Exhibit A
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made as of this 30th day of
July 2001 between XXXXX RESEARCH - XXXXXXXX, INC., a Delaware corporation
("Research-Xxxxxxxx"), TURBOSONIC TECHNOLOGIES, INC., a Delaware Corporation
(the "Company"), and Xx. Xxxxxx X. Xxxxx, Xx., Xxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxx, CVF Technologies Corporation, Xxxx X. Xxxxxx, Zenda and Company, Xxxxxx
X. van Everdingen, Xxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxx, and Xxxxxx X. Xxxxxxxx (collectively, the "Company Shareholders").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto do agree as follows:
ARTICLE I
GRANT OF OPTION
Section 1.1 Grant of Option
In consideration of the Research-Cottrell's execution and delivery of
the Investment Agreement, the consummation of the transactions thereunder and
other good and valuable consideration, on the date hereof the Company
Shareholders each irrevocably grant to Research-Xxxxxxxx the option to purchase
up to an aggregate of 1,900,000 shares of the issued and outstanding common
stock, par value $.10 per share, of the Company (the "Common Stock")
(representing approximately [15%] of the Company's outstanding Common Stock)
upon the terms and conditions set forth in this Agreement (the "Initial
Option").
Section 1.2 Exercise Price
The Initial Option shall be exercisable only in the event that
Research-Xxxxxxxx has made a public tender offer (the "Tender Offer") to all of
the holders of the Company's outstanding Common Stock to purchase an amount of
shares equal to or greater than 1,900,000 shares of Common Stock during the
period commencing on the date hereof and ending on August 31, 2002. The Tender
Offer price for any shares of Common Stock shall be determined by the board of
directors of Research-Xxxxxxxx, subject to their fiduciary duties under
applicable law as advised by counsel, and the opinion of its financial advisor,
in Research-Cottrell's sole discretion. In the event that Research-Xxxxxxxx has
made the Tender Offer but Turbosonic shareholders (including the Company
Shareholders) fail to tender to Research-Xxxxxxxx a total of 1,900,000 shares of
Common Stock, Research-Xxxxxxxx shall have the right and option to purchase from
the Company Shareholders in the amounts provided in Schedule I hereto and at a
purchase price of $1.80 per share, the difference between 1,900,000 and the
number of shares actually tendered to Research-Xxxxxxxx pursuant to the Tender
Offer.
Section 1.3 Control Option
In the event that Research-Xxxxxxxx seeks to acquire an additional
4,500,000 shares (beyond those shares referenced in Section 1.2 above or
otherwise previously acquired by Research-Xxxxxxxx) pursuant to one or more
tender offers, but Turbosonic shareholders (including the Company Shareholders)
fail to tender to Research-Xxxxxxxx 4,500,000 shares of Common Stock, then
Research-Xxxxxxxx shall have the further right and option to purchase up to an
additional 4,500,000 shares of Common Stock (the "Control Option") from the
Company Shareholders in the amounts provided in Schedule I hereto during the
periods and at the exercise prices as follows: from the date hereof through
December 31, 2001, the option exercise price shall be $2.00 per share; from
January 1, 2002 through August 31, 2002, the option exercise price shall be
$2.25 per share; and after August 31, 2002, the option exercise price shall be
$2.50 per share.
Section 1.4. Termination of Company Shareholder Obligation
If at any time during the period commencing on the date hereof and
ending on August 31, 2003, the shares of Common Stock shall trade on the OTC
Bulletin Board or a national securities exchange at a price equal to or greater
than $3.00 per share for a period of thirty (30) consecutive trading days, and
if Research-Xxxxxxxx has not exercised the Control Option set forth in Section
1.3 above, then the obligation of the Company Shareholders to guarantee the
availability of such shares from their respective stockholdings shall be
extinguished.
Section 1.5 Reduction of Number of Shares Subject to Option.
Notwithstanding anything contained herein to the contrary, the Company
Stockholders may tender any or all of their shares of Common Stock in any tender
offer made by Research-Xxxxxxxx to the holders of the Company's Common Stock. If
any Company Stockholder tenders shares in any such tender offer, the aggregate
amounts of shares subject to the Initial Option and the Control Option and the
number of shares to be sold by such Company Stockholder pursuant to the Initial
Option and the Control Option as provided in Schedule I hereto shall each be
reduced by the number of shares tendered by such Company Stockholder.
ARTICLE II
PERIOD OF EXERCISABILITY
Section 2.1 Duration of Exercisability
This Option shall remain exercisable from the date hereof until August
31, 2003.
Section 2.2 Termination of Option
Upon the termination of this Option for any reason, Research-Xxxxxxxx
shall have no further rights to purchase shares of Common Stock from the Company
Shareholders.
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ARTICLE III
EXERCISE OF OPTION
Section 3.1 Person Eligible to Exercise
Only Research-Xxxxxxxx may exercise the Initial Option and the Control
Option.
Section 3.2 Manner of Exercise
The Initial Option and the Control Option may be exercised only after
notice to the Company Shareholders that Research-Xxxxxxxx intends to exercise
the Initial Option or the Control Option and the delivery to the Company
Shareholders of all of the following:
a. a written notice to the Company Shareholders stating
the Option is being exercised. The notice shall be
signed by a duly authorized representative of
Research-Xxxxxxxx; and
b. full cash payment by wire transfer or certified check
of the exercise price to each of the Company
Shareholders; and
c. a written agreement, in a form satisfactory to the
Company Shareholders, signed by Research-Xxxxxxxx
stating that the shares of stock are being acquired
for its own account, for investment and without any
present intention of distributing or reselling said
shares or any of them except as may be permitted
under the Securities Act of 1933 (the "Securities
Act") and then applicable rules and regulations
thereunder, and that Research-Xxxxxxxx shall
indemnify the Company Shareholders and the Company
against, and hold them harmless from, any loss,
damage, expense or liability resulting to any of them
if any sale or distribution of the shares by
Research-Xxxxxxxx is contrary to the representations
and agreement referred to above. The Company
Shareholders may, in their absolute discretion, take
whatever additional actions they deem appropriate to
insure the observance and performance of such
representations and agreement and to affect
compliance with the Securities Act and any other
federal or state securities laws and regulations.
ARTICLE IV
OTHER PROVISIONS
Section 4.1 Restrictions on Transfer
This Option Agreement and the Initial Option and Control Option shall
not be transferred, assigned, pledged or hypothecated other than to an affiliate
of Research-Xxxxxxxx and shall not be subject to execution, attachment or
similar process. For purposes of this Agreement, the term "Affiliate" shall have
the same meaning as set forth in Section 1.1 of the Investment Agreement. In the
event the terms of this paragraph are not complied with by Research-Xxxxxxxx, or
if this Option Agreement is subject to execution, attachment or similar process,
this Option Agreement shall immediately become null and void.
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Section 4.2 Anti-Dilution Provisions
If prior to expiration of the Option Agreement there shall occur any
change in the outstanding common stock of the Company by reason of any stock
dividend, stock split, combination or exchange of shares, merger, consolidation,
recapitalization, reorganization, liquidation, subscription rights, offering or
the like, and as often as the same shall occur, then the kind and number of
shares subject to the Initial Option or the Control Option, or the purchase
price per share of Common Stock, or both, shall be adjusted by the Company in
such a manner as its Board of Directors deems equitable, the Board's
determination of which shall be final and binding.
Section 4.3 Notices
All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile transmission) and shall be given,
if to Turbosonic, to:
Turbosonic Technologies, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx X-00
Xxxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: President
Fax: (000) 000-0000
with a copy to:
White, Xxxxxxx & Xxxxxx
00 Xxx Xxxxxx
Xxxxxxxx, Xxxxxxx X0X0X0
Attention: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
if to Research-Xxxxxxxx, to:
Xxxxx Research-Xxxxxxxx, Inc.
00-00 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxx, Danzig, Scherer, Xxxxxx & Xxxxxxxx LLP
Xxxxxxxxxxxx Xxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
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All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until, the next succeeding business day in the place
of receipt.
Section 4.4 Amendments and Waivers.
Any provision of this Agreement may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.
Section 4.5 Expenses
All costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
Section 4.6 Governing Law
This Agreement shall be governed by and construed in accordance with
the law of the State of New Jersey without regard to the conflicts of law rules
of such state.
Section 4.7 Counterparts; Third Party Beneficiaries
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
Section 4.8 Public Announcements.
The Company and Research-Xxxxxxxx shall agree on the form and content
of any public announcements which shall be made concerning this Agreement or the
transactions contemplated hereby and neither the Company nor Research-Xxxxxxxx
shall make any such public announcement without the consent of the other, except
with respect to any public announcement or other public disclosure, to the
extent either party determines, in good faith and with the advice of counsel,
such announcement or disclosure is required by law or the rules or regulations
of any exchange on which such party's securities are listed or to avoid undue
risk that the transactions contemplated hereby will be enjoined or that such
party, its officers, directors or representatives will be liable for damages as
a result thereof.
Section 4.9 Entire Agreement; Exhibits.
This Agreement constitutes the entire agreement among the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, among the parties with
respect to the subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by any party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder. All exhibits hereto constitute part of this
Agreement and are expressly incorporated herein.
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Section 4.10 Headings.
The headings appearing in this Agreement are inserted only as a matter
of convenience and for reference and in no way define, limit or describe the
scope and intent of this Agreement or any of the provisions hereof.
Section 4.11 Legend
Each certificate representing shares issued pursuant to this Option
shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR STATE SECURITIES LAWS AND NO
TRANSFER OF THE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION THEREFROM
WITH RESPECT TO WHICH THE COMPANY MAY, UPON REQUEST, REQUIRE A SATISFACTORY
OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE
REQUIREMENTS OF THE ACT."
Section 4.12 Conformity to Securities Laws
The parties acknowledge that this Option Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Securities Exchange Act of 1934 and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder.
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IN WITNESS WHEREOF this Agreement has been executed and delivered by
the parties hereto.
XXXXX RESEARCH-XXXXXXXX, INC.
/s/ Luca Finzi
-----------------------------------
President
TURBOSONIC TECHNOLOGIES, INC.
/s/ X.X. Xxxxx
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Chairman & CEO
/s/ Xxxx X. Xxxxxx
-----------------------------------
/s/ Xx. Xxxxxx X. Xxxxx, Xx.
-----------------------------------
/s/ Xxxxxx X. Xxxxx
-----------------------------------
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
/s/ Xxxx Xxxxx
-----------------------------------
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Continuation of Signature Page - Option Agreement - Research-Xxxxxxxx
/s/ Zenda and Company (Xxxxxx Xxxxx)
------------------------------------
/s/ Xxxxxx X. van Everdingen
------------------------------------
/s/ Xxxxxx X. Xxxxx
------------------------------------
/s/ Xxxxxx X. Xxxxxx
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/s/ Xxxxxxx X. Xxxx
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/s/ Xxxxxx X. Xxxxxxxx
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CVF Technologies Corporation
/s/ Xxxxxx Xxxxx
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Secretary, Treasurer and COO
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OPTION AGREEMENT
Between
Xxxxx Research-Xxxxxxxx, TurboSonic Technologies, Inc. and
Certain shareholders of TurboSonic Technologies, Inc.
SCHEDULE I
Shareholder Initial Option Control Option
----------- -------------- --------------
Xx. Xxxxxx X. Xxxxx, Xx. 993,000 1,877,000
Xxxxxxx X. Xxxxx 258,000 487,000
Xxxxxx X. Xxxxx 140,000 265,000
Xxxx X. Xxxxxx 105,000 200,000
Zenda & Company (Xxxxxx Xxxxx) 74,000 141,000
Xxxxxx van Everdingen 26,000 49,000
Xxxx Xxxxx 66,000 124,000
Xxxxxx Xxxxx 13,000 22,000
Xxxxxx Xxxxxx 22,000 38,000
Xxxxxxx X. Xxxx 38,000 72,000
Xxxxxx Xxxxxxxx 35,000 65,000
CVF Technologies Corporation 130,000 320,000
Total 1,900,000 3,660,000
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Common Stock Purchase Agreement
Agreement made as of February 25, 2002 by and between Xxxxx
Research-Xxxxxxxx, Inc., a Delaware corporation having an address at 00-00 Xxxx
Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Purchaser"), and CVF Technologies
Corporation ("Seller"). Seller proposes, subject to the terms and conditions
stated herein, to sell to the Purchaser 450,000 shares of Common Stock, $.10 par
value per share (the "Shares"), of TurboSonic Technologies, Inc., a Delaware
corporation ("TurboSonic"), at a purchase price of thirty five cents ($0.35) per
share, or an aggregate purchase price of $157,500 (the "Purchase Price").
1. In connection with the sale of the Shares to the Purchaser,
the Seller represents, warrants and agrees that:
(a) the Seller has good and marketable title to the Shares
being sold by it hereunder free and clear of all liens, encumbrances, equities,
security interests and claims whatsoever, and upon delivery of and payment of
the Purchase Price for the Shares, the Purchaser will receive good title thereto
free and clear of all liens, encumbrances, equities, security interests and
claims whatsoever; and
(b) all authorizations and consents necessary for the
execution and performance of this Agreement and for the delivery of the Shares
by the Seller have been obtained, and the Seller has full power and authority to
enter into this Agreement and to perform its obligations hereunder.
2. (a) The Purchaser, by reason of its business and
financial experience, has such knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the merits and
risks associated with the Shares and is holding the Shares for its own account,
for investment and not with a view to, or any present intention of, effecting a
distribution of such securities or any part thereof. The Purchaser acknowledges
that the Shares to be received by it hereunder have not been registered under
the Securities Act of 1933, as amended, or the securities laws of any state or
other jurisdiction and cannot be disposed of unless they are subsequently
registered under the Securities Act and any applicable state laws or exemption
from such registration is available. Furthermore, the Purchaser acknowledges
that each certificate representing the Shares contains a legend substantially in
the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold,
transferred or assigned in the absence of an effective
registration statement for these shares under the Securities
Act of 1933 or an opinion of the Company's counsel that
registration is not required under said Act."
(b) The Purchaser is an "accredited investor" (as such term
is defined in Rule 501 of Regulation D promulgated under the Securities Act).
3. The closing of the sale of the Shares shall occur on
February 22, 2002, or as soon thereafter as reasonably practicable (the
"Closing"), by delivery by Purchaser to Seller of the Purchase Price by
certified or bank check or wire transfer of immediately available funds, and by
delivery by Seller to Purchaser of a certificate(s) for the Shares duly endorsed
for transfer with blank stock powers attached.
4. Purchaser and Seller agree that Xx. Xxxxx Sbrola is
entitled to a fee of $3,150.00 payable in cash or by check for arranging this
transaction, which amount is payable at Closing, and that Purchaser and Seller
shall each be responsible for the payment of $1,575.00 to Mr. Sbrola.
5. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns. Except as specifically contemplated hereby, this Agreement shall not be
assignable by either party hereto except with the written consent of the other
party.
6. This Agreement embodies the entire agreement and
understanding between the Seller and the Purchaser relating to the purchase of
the Shares, and supercedes all prior agreements and understandings relating to
the purchase of the Shares.
7. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by a statement in
writing signed by the party or parties against which enforcement of the change,
waiver, discharge or termination is sought.
8. This Agreement shall be construed and governed by the
laws of the State of New Jersey.
9. This Agreement may be executed in one or more
counterparts, each of which when executed shall be an original, but all such
counterparts shall, together, constitute one and the same instrument.
IN WITNESS WHEREOF, the Seller and the Purchaser have executed this
Agreement as of the date first above written.
CVF TECHNOLOGIES CORPORATION XXXXX RESEARCH-XXXXXXXX, INC.
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxxx Xxxxxxxxx
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President Chief Executive Officer
3122346.02
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