows:
1. The Option Holder has had the opportunity to as questions of, and
receive answers from, the Company concerning the business and financial
condition of the Company; (ii) the Option Holder has had the opportunity to
review all reports filed by the Company pursuant to Section 13 of the
Securities Exchange Act of 1934 during the fiscal year of the Company prior
to the date of the exercise of this Option; (iii) no warranties or
representations have been made to the Option Holder by any officer,
director, employee or agent of the Company; (iv) the Option Holder has
evaluated the risks of purchasing the Shares; (v) the Option Holder has
determined that the purchase of the Shares is a suitable investment; (vi)
the Option Holder has adequate financial resources for an investment of
such character; (vii) the Option Holder alone or with the Option Holder's
representative, has such knowledge and experience in financial and business
matters that the Option Holder is capable of evaluating the merits and
risks of the purchase of the Shares; and (viii) the warranties and
representations made herein by the Option Holder are accurate, true and
correct, and may be relied upon by the Company in connection with the
issuance of the Shares hereunder to the Option Holder.
2. If the Shares have been registered under Section 5 of the
Securities Act of 1933, as amended (the "Act") for resale to the public,
<PAGE>
then the Option Holder requests that certificates for such shares be issued
in the name of one or more parties other than the Option Holder, as
follows:
_______________________________________
(Please type or print name and address)
_______________________________________
_______________________________________
_______________________________________
(Social Security or tax identification number)
and delivered to
_______________________________________
_______________________________________
_______________________________________
(Please type or print name and address)
and, if such number of Options shall not be all the Options evidenced by
this Agreement, that a new Agreement for the balance of such Options be
registered in the name of, and delivered to, the Option Holder at the
address stated below.
Very truly yours,
DTR ASSOCIATES LIMITED PARTNERSHIP
by: ______________________________
Victor Grillo, President of
the General Partner
Address: 3 Tech Circle
Natick, Massachusetts 01760
Tax I.D. No.:______________
<PAGE>
EXHIBIT 3
AGREEMENT
_________
Pursuant to Rule 13(d)-1(f)(1) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree that only one statement
containing the information required by Schedule 13D need be filed with
respect to the Common Stock, $.01 par value, of Hydron Technologies, Inc.
by Victor N. Grillo and DTR Associates Limited Partnership.
Executed this 3rd day of March, 1997.
/s/ Victor N. Grillo
__________________________________________________
Victor N. Grillo
DTR Associates Limited Partnership
By: DTR Associates, Inc., its sole General Partner
By: /s/ Victor N. Grillo
__________________________________________
Victor N. Grillo
