<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------------------
AMENDMENT NO. 6
TO
SCHEDULE 13D
(RULE 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
ELECTROPURE, INC.
(Name of Issuer)
Common Stock, $0.01 par value per share
(Title of Class of Securities)
286133
(CUSIP Number)
Catherine Patterson
Electropure, Inc.
23456 South Pointe Drive
Laguna Hills, CA 92653
(949) 770-9347
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 15, 1999
(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 [ ].
(Continued on following pages)
(Page 1 of 7 pages)
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
13D - AMENDMENT NO. 6
CUSIP NO. 286133 PAGE 2 OF 7 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ANTHONY M. FRANK
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
CALIFORNIA, USA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 3,479,742
---------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY NONE
---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,479,742
---------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,479,742, INCLUDING 1,000,000 SHARES OF SERIES B
CONVERTIBLE PREFERRED STOCK
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.4% OF THE COMMON STOCK
100% OF THE SERIES B CONVERTIBLE PREFERRED STOCK
39.9% OF VOTING POWER
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN - 3,399,742
EP - 80,000
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
PAGE 3 OF 7 PAGES
This Amendment No. 6 amends, in relevant part as follows, the Schedule 13D,
filed June 30, 1998, of Anthony M. Frank (the "Reporting Person") with respect
to the common stock, $0.01 par value per share ("Common Stock") of Electropure,
Inc., a California corporation.
ITEM 1. SECURITY AND ISSUER
Common Stock, $0.01 par value, of Electropure, Inc., a California
corporation ("Electropure"). Electropure's principal executive office is located
at 23456 South Pointe Drive, Laguna Hills, California 92653.
ITEM 2. IDENTITY AND BACKGROUND
(a) Anthony M. Frank
(b) 320 Meadowood Court, Pleasant Hill, CA 94523
(c) Retired - former Postmaster General
(d) Not applicable
(e) Not applicable
(f) U.S.A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The $1,000,000 utilized to purchase shares of Electropure, Inc. Series
B Convertible Preferred Stock, as described below, were from Mr. Frank's
personal funds.
ITEM 4. PURPOSE OF THE TRANSACTION
On January 15, 1999, Mr. Frank purchased 1,000,000 shares of
Electropure, Inc. Series B Convertible Preferred Stock, $1 par value, from
Electropure, Inc. and paid therefor the sum of $1 million. Each share of Series
B Stock carries four (4) votes per share and is convertible into the Common
Stock of Electropure, Inc., on a share-for-share basis, at any time at the
option of Mr. Frank. Such Series B Stock shall automatically convert into Common
Stock if either of the following events occur:
(1) Electropure shall make a public offering of any of its
securities under the terms of an Underwriting Agreement with a
securities dealer or underwriter; or
(2) Electropure's securities shall be admitted for listing on a
national securities exchange market system or the NASDAQ System
where its Common Stock may then be traded.
<PAGE> 4
PAGE 4 OF 7 PAGES
Mr. Frank may in the future acquire, hold and dispose of shares of
Common Stock or warrants or options for such Common Stock or other securities of
Electropure and such transactions may be in the open market, privately or
directly from Electropure.
Except as set forth above, Mr. Frank does not have any plans or
proposals which may have, which relate to or which would result in:
(a) The acquisition by any person of additional securities of
Electropure, or the disposition of securities of Electropure;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Electropure or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of
Electropure or any of its subsidiaries;
(d) Any change in the present Board of Directors or management of
Electropure, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the Board;
(e) Any material change in the present capitalization or dividend
policy of Electropure;
(f) Any other material change in Electropure's business or
corporate structure;
(g) Changes in Electropure's charter, bylaws or instruments,
correspondence thereto or other actions which may impede the
acquisition or control of Electropure by any person;
(h) Causing a class of securities of Electropure to be delisted
from a national securities exchange or to cease to be quoted
in an inter-dealer quotation system of a registered national
securities association;
(i) A class of equity securities of Electropure becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) Mr. Frank owns the following shares of Electropure:
2,479,742 shares of Common Stock with one vote per share(1).
1,000,000 shares of Series B Convertible Preferred Stock with
four votes per share.
- --------
(1) Includes warrants for 300,000 shares of Common Stock exercisable at $2.25
per share and 50,000 shares exercisable at $1.25 per share.
<PAGE> 5
PAGE 5 OF 7 PAGES
Mr. Frank owns beneficially 27.4% of the Common Stock (25.7%
if all of the warrants described below are exercised) and 100%
of the Series B Convertible Preferred Stock of Electropure.
Mr. Frank owns 39.9% of the voting power of all classes of
stock of Electropure.
(b) Mr. Frank has the sole voting and dispositive power over the
shares he owns.
(c) Since June 26, 1998, Mr. Frank has entered into the following
transactions with regard to Electropure's Common Stock:
On January 15, 1999, Mr. Frank purchased 1,000,000 shares of
Electropure, Inc. Series B Convertible Preferred Stock from
the Company for $1.00 per share.
The following Warrants are currently exercisable by Mr. Frank:
<TABLE>
<CAPTION>
DATE GRANTED PURCHASE PRICE NO. OF SHARES
------------ -------------- -------------
<S> <C> <C>
12/17/92 $ 1.25 50,000
02/22/96 $ 2.25 300,000
</TABLE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SECURITIES OF THE ISSUER
Mr. Frank has the right, until December 17, 2002 to purchase 50,000
shares of Electropure's Common Stock at $1.25 per share. Additionally, Mr. Frank
has the right, until February 22, 2001 to purchase 300,000 shares of Common
Stock at $2.25 per share.
Pursuant to an August, 1997 License Termination Agreement between the
Company and its former licensee, EDI Components, the Company is obligated to
issue shares to the investors of EDI Components upon the Common Stock of the
Company first having a per share market value for thirty consecutive trading
days equal to or in excess each of $3.00, $4.00 and $5.50 per share (each a
"Trigger Value"). Of such shares, if and when issued by the Company, as an
investor in EDI Components, Mr. Frank is to receive 16,667, 12,501 and 9,090
shares valued at $3.00, $4.00 and $5.50, respectively.
ITEM 7. EXHIBITS
<TABLE>
<C> <S>
10.10.A Subscription Agreement, December 6, 1989 *
10.10.B Subscription Agreement, October 10, 1990 *
10.10.C Subscription Agreement, March 1, 1991 *
10.10.D Warrants for 4,444 shares (Warrant No. 219 - 11/17/89) *
10.10.E Warrants for 2,222 shares (Warrant No. 278 - 10/18/90) *
10.10.F Warrants for 6,250 shares (Warrant No. 299 - 03/27/91) *
</TABLE>
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PAGE 6 OF 7 PAGES
<TABLE>
<C> <S>
10.10.G Warrants for 2,500 shares (Warrant No. 324 - 08/06/92) *
10.10.H Warrants for 3,125 shares (Warrant No. 332 - 08/06/92) *
10.10.I Warrants for 25,000 shares (Warrant No. 361 - 12/18/92) *
10.10.J Warrants for 50,000 shares (Warrant No. 360 - 12/17/92) *
10.10.K Warrants for 20,000 shares (Warrant No. E-1003 - 07/29/92) *
10.10.L Warrants for 2,500 shares (Warrant No. E-1024 - 06/24/93) **
10.10.M Warrants for 5,000 shares (Warrant No. E-1029 - 05/25/94) **
10.10.N Warrants for 5,000 shares (Warrant No. E-1030 - 06/17/94) **
10.10.O Warrants for 4,000 shares (Warrant No. E-1034 - 03/27/95) **
10.10.P Warrants for 300,000 shares (Warrant No. 388 - 02/22/96) **
10.10.Q Stock Right Agreement No. E-1034 **
10.10.R 10% Two-Year Convertible Term Note - 12/31/96 **
10.10.S 10% Two-Year Convertible Term Note - 02/25/97 **
10.10.T 10% Two-Year Convertible Term Note - 04/10/97 **
10.10.U 10% Two-Year Convertible Term Note - 01/26/98 ****
10.10.V 10% Two-Year Convertible Term Note - 02/04/98
(face sheet only) ****
10.47.8 License Termination Agreement dated August 14, 1997 (effective
08/05/97) ***
10.10.W Stock Purchase Agreement - 01/15/99
</TABLE>
- ---------------
* Previously filed in connection with Schedule 13D filed on December 18, 1992
by the Reporting Person.
** Previously filed in connection with Amendment No. 1 to Schedule 13D filed
on June 2, 1997 by the Reporting Person.
*** Previously filed in connection with Issuer's Form 10-QSB for the fiscal
quarter ended July 31, 1997.
**** Previously filed in connection with Issuer's Form 10-KSB for the fiscal
year ended October 31, 1998.
<PAGE> 7
PAGE 7 OF 7 PAGES
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 6 to Schedule 13D
is true, complete and correct.
Dated: February 3, 1999
/S/ ANTHONY M. FRANK
------------------------------
Anthony M. Frank
<PAGE> 8
AMENDMENT NO. 6
TO
SCHEDULE 13D
ANTHONY M. FRANK
(Name of Reporting Person)
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page
Sequentially
Numbered
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<C> <S> <C>
10.10.W Stock Purchase Agreement - 01/15/99
</TABLE>
<PAGE> 1
EXHIBIT 10.10.W; PAGE 1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 15th day of January, 1999, by and between ANTHONY M. FRANK KEOGH
PLAN, UTA CHARLES SCHWAB & COMPANY, INC. (hereinafter referred to as "Buyer")
and ELECTROPURE, INC., a California corporation (hereinafter referred to as
"Electropure" or the "Company").
1. PURCHASE AND SALE OF SHARES
(a) Effective on the date hereof, the Company hereby sells to
Buyer and Buyer hereby purchases One Million (1,000,000) Shares of Electropure,
Inc. Series B Convertible Preferred Stock (the "Shares") with an aggregate value
equal to One Million Dollars ($1,000,000).
(b) The Shares shall have the rights, preferences, privileges,
restrictions and other terms set forth in Exhibit "A" hereto, the Certificate of
Determination for the Series B Convertible Preferred Shares (the "Certificate").
2. REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and
warrants to the Company:
(a) The Shares and any Common Stock which the Shares may be
convertible into (collectively, the "Securities"), are being acquired by Buyer
for investment for an indefinite period, for Buyer's own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and the Buyer has no present intention of selling, granting
participations in, or otherwise distributing the same except as may be permitted
by the Securities Act of 1933, as amended (the "Act").
(b) Buyer does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to the Securities.
(c) That Buyer understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
upon the exemptions from the registration provisions of the Act contained in
Section 4 (2) thereof and Rule 506 promulgated thereunder, and any continued
reliance on such exemption is predicated on the representations of the Buyer set
forth herein.
(d) Buyer understands that the Securities must be held
indefinitely unless the sale or other transfer thereof is subsequently
registered under the Act, as amended, or an exemption from such registration is
available. Buyer further understands that the Company is under no obligation to
register the Securities on its behalf or to assist him in complying with any
exemption from registration except as otherwise provided herein.
1
<PAGE> 2
EXHIBIT 10.10.W; PAGE 2
(e) Buyer (i) has adequate means of providing for his current
needs and possible contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the Securities for an indefinite period, (iv) at the present time,
can afford a complete loss of such investment, and (v) does not have an overall
commitment to investments which are not readily marketable that is
disproportionate to Buyer's net worth, and Buyer's investment in the Shares will
not cause such overall commitment to become excessive.
(f) Buyer is an "accredited investor" (as defined in Regulation D
promulgated under the Act) and the undersigned's total investment in the
Securities does not exceed 10% of the Buyer's net worth.
(g) Buyer recognizes that the Company has had only limited
revenues to date and that the Securities as an investment involve significant
risks.
(h) Buyer will not transfer the Securities without registering
them under applicable federal and state securities laws unless the transfer is
exempt from registration. Buyer realizes that the Company may not allow a
transfer of Securities unless the transferee is also an "accredited investor".
Buyer understands that legends will be placed on certificates representing the
Securities, with respect to the above restrictions on resale or other
disposition of the Securities and that stop transfer instructions have or will
be placed with respect to the Securities so as to restrict the assignment,
resale or other disposition thereof.
(i) The Company will direct its transfer agent to, or will
itself, place such a stop transfer order in its books respecting transfer of the
Securities, and the certificate or certificates representing the Securities will
bear the following legend or a legend substantially similar thereto:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF: (1) AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT, OR (2) AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(j) That Buyer understands that Rule 144, promulgated by the
Securities and Exchange Commission under the Act, may not be currently available
for sale of the Securities, and there is no assurance that it will be available
at any particular time in the future. If and when Rule 144 is available for sale
of the Common Stock underlying the Shares, such sales in reliance upon Rule 144
may only be (i) in limited quantities after the Shares and Common Stock have
been held for one (1) year after the Shares have been sold by the Company, or
(ii) in unlimited quantities beginning two years after the Shares have been sold
by the Company (provided the Buyer is not then an affiliate of the Company), in
each case in accordance with the conditions of the Rule, all of which must be
met (including the requirement, if applicable, that adequate information
concerning the Company is then available to the public). The Company and Buyer
acknowledges that the Company has no obligation to supply the information
required for sales under Rule 144.
2
<PAGE> 3
EXHIBIT 10.10.W; PAGE 3
(k) The Purchase Price to be paid by Buyer to Company for the
Shares has been determined by Buyer as fair and appropriate based solely upon
Buyer's independent investigation and due diligence of the Company, and neither
Buyer nor the Company nor any of their agents, including, without limitation,
any of their officers, directors, employees, accountants and attorneys, has made
any representations or warranties whatsoever in connection with the sale of the
Shares by the Company to Buyer. Buyer has had sufficient opportunity in
connection with the sale of the Shares to review the Company's business and
affairs (including, without limitation, the Company's financial statements and
other information). The Buyer has had answered to his satisfaction any questions
with respect to the Company's business and affairs. Buyer further has had the
opportunity to obtain independent financial, legal, accounting, business, tax
and other appropriate advice with respect to the transactions contemplated by
this Agreement, and is not relying upon the Company or any of its agents in any
manner in connection with same.
3. REGISTRATION RIGHTS The Company agrees to register under the Act all
of the Common Stock issuable upon conversion of the Shares by the Buyer in
connection with the next Registration Statement filed by the Company with the
Securities and Exchange Commission.
4. REPRESENTATIONS AND WARRANTIES OF ELECTROPURE
(a) Electropure is a corporation duly organized and validly existing
under the laws of the State of California without limit as to duration of its
existence, and is authorized and in good standing to do business in no other
state; Electropure has the corporate power and adequate authority, rights and
franchise to own its property and to carry on its business as now conducted;
and, subject to ratification by its Board of Directors, Electropure has the
corporate power and adequate authority to enter into this Agreement.
(b) The execution and delivery of this Agreement and subject to (1)
ratification by the Board of Directors of the Company and (2) filing the
Certificate with the California Secretary of State, the performance of the
provisions of this Agreement are not in contravention of or in conflict with any
law or regulation or any term or provision of Electropure's Articles of
Incorporation or By-Laws and are duly authorized and do not require the consent
or approval of any governmental body or other regulatory authority; and this
Agreement is a valid, binding and legal obligation of Electropure, enforceable
in accordance with the terms herein.
(c) Portions of the proceeds realized by the Company hereby from the
sale of the Shares shall be utilized to redeem 2,600,000 shares of Redeemable
Convertible Preferred Shares of the Company for $0.01 per share.
5. ENTIRE AGREEMENT This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings relating to such subject matter.
6. AMENDMENT This Agreement may not be amended except by written
document executed by the parties.
3
<PAGE> 4
EXHIBIT 10.10.W; PAGE 4
7. SUBJECT HEADINGS Subject headings are included for convenience only
and shall not be deemed part of this Agreement.
8. SEVERABILITY If any provision of this Agreement shall be held
unenforceable as applied to any circumstance, the remainder of this Agreement
and the application of such provision to other circumstances shall be
interpreted so as best to effect the intent of the parties. The parties further
agree to replace any such unenforceable provision with an enforceable provision
(and to take such other action) which will achieve, to the extent possible, the
purposes of the unenforceable provision.
9. GOVERNING LAW This Agreement shall be governed by and construed
under the laws of the State of California in force from time to time.
10. PARTIES BOUND This Agreement is binding on and shall inure to the
benefit of the parties and their respective successors, assign, heirs, and legal
representatives.
11. SURVIVAL The representations, warranties, covenants, and agreements
contained in this Agreement shall survive the consummation of the transactions
contemplated hereby.
12. COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY: ELECTROPURE, INC.
By: /S/ FLOYD H. PANNING
---------------------------------------
Floyd H. Panning, President
23456 South Pointe Drive
Laguna Hills, CA 92653-1512
BUYER: ANTHONY M. FRANK KEOGH PLAN, UTA
CHARLES SCHWAB & COMPANY, INC.
By: /S/ ANTHONY M. FRANK
---------------------------------------
101 Montgomery Street
San Francisco, CA 94104
4
<PAGE> 5
EXHIBIT 10.10.W; PAGE 5
CERTIFICATE OF DETERMINATION
OF
SERIES B CONVERTIBLE PREFERRED SHARES
OF
ELECTROPURE, INC.
----------------------------------------------
The undersigned, Floyd H. Panning and Catherine Patterson, do
hereby certify:
1. That said Floyd H. Panning is, and at all times herein
mentioned was, the duly elected and acting President of Electropure, Inc., a
California corporation, and that said Catherine Patterson is, and at all times
herein mentioned was, the duly elected and acting Secretary of said Corporation;
2. That at a meeting of the Board of Directors of said
Corporation the 13th day of January, 1999, at which meeting there were at all
times present and acting a quorum of the members of the Board of Directors of
said Corporation, the following resolutions were duly adopted:
WHEREAS, the Articles of Incorporation of this Corporation provide for
a class of its authorized shares known as Preferred Stock, comprising one
million (1,000,000) shares of $1.00 par value each, issuable from time to time
in one or more series and no Preferred Stock is issued and outstanding; and
WHEREAS, the Board of Directors of this Corporation is authorized to
fix or alter the dividend rights, dividend rate, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences of any wholly
unissued series of preferred shares, and the number of shares constituting any
such series and the designation thereof, or any of them; and
5
<PAGE> 6
EXHIBIT 10.10.W; PAGE 6
WHEREAS, it is the desire of the Board of Directors of this
Corporation, pursuant to its authority as aforesaid, to fix the rights,
preferences, privileges, restrictions and other matters relating to a series of
said preferred shares;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issue of a series of preferred stock of the Corporation
and does hereby fix and determine the rights, preferences, privileges,
restrictions and other matters relating to said series of preferred
shares as follows:
(a) The preferred shares provided for herein shall be designated
and known as "Series B Convertible Preferred Shares"
(hereinafter referred to as the "Series B Preferred Shares").
(b) The number of shares constituting the Series B Preferred
Shares, shall be one million (1,000,000) shares.
(c) Upon the voluntary or involuntary liquidation, winding up or
dissolution of the Corporation, out of the assets available
for distribution to shareholders the Series B Preferred Shares
shall be entitled to receive, in preference to any payment on
the Common Stock, Class B Common Stock and Convertible
Preferred Stock, only, an amount equal to One Dollar ($1.00)
per share and no more. After the full preferential liquidation
amount has been paid to, or determined and set apart for, the
Series B Preferred Shares, the remaining assets shall be
payable to the Common Stock, Class B Common Stock and
Convertible Preferred Stock. In the event the assets of the
Corporation are insufficient to pay the full preferential
liquidation amount required to be paid to the Series B
Preferred Shares, the Common Stock, Class B Common Stock and
Convertible Preferred Stock shall receive nothing. A
6
<PAGE> 7
EXHIBIT 10.10.W; PAGE 7
reorganization shall not be considered to be a liquidation,
winding up or dissolution within the meaning of this
subdivision (c) and the Series B Preferred Shares shall be
entitled only to the rights provided in the plan of
reorganization and Chapters 12 and 13 of the California
General Corporation Law and elsewhere herein.
(d) A holder of a share of Series B Preferred Shares shall be
entitled to four (4) votes on any and all matters, including
the election of directors, and shall, except as otherwise may
be provided by law, vote as a single class along with the
Common Stock, Class B Common Stock and Convertible Preferred
Stock.
(e) At the option of the respective holders of Series B Preferred
Shares, each one (1) of the Series B Preferred Shares shall be
convertible into one (1) share of Common Stock (the
"conversion ratio") at any time; provided, however, that each
shares of Series B Preferred Shares shall automatically be
convertible into one (1) share of Common Stock upon five days'
written notice from the Corporation if either of the following
events shall occur:
(1) The Corporation shall make a public offering of any
of its securities under the terms of an Underwriting
Agreement with a securities dealer or underwriter; or
(2) The Corporation's securities shall be admitted for
listing on a national securities exchange market
system or the NASDAQ System where its Common Stock
may then be traded.
(f) The Corporation shall reserve and keep reserved out of its
authorized but unissued shares of Common Stock sufficient
shares to effect the conversion of all shares of Series B
Preferred Shares outstanding from time to time. A holder of
Series B
7
<PAGE> 8
EXHIBIT 10.10.W; PAGE 8
Preferred Shares subject to conversion shall deliver the share
certificate to the Corporation at its principal executive
office accompanied, if appropriate, by a written request to
convert, specifying the number of shares to be converted. The
endorsement of the share certificate and the request to
convert shall be in form satisfactory to the Corporation. Upon
the date of such delivery, the conversion is deemed to have
occurred and the person entitled to receive share certificates
for Common Stock shall be regarded for all corporate purposes
from and after such date as the holder of the number of shares
of Common Stock to which he is entitled upon the conversion.
In the event the Series B Preferred Shares are converted
pursuant to subdivision (e)(1) or (2) above, the conversion is
deemed to have occurred on the date fixed in the notice of
automatic conversion given by the Corporation. In the event of
a stock split, reverse stock split, stock dividend,
reorganization or recapitalization affecting the number of
shares of Common Stock outstanding, the conversion ratio set
forth in this subdivision (e) shall be proportionately revised
so as to fairly and equitably preserve the conversion rights
of the Series B Preferred Shares.
(g) Except as provided in subdivision (f) hereof, no holder of the
Series B Preferred Shares shall be entitled as of right to
subscribe for, purchase, or receive any part of any new or
additional shares of any class, whether now or hereafter
authorized, or of bonds, debentures, or other evidences of
indebtedness convertible into or exchangeable for shares of
any class, but all such new or additional shares of any class,
or bond, debentures, or other evidences of indebtedness
convertible into or exchangeable for shares, may be issued and
disposed of by the Board of Directors on such terms and for
such consideration (to the extent permitted by law), and to
such
8
<PAGE> 9
EXHIBIT 10.10.W; PAGE 9
person or persons as the Board of Directors in their absolute
discretion may deem advisable.
RESOLVED, FURTHER, that the President and the Secretary of this
Corporation be, and they hereby are, authorized and directed to prepare
and file a certificate of determination of preferences in accordance
with the foregoing resolution and the provisions of California law.
3. That the authorized number of preferred shares of said
Corporation is one million (1,000,000), and that the number of
preferred shares constituting Series B Preferred Shares, none of which
has been issued, is one million (1,000,000).
IN WITNESS WHEREOF, the undersigned have executed this
certificate this 15th day of January, 1999.
/S/ FLOYD H. PANNING
-----------------------------------------
FLOYD H. PANNING, President of
ELECTROPURE, INC.
/S/ CATHERINE PATTERSON
-----------------------------------------
CATHERINE PATTERSON, Secretary of
ELECTROPURE, INC.
The undersigned, Floyd H. Panning, President, and Catherine
Patterson, Secretary, of Electropure, Inc., a California corporation,
each certifies under penalty of perjury that the matters set out in the
foregoing Certificate of Determination are true and correct.
Executed at Laguna Hills, California, on January 15, 1999.
/S/ FLOYD H. PANNING
-----------------------------------------
FLOYD H. PANNING
/S/ CATHERINE PATTERSON
-----------------------------------------
CATHERINE PATTERSON
9
