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EXHIBIT 4.40
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered into
effective as of June 29, 1995, by and between Pollution Research and Control
Corp., a California corporation ("PRCC"), and Xxxxxx X. Xxxxxxxx, Xx.
("Optionee").
WHEREAS, Optionee has been providing valuable services as recognized
by the Company's Board of Directors to PRCC and PRCC is desirous of having
Optionee continue to provide such services to it; and
WHEREAS, PRCC is willing to grant Optionee an option to purchase up to
an aggregate of 40,000 shares of the no par value common stock of PRCC (the
"Common Stock") under the terms and conditions set forth below.
NOW, THEREFORE, the parties agree as follows:
1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter
of separate agreement and not in lieu of other compensation for services, the
right and option (the "Option") to purchase on the terms and conditions set
forth in this Agreement all or any part of up to an aggregate of 40,000 shares
of Common Stock (the "Option Shares").
2. OPTION PRICE. At any time when shares of Common Stock are to
be purchased pursuant to the Option, the purchase price for each Option Share
shall be $.63 (the "Option Price"), and for purposes of record, the bid market
price on this date is $.63.
3. OPTION PERIOD. The option period shall commence on the date
of this Agreement (the "Date of Grant") and shall terminate five (5) years from
the Date of Grant.
4. EXERCISE OF OPTION. The Option may be exercised in whole or
in part at any time by delivering to the Chief Financial Officer of PRCC (a)
a Notice and Agreement of Exercise of Option, substantially in the form
attached hereto as Exhibit "A," specifying the number of Option Shares with
respect to which the Option is exercised, and (b) full payment of the Option
Price for such Option Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), and
no Option Shares may be sold, offered for sale, transferred, pledged,
hypothecated or otherwise disposed of except in compliance with the Act and any
other applicable federal and state securities laws. Additionally, the Option
and the Option Shares have not been qualified under the California Securities
Law of 1968, as amended (the "California Law"). PRCC has no obligation to
register the Option Shares under the Act or qualify the Option Shares under the
California Law. Optionee acknowledges that he is aware that Rule 144 of the
General Rules and Regulations under the Act ("Rule 144") affords a limited
exemption from registration for the public resale of registered securities and
under the terms of Rule 144 as currently in effect, the Option Shares received
by Optionee may be sold to the public without registration only after a period
of two (2) years has elapsed from the exercise date of the Option and then only
in compliance with all other requirements of Rule 144 and the Act. Optionee
hereby acknowledges, represents, warrants and agrees as follows:
(a) That the Option and the Option Shares are not
registered under the Act or qualified under the California Law, and the Option
Shares shall be acquired solely for the account of Optionee for investment
purposes only and with no view to their resale or other
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distribution of any kind;
(b) Neither the Option nor any Option Share shall be sold
or otherwise distributed in violation of the Act, the California Law or any
other applicable federal or state securities law;
(c) His overall commitment to investments that are not
readily marketable is not disproportionate to his net worth, and his investment
in PRCC will not cause such overall commitment to become excessive;
(d) He has the financial ability to bear the economic
risk of his investment, has adequate means of providing for his current needs
and personal contingencies, and has no need for liquidity in his investment in
PRCC;
(e) He either: (i) has a preexisting personal or
business relationship with PRCC or its officers, directors or controlling
persons, or (ii) has evaluated the business of PRCC and the high risks of
investing in PRCC, the competitive nature of the business in which PRCC is
engaged, and has the business or financial experience or has business or
financial advisors who are unaffiliated with, and not compensated by, PRCC and
are able to protect his interests in connection with the transaction;
(f) He has been given the opportunity to review all
books, records and documents of PRCC and to ask questions and receive answers
from PRCC concerning PRCC's business, to obtain additional information
necessary to verify the accuracy of the information he has desired in order to
evaluate his investment, and to consult with such attorneys, accountants and
other advisors as he has desired;
(g) His residence set forth below is his true and correct
residence, and he has no present intention of becoming a resident or
domiciliary of any other state or jurisdiction;
(h) In making the decision to accept the Option and/or
purchase the Option Shares, he has relied solely upon independent
investigations made by or on behalf of him;
(i) No federal or state agency has made any finding or
determination as to the fairness of an investment in PRCC; and
(j) He understands that all the representations and
warranties made by him herein, and all information furnished by him to PRCC,
is true, correct and complete in all respects.
6. Optionee hereby acknowledges that he understands the meaning
and legal consequences of the representations, warranties and covenants
contained herein and that PRCC has relied on the representations made by
Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to
indemnify and hold harmless PRCC and its officers, directors, controlling
persons, attorneys, agents and employees from and against any and all loss,
damage or liability, together with all costs and expenses (including attorneys'
fees and disbursements) which any of them may incur by reason of any breach in
any representation, warranty, covenant or agreement contained herein. All
representations, warranties, covenants and agreements, and the indemnification
contained herein shall survive the grant of the Option and the issuance of the
Option Shares by PRCC.
7. LEGEND OF CERTIFICATES. All Option Shares issued pursuant to
this Agreement shall be subject to the provisions of this Agreement and the
certificates representing such Option Shares shall bear the following legend or
language substantially equivalent thereto:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY
NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY."
8. TRANSFERABILITY OF OPTION. The Option shall not be
transferable except by the laws of descent and distribution and any attempt to
do so shall void the Option.
9. ADJUSTMENT. The Option Price and the number and kind of
Option Shares shall be subject to corresponding adjustment in the event of any
change in the Common stock by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares, readjustment or stock dividend, in
like manner as if such Option Shares had been issued and outstanding, fully
paid and non-assessable at the time of such occurrence.
10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the
rights of a shareholder with respect to the shares covered by the Option except
to the extent that one or more certificates for such Option Shares shall be
delivered to him upon one (1) or more exercises of the Option.
11. NOTICES. Any notices required or permitted to be given
under this Agreement shall be in writing and they shall be deemed to have been
given upon personal delivery or two (2) business days after mailing the notice
by postage, registered or certified mail. Such notice shall be addressed to
the party to be notified as shown below:
PRCC: POLLUTION RESEARCH AND CONTROL CORP.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: President
OPTIONEE: Xxxxxx X. Xxxxxxxx, Xx.
Any party may change its address for purposes of this Section by
giving the other party written notice of the new address in the manner set
forth above.
12. GENERAL PROVISIONS. This Agreement:
(a) Contains the entire agreement between PRCC and
Optionee regarding options of PRCC to Optionee and supersedes all prior
communications, oral or written;
(b) Shall not be construed to give Optionee any rights as
to PRCC or the Common Stock, except as specifically provided herein;
(c) May not be amended nor may any rights hereunder be
waived except by an instrument in writing signed by the party sought to be
charged with such amendment or waiver;
(d) Shall be construed in accordance with, and governed
by, the laws of the State of California; and
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(e) Shall be binding upon and shall inure to the benefit
of PRCC and Optionee, and their respective successors and assigns, except that
Optionee shall not have the right to assign or otherwise transfer his rights
hereunder to any person.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRCC:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxx, Xx.,
President and Chief Executive
Officer
OPTIONEE:
/s/ Xxxxxx X. Xxxxxxxx, Xx.
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EXHIBIT A
To Pollution Research and Control Corp.
NOTICE AND AGREEMENT OF EXERCISE OF OPTION
I hereby exercise the Option granted to me by POLLUTION RESEARCH AND
CONTROL CORP., a California corporation ("PRCC"), dated as of ________________
__________________________as to ____________________________________ shares of
PRCC's no par value Common Stock.
Enclosed are the documents and payment specified in Paragraph 4 of my
Agreement regarding the Option.
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(Print Your Name) Signature
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