<PAGE> 1
As filed with the Securities and Exchange Commission on October 15, 1996
Registration No. _________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------
Pollution Research and Control Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California
--------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
95-2746949
------------------------------------
(I.R.S. Employer Identification No.)
506 Paula Avenue, Glendale, California 91201
(818) 247-7601
-------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Albert E. Gosselin, Jr.
506 Paula Avenue, Glendale, California 91201
(818) 247-7601
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please send copies of all correspondence to:
PATRICIA CUDD, ESQ.
Patricia Cudd & Associates
50 South Steele Street, Suite #222
Denver, Colorado 80209
Telephone: (303) 394-2197
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
1
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================
PROPOSED PROPOSED MAXI-
TITLE OF EACH MAXIMUM MUM AGGREGATE AMOUNT OF
CLASS OF SECURITIES AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED BE REGISTERED PER SHARE (1) PRICE (1) FEE
<S> <C> <C> <C> <C>
Common Stock,
no par value,
underlying Options
(2,815,500 Options) (2) 1,875,000 $1.25 $2,343,750 $ 808.19
Common Stock,
no par value,
underlying Warrants
(1,365,003 Warrants) (2) 1,365,003 $1.25 $1,706,254 $ 588.36
Common Stock,
no par value 1,375,003 $1.25 $1,718,754 $ 592.67
TOTAL 4,615,006 $5,768,758 $1,989.22
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. Pursuant to Rule 457 (c), based upon 1,875,000
shares and 1,365,003 shares of Common Stock underlying Options and
Warrants, respectively, 1,375,003 shares of Common Stock being offered by
Selling Shareholders and the average of the high and low sales prices of
the Common Stock on the NASDAQ SmallCap Market System on September 19,
1996, of $1.25.
(2) Issuable upon exercise of the Options or Warrants. Pursuant to Rule 416,
the number of shares of Common Stock issuable upon exercise of the
Options and Warrants is subject to adjustment in accordance with the
anti-dilution provisions of such Options and Warrants.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
DOCUMENTS INCORPORATED BY REFERENCE:
Certain exhibits to this Registration Statement on Form S-3 as set forth in the
Exhibit Index located at page 30.
2
<PAGE> 3
PROSPECTUS
4,615,006 SHARES OF COMMON STOCK, NO PAR VALUE
POLLUTION RESEARCH AND CONTROL CORP.
This Prospectus relates to an aggregate of 3,240,003 shares of common
stock, no par value per share (the "Common Stock"), underlying the outstanding
options (collectively, the "Options") and warrants (collectively, the "Warrants"
and, individually, a "Warrant") of Pollution Research and Control Corp. (the
"Company") which may be issued upon exercise by the holders of all of the
Options and Warrants on or prior to the various expiration dates thereof
commencing on June 30, 1997, through January 6, 2002. The Options and the
Warrants are exercisable to purchase a total of 1,875,000 shares and 1,365,003
shares of Common Stock, respectively. This Prospectus also relates to a total
of 1,375,003 shares of Common Stock; 1,000,003 of which shares were purchased
collectively by eleven of the fourteen Warrantholders as part of units
(collectively, the "Units" and, individually, a "Unit"), each Unit consisting of
one share of Common Stock and one Warrant exercisable to purchase one share of
Common Stock, 350,000 of which shares were acquired simultaneously with Warrants
by the holder of Warrants exercisable to purchase an aggregate of 300,000 shares
of Common Stock and 25,000 of which shares were issued upon the exercise of
warrants by a former warrantholder. The holders of Options or Warrants who
exercise such Options or Warrants, the Warrantholders who received shares of
Common Stock as part of the Units, one Warrantholder who also purchased shares
of Common Stock and one shareholder who received shares upon the exercise of
warrants previously, are hereinafter collectively referred to as the "Selling
Shareholders." Information regarding the Selling Shareholders is set forth in
this Prospectus under "Selling Security Holders." Information regarding the
holders of the Options and Warrants and the circumstances under which they may
exercise their respective Options and Warrants so as to acquire the underlying
shares of Common Stock, are set forth herein under "Description of Securities."
The Options are exercisable by the holders thereof at prices ranging
from $.55 to $1.50 and the Warrants are exercisable by the holders thereof at
prices in a range from $1.00 to $2.00. The Options and Warrants were issued by
the Company on various dates commencing in May 1991 through September 1996.
After the exercise of the Options and the Warrants and with respect to the
shares of Common Stock included in the Units and received by two shareholders,
one of whom purchased shares of Common Stock and Warrants together and the other
of whom exercised his warrants previously, said shares of Common Stock may be
offered and sold to the public from time to time by the Selling Shareholders, or
by pledgees, donees, transferees or other successors to the Selling
Shareholders, in each case in open market transactions, in private or negotiated
transactions or in a combination of such methods of sale, at fixed prices, at
prices then prevailing on the NASDAQ SmallCap Market System at the time of sale,
at prices related to such prevailing market prices or at negotiated prices. To
the extent required at the time of a particular offer of Common Stock by the
Selling Shareholders, a supplement to this Prospectus will be distributed which
will set forth the number of shares of Common Stock being offered and the terms
of the offering, including the name or names of any underwriters, dealers,
brokers or agents, the purchase price paid by any underwriter for shares of
Common Stock purchased from the Selling Shareholders, any discounts, commissions
and other items constituting compensation from the Selling Shareholders and any
discounts, commissions or concessions allowed or re-allowed to dealers,
including the proposed selling price to the public.
The Selling Shareholders reserve the sole right to accept and, together
with any agent of the Selling Shareholders, to reject in whole or in part any
proposed purchase of the shares of Common Stock. The Selling Shareholders will
pay any sales commissions or other seller's compensation applicable to such
transactions. The Selling Shareholders and agents who execute orders on their
behalf may be deemed to be underwriters as that term is defined in Section 2(11)
of the Securities Act of 1933, as amended (the "Securities Act"), and a portion
of any proceeds of sales and discounts, commissions or other seller's
compensation may be deemed to be underwriting compensation for purposes of the
Securities Act. (See "Plan of Distribution.") This Prospectus also covers such
additional shares of Common Stock as may be issuable to the Selling Shareholders
in the event of a stock dividend, stock split, recapitalization or other similar
change in the Common Stock.
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock by the Selling Shareholders. Prior to such sale of
3,240,003 shares of Common Stock, however, the Company will have received up to
a maximum of $1,828,800 ($.55 to $1.50 per share) from the exercise of
3
<PAGE> 4
the Options and up to a maximum of $1,562,003 ($1.00 to $2.00 per share) from
the exercise of the Warrants referred to above. If all of the Options and
Warrants are exercised on or before their respective expiration dates on June
30, 1997, through January 6, 2002, the Company would receive gross proceeds
aggregating $3,390,803 in cash.
The Company has agreed to pay all costs of the registration of the
shares of Common Stock underlying the Options and Warrants and otherwise being
offered by the Selling Shareholders. Such costs, fees and disbursements are
estimated to be approximately $31,075.
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE SHARES OF COMMON STOCK.
The Company's Common Stock is traded over-the-counter and is quoted
on the NASDAQ SmallCap Market System under the symbol "PRCC." On September 19,
1996, the last sale price of the Common Stock on the NASDAQ SmallCap Market
System was $1.25.
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
__________
The date of this Prospectus is October , 1996.
4
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed with the Commission by the Company
may be inspected and copied at the public reference facilities maintained by
the Commission at its principal offices at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials can also be obtained at prescribed rates from the
Public Reference Section of the Commission at its principal offices in
Washington, D.C., set forth above. Additional information with respect to this
offering may be provided in the future by means of supplements or "stickers" to
the Prospectus.
The Company has filed a Registration Statement on Form S-3 (including
all amendments and supplements thereto, the "Registration Statement") with the
Commission under the Securities Act with respect to the shares of Common Stock
underlying the Options and Warrants and otherwise being offered hereby by the
Selling Shareholders. This Prospectus, which forms a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the Exhibits filed therewith, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission.
Statements contained herein concerning the provisions of such documents are not
necessarily complete and, in each instance, reference is made to the
Registration Statement or to the copy of such document filed as an Exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. Copies of the
Registration Statement and the Exhibits thereto can be obtained upon payment of
a fee prescribed by the Commission or may be inspected free of charge at the
public reference facilities and regional offices referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995, the Company's Quarterly Reports on Form 10-QSB for the
quarters ended March 31 and June 30, 1996, and the Current Reports on Form 8-K
dated May 31 and June 19, 1996, as amended, which were previously filed with
the Commission (File No. 0-14266), are incorporated by reference in this
Prospectus and the Registration Statement of which it is a part.
5
<PAGE> 6
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the shares of Common Stock, shall be deemed
to be incorporated by reference herein and to be part hereof from the
respective dates of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or the Registration
Statement of which it is a part.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
verbal request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents.
Requests should be addressed to: Secretary, Pollution Research and Control
Corp., 506 Paula Avenue, Glendale, California 91201; telephone number (818)
247-7601.
THE COMPANY
The Company primarily designs, manufactures and markets electronic
analytical instruments used to detect and measure various types of air
pollution, such as "acid rain," "ozone depletion" and "smog episodes" through
its wholly-owned subsidiary, Dasibi Environmental Corp. The Company's products
are generally used to measure air pollution levels in geographic areas which
range in size from small industrial sites to entire states or countries. The
Company also supplies computer-controlled calibration systems that verify the
accuracy of its instruments, data loggers to collect and manage pollutant
information and final reporting software for remote centralized applications.
The Company's instruments have been sold during the past three years to over
300 customers worldwide, including industrial manufacturers; federal, state,
city, local and foreign governmental agencies; major industrial companies; and
educational and research institutions in over 30 countries. These customers
use the Company's products principally for environmental protection compliance
programs.
The Company intends to continue its sales growth by adapting its
existing technologies for new pollution measurement applications and acquiring
or developing new related technologies. The Company intends to expand its
market share by concentrating a large portion of its marketing efforts in
foreign countries, particularly the Peoples' Republic of China.
In June 1996, the Company acquired all of the issued and outstanding
common stock of two private companies, one of which, Nutek, Inc. ("Nutek"), a
Florida corporation, has been engaged in the design, manufacture and marketing
of electrical and instrument control panels used in utility plant and pulp and
paper mill automation and other industrial process applications for
approximately twenty-five years and the other of which, Logan Medical Devices,
Inc. ("LMD"), is a start-up Colorado corporation which applies the Company's
technology to the design and manufacture of non-invasive medical instrumentation
used in asthma diagnostic and treatment applications. Although LMD intends to
seek, it does not at this time have, clearance from the U.S. Food and Drug
Administration for full-scale marketing of its medical instrumentation in the
United States. The Company presently derives approximately 30% and 5% of its
total revenue from sales of Nutek's and LMD's products, respectively.
The Company's principal executive offices are located at 506 Paula
Avenue, Glendale, California 91201, and its telephone number is (818)
247-7601.
The Company's Common Stock is traded in the over-the-counter market
and reported on the NASDAQ SmallCap Market System under the symbol "PRCC."
THE OFFERING
<TABLE>
<S> <C>
Being Offered by Selling Shareholders . . . . . . . . 4,615,006 shares of Common Stock
Upon Exercise of the Options . . . . . . . . . . . 1,875,000 shares of Common Stock
Upon Exercise of the Warrants . . . . . . . . . . . 1,365,003 shares of Common Stock
</TABLE>
6
<PAGE> 7
USE OF PROCEEDS
The Company will receive no proceeds from the sale of the shares of
Common Stock underlying the Options and the Warrants and otherwise being offered
by the Selling Shareholders, but will receive proceeds upon the exercise of the
Options and Warrants. If all of the outstanding Options and Warrants are
exercised at exercise prices in a range from $.55 to $2.00 per Option or
Warrant, the proceeds to the Company will be approximately $3,390,803. The
Company will use the proceeds from the exercise of the Options and Warrants for
the following purposes:
<TABLE>
<CAPTION>
Application Amount Percent
------------------------- ---------- -------
<S> <C> <C>
Working Capital $1,390,803 41.0%
Research and Development* 1,000,000 29.5%
Marketing 1,000,000 29.5%
---------- ------
$3,390,803 100.0%
</TABLE>
_________________
*To be used to accelerate two research and development projects, one of
which, the development of an innovative continuous emission monitoring system,
is in the prototype stage and the other of which involves the development of a
flue gas purification system.
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in and incorporated into this Prospectus and the
Registration Statement of which it is a part, the following factors before
purchasing the shares of Common Stock offered hereby.
1. Liquidity. The Company has experienced cash shortages from time
to time preventing it from paying its operating expenses on a timely basis or
forcing management to raise funds from private sources for equity or debt
financing or, if available, bank loans. The Company has historically financed
operations through bank borrowings and the issuance of Common Stock in both
public and private offerings. Working capital, on a consolidated basis, at June
30, 1996, was $2,927,595 for the Company and its wholly-owned subsidiaries,
Nutek and LMD, acquired in June 1996. The Company has no sources of financing
presently except the proceeds of this offering and its bank line of credit in
the amount of $300,000. Any amounts borrowed bear interest at the prime rate
plus 2% per annum and are due and owing on June 3, 1997. The sum of $250,000 is
outstanding as of the date hereof. While the Company is presently seeking to
increase its bank line of credit, there can be no assurance that such an
increase can be obtained when and if the Company experiences working capital
shortages in the future. The sum of $1,390,803, representing 41.0% of the
maximum amount of the proceeds which may be received by the Company upon the
exercise of the Options and Warrants by the Selling Shareholders, has been
allocated for working capital for general corporate purposes. This funding,
which is not assured, will result in the dilution of the equity of existing
shareholders upon the issuance of shares of Common Stock to the Selling
Shareholders who exercise their Options or Warrants. If additional funding is
required, it may not be available upon terms acceptable to the Company and/or
the Company may be required to forego a substantial interest in its revenues or
further dilute the equity of existing shareholders.
2. Increase in Net Loss and Net Loss Per Share. While the
Company's net revenue increased marginally (approximately 7.0%) from $5,128,527
for fiscal 1994 to $5,515,505 for fiscal 1995, the Company's net loss
($(597,318)) and net loss per share ($(.09)) for fiscal 1995 increased
7
<PAGE> 8
significantly as compared to the net loss ($(101,737)) and net loss per share
($(.01)) for fiscal 1994. These increases in the Company's net loss were
principally attributable to an approximate 7% decrease in gross margin, an
approximate 5% increase in selling, general and administrative expenses and the
$164,605 loss on the Company's joint venture with LMD. The results of the
Company's operations from its primary business of designing, manufacturing and
marketing automated continuous monitoring instruments used in the detection and
measurement of air pollution and, particularly, the gross margin on its
products, continue to be adversely affected by competitive price pressures in
the air pollution instrumentation industry. The Company's gross profit margin
has continued to decrease from 45% to 41% to 34% of net revenues in each of
fiscal years 1993, 1994 and 1995, respectively. In response to these
significant, continuous competitive price pressures for the Company's
instruments, the Company has been forced to continue its policy of lowering its
domestic and foreign bids, thus reducing the profit margin on the bids awarded
to the Company. Further, the Company's efforts, commenced in the third quarter
of fiscal 1994, to implement certain measures to reduce its operating expenses,
suspend major new product development and scale back the improvement or
modification of existing technologies have continued in response to these
unabated competitive price pressures. Further measures to reduce fixed expenses
were implemented by the Company in March 1996 in the form of its participation
in the Mexican Maquiladora program, initially, for all production labor
associated with the Company's backlog. The Company realized a significant
increase in net revenues in the amount of $1,929,848 and net income in the sum
of $221,646 for the quarter ended June 30, 1996, as compared to $1,434,302 in
net revenues and $19,519 in net income for the quarter ended June 30, 1995, and
net revenues in the sum of $3,558,894 and net income in the amount of $480,801
for the six months ended June 30, 1996, as compared to $2,903,344 in net
revenues and $155,510 in net income for the six months ended June 30, 1995.
Although the Company experienced a significant improvement in revenues and
profits in the three- and six-month periods ended June 30, 1996, primarily
because of the acquisition of Nutek, there can be no assurance that revenues and
profits will not decline in the future.
3. Significant Additional Debt Resulting From Recent Acquisitions
of Nutek and LMD; Profitability of Acquisitions Not Assured. Effective as of
June 19, 1996, the Company acquired all of the issued and outstanding shares of
common stock, $1.00 par value per share, of Nutek, a privately-held Florida
corporation, and effective as of June 25, 1996, the Company acquired all of the
issued and outstanding shares of common stock, $.01 par value per share, of LMD
which, in turn, acquired all of the issued and outstanding one pound ordinary
shares of Logan Research Ltd. ("LRL"), a private United Kingdom company limited
by shares. The purchase price for Nutek, an approximately twenty-five year old
manufacturer of electrical and instrument control panels for utility plant and
pulp and paper mill automation and other industrial process control
applications, was approximately $1,929,669, approximately $315,184 (inclusive of
acquisition costs) of which was paid by the Company in cash, approximately
$1,285,069 of which represented asset-based financing based on Nutek's assets by
an unaffiliated lender, $150,000 of which was financed by the sellers and the
balance of which purchase price was miscellaneous debt incurred or assumed by
the Company. Additionally, the Company granted options exercisable to purchase
an aggregate of 340,000 shares of Common Stock of the Company at an exercise
price minimally above the bid price for the Common Stock on the date of grant,
in connection with the acquisition of Nutek. LMD, a Colorado corporation, is
essentially a start-up company engaged in the manufacture of medical
instrumentation for non-invasive asthma diagnostic applications. The Company's
and LMD's acquisitions of LMD and LRL, respectively, involved the payment by the
Company of approximately $284,000 in cash (inclusive of acquisition costs),
$250,000 of which was received by LMD; LMD's issuance of promissory notes
aggregating $300,000 in principal amount to the former shareholders of LRL; and
the issuance by the Company of options exercisable to purchase an aggregate of
600,500 shares of the Company's Common Stock in exchange for the shares of
common stock of LMD not already owned by the Company. While the Company
reported its acquisition of Nutek on the Current Report on Form 8-K, as amended,
dated June 19, 1996, the balance sheet and operating results of LMD and LRL were
not deemed to be material to the consolidated financial position or operations
of the Company. There can be no assurance that the above-described acquisitions
by the Company of Nutek and LMD will prove to be profitable or that the Company
will be capable of operating the combined entities in a manner so as to ensure
timely service of the sizable debt totaling approximately $1,614,485 and
$300,000 incurred and/or assumed by the Company and LMD, respectively, in order
to effect the business combinations.
4. Reliance on One Product Line; Dependence on Major Types of
Customers. Approximately 29% of the Company's revenues are derived from the
sale of its line of ozone monitors, a decrease of approximately 16% since the
Company's purchase of Nutek and LMD. Any substantial decrease in demand for
this product could have a material adverse effect upon the business of the
Company. During the fiscal years ended December 31, 1995 and 1994, sales to one
and two multi-customer overseas distributors represented 16% and 24% of net
sales, respectively. While there has been no significant change in recent years
in the percentage of revenue contributed by foreign and domestic government
agencies (approximately 45%), foreign distributors (approximately 45%) and
industrial companies and research facilities (10%), a significant loss in the
number of government agencies, industrial companies or research agencies which
typically purchase the Company's instruments could have a material adverse
effect on the Company.
5. Risks of New Product Line. As part of its expansion strategy,
the Company intends to enter the market for continuous emission monitoring
systems ("CEMS"), or air pollution instrumentation systems, although it is
extremely competitive and the Company's competitors in such market have
substantially greater experience and financial resources than the Company. Until
recently, the Company's products were not applicable to the source
instrumentation market. However, because of new governmental regulations
requiring greater accuracy and dilution conditioning as a standard (reducing
pollution concentrations to the parts per billion level) for source
instrumentation involving a CEMS, the Company's products are now applicable. The
Company is not currently able to offer customers a CEMS because it does not
manufacture the additional equipment needed to complete the system. The Company
commenced a research and development program in July 1992 for the purpose of
developing an innovative CEMS which is currently in the prototype stage of
development. The sum of $1,000,000 (29.5%) of the proceeds which may be
received by the Company from the exercise by the Selling Shareholders of their
Options or Warrants, the receipt of which funding is not assured, has been
allocated by the Company for the continuation of the development of an
innovative CEMS or any other research and development activities. While the
Company does not require EPA approval of any of its instruments in order to
complete a CEMS, there can be no assurance that the Company's efforts to enter
the CEMS market will be successful.
6. Governmental Approval. The Company must obtain approval by the
U.S. Environmental Protection Agency ("EPA") of new air pollution monitoring
instruments it produces before such instruments can be sold in the United
States. Currently, all air pollution monitoring instruments that the Company
sells in the United States have received EPA approval. However, if the Company
were to invest in the development of new air pollution monitoring instruments in
the future that did not receive approval of the EPA, the Company would not be
able to sell such instruments in the United States and such inability could have
an adverse effect on the Company's business. With the exception of West Germany,
no foreign country requires governmental
8
<PAGE> 9
approval of air pollution monitoring instruments. While the Company's ozone
and carbon monoxide monitors have received the approval of the West German
equivalent of the EPA, the sulfur dioxide monitor is currently being tested.
The failure to receive such approval for the Company's other air pollution
monitoring instrument(s) would have a material adverse effect on the Company's
business efforts in West Germany. The U.S. Food and Drug Administration
("FDA") regulates the development, testing, manufacture and marketing of medical
devices, including the non-invasive medical device used in asthma diagnostic
and treatment applications presently being manufactured and marketed outside
the United States by LMD. Full-scale marketing of this device within the
United States therefore must be preceded by clearance from the FDA following
successful completion of clinical evaluation programs. Compliance with FDA
regulations is expected to consume substantial amounts of time, may be
expensive and may preclude LMD from operating profitably or without additional
financial assistance from the Company. Further, there can be no assurance that
LMD will ultimately be successful in obtaining FDA clearance for its medical
instrumentation.
7. Dependence On Legislation and Regulation. The majority of the
products developed and manufactured by the Company monitor air pollutants in
accordance with standards established generally by federal, state, local and
foreign governmental agencies. Changes in legislation or regulations or a
relaxation of standards determined by such agencies could adversely affect the
market for the Company's products. In 1982 and 1983, the Company experienced a
decrease in demand for its products which it attributes to a relaxation in such
standards by the federal government.
8. Competition. Management believes that the Company is the
smallest competitor in the ambient air pollution instrumentation market. There
are other established firms in the same field, both in the United States and in
foreign countries, which have substantially greater experience and financial and
personnel resources than does the Company. Furthermore, unlike a number of its
principal competitors, the Company is presently unable to offer its customers a
CEMS. Therefore, it is subject to the effects of better-financed competitors
and their research and development efforts, and price discounting. The Company
competes on the basis of technical advances in its products and its reputation
among customers as a quality provider of products and services and, to a lesser
extent, on the basis of price. Although the Company is not aware of any other
company that competes with it in all of its product lines, all of its
competitors have resources substantially greater than those of the Company.
There are also smaller companies that specialize in a limited number of the
types of products manufactured by the Company. The Company's primary
competitors in the domestic market are Thermo Instrument Systems, Inc. ("Thermo
Instrument Systems"), and Monitor Labs, Inc. ("Monitor Labs"). In the foreign
market, the Company's primary competitors are Thermo Instrument Systems, Monitor
Labs and Kimoto Instruments Co. of Japan. All of the Company's competitors also
offer a wider range of equipment, monitoring additional pollutants, than does
the Company. Although Nutek has engaged in business for the past approximately
twenty-five years prior to its acquisition by the Company in June 1996, the
Company expects that Nutek will face intense competition from the numerous
well-established, large and mid-sized suppliers of the electrical and instrument
control panels and other products, such as electronic and graphic display
systems, sheetmetal enclosures and printed circuit boards, which it
manufactures. The Company further anticipates that LMD will encounter
competition from one or more competitors, any of which are likely to be far
better capitalized than LMD, in the event that it succeeds, no assurance of
which can be made, in obtaining clearance from the U.S. Food and Drug
Administration for its non-invasive medical device used in asthma diagnostic and
treatment applications.
9. Technological Obsolescence; Limited Research and Development.
The markets served by the Company are characterized by rapid technological
advances, downward price pressure in the marketplace as technologies mature,
changes in customer requirements and frequent new product enhancements. The
Company's business requires substantial ongoing research and development
efforts and expenditures, and its future success will depend on its ability to
enhance its current products, reduce product costs and develop and introduce
new products that keep pace with technological developments in response to
evolving customer requirements. The Company's failure to anticipate or respond
adequately to technological development or introduction could result in a loss
of anticipated future revenues and impair the Company's competitiveness. In
the past, the Company has actively engaged in research and development in order
to produce new products. A total of 29.5% of the proceeds to be received by the
Company upon the exercise of the Options and Warrants, of which there is no
assurance, has been allocated for the continuation of the Company's two ongoing
research and development projects involving the development of an innovative
CEMS and a flue gas purification system. The Company spent only $79,898 of its
own funds on research and development, including the foregoing projects, in the
six-month period ended June 30, 1996, as compared to $117,983 spent during the
identical period in fiscal 1995 (an approximate one-third decrease). Research
and development costs were $238,345 in 1995 as compared to $235,953 in 1994.
9
<PAGE> 10
10. Risks of Foreign Sales. During the last three fiscal years,
foreign sales have represented approximately 55% to 70% of the Company's total
revenue and are expected to represent a significant portion of the Company's
future sales, including sales of Nutek's and LMD's products. Foreign sales are
subject to numerous risks, including political and economic instability in
foreign markets, restrictive trade policies of foreign governments, inconsistent
product regulation by foreign agencies or governments, the imposition of product
tariffs and the burdens of complying with a wide variety of international and
U.S. export laws and differing regulatory requirements. To date, the Company's
foreign sales have been transacted in U.S. dollars only. To the extent,
however, that future foreign sales are transacted in a foreign currency, the
Company would be subject to the risk of losses due to foreign currency
fluctuations and difficulties associated with accounts receivable collection.
11. Reliance on Certain Suppliers. While the Company manufactures
many components and subsystems for use in its products and, with the acquisition
of Nutek, the Company will no longer be dependent upon outside sources for
printed circuit boards, other components, including packaging materials,
integrated circuits, microprocessors and minicomputers, are purchased from
unaffiliated suppliers. The Company is generally not dependent upon any one
supplier for any raw material or component which it purchases, and currently
there are available alternative sources for such raw materials and components.
The Company is currently dependent, however, on a limited number of vendors with
respect to the availability and quality of certain key instrument components,
such as lamps. A vendor's inability to supply these components to the Company
in a timely fashion, or to the Company's satisfaction, can affect the Company's
ability to deliver its instruments on time.
12. Limited Marketing Capability. The Company's success depends in
large part upon its ability to identify and adequately penetrate the markets for
its products. As compared to the Company, most of its competitors have much
larger budgets for marketing, advertising and promotion. Proceeds in the amount
of $1,000,000 (29.5%) from the exercise of Options or Warrants by the Selling
Shareholders, the receipt of which cannot be assured, has been allocated for
marketing. This amount of additional funding would nevertheless be insufficient
to enable the Company to undertake a comprehensive national or foreign marketing
and advertising campaign. The Company has historically lacked the financial,
personnel and other resources required to compete with its larger,
better-financed competitors in marketing its instruments. While the Company
expects to realize certain economics of scale in areas such as marketing through
its recent acquisitions of Nutek and LMD, management nevertheless anticipates
that the results of the operations of Nutek and LMD may also be adversely
affected by the Company's limited marketing capability.
13. Dependence on Key Personnel. Management believes that the
Company's success depends in part upon its ability to attract and/or retain
highly skilled management, technical and marketing personnel. Loss of the
services of Albert E. Gosselin, Jr., President, Chief Executive Officer and
Chairman of the Board of Directors of the Company, could adversely affect the
development of the Company's business and its ability to realize or sustain
profitable operations. Further, loss of the services of Ronald Bruce
Logan-Sinclair, President and Chief Executive Officer of LMD and LRL, could
cause the loss to the Company of the approximately $284,000 paid in June 1996 in
connection with the acquisitions of LMD and LRL. However, Mr. Gosselin,
together with Cynthia L. Gosselin, the Company's Chief Financial Officer, have
employment contracts with the Company and Mr. Logan-Sinclair has an employment
agreement with LMD and LRL. The Company does not maintain key-man life
insurance on any of its personnel.
14. Limited Protection of Intellectual Property and Proprietary
Rights. The Company regards all or portions of the designs and technologies
incorporated into its products as proprietary and attempts to protect them with
a combination of trademark and trade secret laws, employee and third-party
nondisclosure agreements and similar means. It has generally been the Company's
policy to proceed without patent protection since it is management's belief that
the disclosure requirements of the federal patent laws provide competitors with
easy access to the secrets of rapidly changing technology. Despite these
precautions, it may be possible for unauthorized third parties to copy certain
portions of the Company's products or to "reverse engineer" or otherwise obtain
and use to the Company's detriment information which the Company regards as
proprietary. Moreover, the laws of some foreign countries do not afford the
same protection to the Company's proprietary rights as do U.S. laws. There can
be no assurance, therefore, that any of these
10
<PAGE> 11
protections will be adequate or that the Company's competitors will not
independently develop technologies that are substantially equivalent or superior
to the Company's technologies.
15. Absence of Products Liability Insurance. The Company does not
maintain products liability insurance since it does not perceive a risk of
liability to which it may be exposed. Management has no present intention of
modifying this policy despite the recent acquisitions of LMD or LRL because the
activities of these companies are presently limited to the manufacture and
marketing of a medical device used in non-invasive asthma diagnostic
applications which, in any event, will require clearance from the U.S. Food and
Drug Administration prior to full-scale commercial marketing within the U.S. The
Company has never had a products liability claim; however, in the event that the
Company experiences a material liability as a result of a products liability
claim, such a liability could have a material adverse effect on the Company.
16. Possible Volatility of Stock Price. The trading price of the
Company's Common Stock has from time to time fluctuated widely and in the future
may be subject to similar fluctuations in response to quarter-to-quarter
variations in the Company's operating results, announcements of technological
innovations or new products by the Company or its competitors, general
conditions in the air pollution monitoring industry in which the Company
competes and other events or factors. In addition, in recent years broad stock
market indices, in general, and the securities of technology companies, in
particular, have experienced substantial price fluctuations. Such broad market
fluctuations also may adversely affect the future trading price of the Common
Stock. In addition, sales of substantial amounts of shares of Common Stock in
the public market following this offering could adversely affect the future
trading price of the Common Stock. (See "MARKET INFORMATION.")
17. Possible Dilutive Effect of Outstanding Warrants and Options.
As of the date hereof, there are an aggregate of 3,240,003 shares of Common
Stock reserved for issuance upon the exercise of outstanding Options and
Warrants currently exercisable at prices in a range from $.55 to $2.00. To the
extent that the trading price of the Common Stock at the time of the exercise of
any such Options and Warrants exceeds the exercise price, such exercise will
have a dilutive effect on the Company's shareholders. In connection with the
purchase by Neil C. Sullivan of 350,000 shares of the Company's Common Stock and
a warrant exercisable to purchase 300,000 shares of Common stock at an exercise
price of $1.00 per share through September 20, 1999 (see "DESCRIPTION OF
SECURITIES - Miscellaneous Warrants"), the Company has undertaken to amend this
Prospectus, as required, in order to maintain an effective registration
statement to cover the offer and sale of the Common Stock issued to Mr. Sullivan
or issuable upon the exercise of the Warrant granted to him, during the period
of three years from the effective date of the Registration Statement of this
Prospectus forms a part. The cost to the Company of maintaining such
registration could be substantial and could adversely affect the Company's
ability to obtain financing.
18. Dividend Policy. The Company plans to retain earnings for the
purpose of expanding business opportunities and does not believe it will pay
dividends to its shareholders in the foreseeable future. Investors should
refrain from purchasing the shares of Common Stock offered hereby if they
anticipate the need for immediate or future income from dividends. (See
"DESCRIPTION OF SECURITIES - Capital Stock - Common Stock.")
11
<PAGE> 12
PLAN OF DISTRIBUTION
The shares of Common Stock may be offered and sold from time to time
by the Selling Shareholders or by pledgees, donees, transferees or other
successors in interest. The Selling Shareholders will act independently of the
Company in making determinations with respect to the timing, manner and size of
each offer or sale. Such sales may be made on the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market prices, or in negotiated transactions.
The Selling Shareholders may sell shares of Common Stock in any of the
following ways: (i) through dealers; (ii) through agents; or (iii) directly to
one or more purchasers. The distribution of the shares of Common Stock may be
effected from time to time in one or more transactions (which may involve
crosses or block transactions) in the over-the-counter market. Any such
transaction may be effected at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at negotiated prices or at
fixed prices. The Selling Shareholders may effect such transactions by selling
shares of Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from Selling Shareholders and/or commissions from purchasers of shares of
Common Stock for whom they may act as agent. The Selling Shareholders and any
broker-dealers or agents which participate in the distribution of Common Stock
by them might be deemed to be underwriters and any discounts, commissions or
concessions received by any such broker-dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
In offering the shares of Common Stock, the Selling Shareholders and
any broker-dealers and any other participating broker-dealers which execute
sales for the Selling Shareholders may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Shareholders and the compensation of such
broker-dealers may be deemed to be underwriting discounts and commissions. In
addition, any shares of Common Stock covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant
to this Prospectus.
Rule 10b-2 under the Exchange Act prohibits persons who are
participating in or financially interested in a distribution of securities from
making payments to another person for the solicitation of a third party to
purchase the securities that are the subject of the distribution, except that
Rule 10b-2 does not apply, among other exceptions, to brokerage transactions
not involving the solicitation of customer orders. Rule 10b-6 under the
Exchange Act prohibits participants in a distribution from bidding for or
purchasing, for an account in which the participant has a beneficial interest,
any of the securities that are the subject of the distribution. Rule 10b-7
governs bids and purchases made in order to stabilize the price of a security
in connection with a distribution of the security.
The public offering of the Common Stock by the Selling Shareholders
will terminate on the date on which all shares of Common Stock offered hereby
have been sold by the Selling Shareholders, or on such earlier date on which
the Company files a post-effective amendment which de-registers all shares of
Common Stock then remaining unsold.
The Company will pay certain expenses incidental to the offering and
sale of the shares of Common Stock to the public estimated to be approximately
$31,075. The Company will not pay
12
<PAGE> 13
for, among other expenses, selling expenses, underwriting discounts or fees and
expenses of counsel for the Selling Shareholders.
To the extent required at the time a particular offer of Common Stock
by the Selling Shareholders is made, a supplement to this Prospectus will be
distributed which will set forth the number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers, brokers or agents, the purchase price paid by any
underwriter for shares of Common Stock purchased from the Selling Shareholders,
any discounts, commissions and other items constituting compensation from the
Selling Shareholders and any discounts, commissions or concessions allowed or
re-allowed to dealers, including the proposed selling price to the public.
The Company will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Shareholders.
MARKET INFORMATION
The Company's Common Stock is traded over-the-counter and reported on
the NASDAQ SmallCap Market System under the symbol "PRCC." Set forth below are
the high and low closing bid quotations in the over-the-counter market for the
Common Stock as reported by the relevant market makers for fiscal years 1995 and
1994 and the quarters ended March 31 and June 30, 1996. The high closing bid
quotation (which was identical to the low closing bid quotation) in the
over-the-counter market reported by the relevant market makers on September 19,
1996, was $1.25 for the Common Stock. Quotations represent inter-dealer
quotations, without adjustment for retail mark-ups, mark-downs or commissions,
and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
Fiscal 1996 Fiscal 1995 Fiscal 1994
Quarter Ended High Bid Low Bid High Bid Low Bid High Bid Low Bid
- ------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock:
March 31 $ .69 $ .62 $ .69 $.62 $2.38 $1.50
June 30 1.67 1.44 .91 .59 1.95 1.25
September 30 1.22 .62 1.25 .75
December 31 .88 .56 .78 .44
</TABLE>
As of September 19, 1996, the approximate number of shareholders of
record of the Company's Common Stock was 1,100. The Company has never paid or
declared any dividends on its Common Stock and does not anticipate paying
dividends in the foreseeable future.
The Company cannot predict the market price for the Common Stock upon
the commencement or the completion of this offering. Since the market for the
Company's Common Stock is thinly traded, the exercise of the Warrants and
Options and sales of the underlying shares of Common Stock could cause the
Common Stock to trade at levels lower than would otherwise be anticipated.
13
<PAGE> 14
SELLING SECURITY HOLDERS
Of the 4,615,006 shares of Common Stock being offered hereby, 2,000,006
shares of Common Stock, including 1,000,003 shares underlying Warrants
exercisable at an exercise price of $1.00 per share through June 14, 1999, are
being offered collectively by eleven individuals who purchased Units, each Unit
consisting of one share and one Warrant, in the Company's private placement
completed in June 1996. An additional 1,300,000 shares of Common Stock
underlying options exercisable during the period from January 31, 1997, through
May 29, 2000, at exercise prices of $.94 or $1.25 per share may be offered by
Liviakis Financial Communications, Inc., an affiliate of one Unitholder, and
Robert B. Prag, another Unitholder who serves as an officer of Liviakis
Financial Communications, Inc. Of the balance of 1,315,000 shares of Common
Stock being offered, (i) 650,000 shares of Common Stock, including 300,000
shares underlying Warrants exercisable through September 20, 1999, at an
exercise price of $1.50 per share, are being offered by Neil C. Sullivan; (ii)
465,000 shares of Common Stock underlying options exercisable at exercise prices
of $4.55 or $1.10 during exercise periods through May 31, 2000 or May 20, 2001,
are being offered collectively by five of the six executive officers and/or
directors of the Company, a 7.2% shareholder of the Company and the Company
President's mother-in-law; (iii) a total of 75,000 shares of Common Stock
underlying three options exercisable at an exercise price of $1.38 per share as
to 25,000 shares each through June 30, 1997, 1998 and 1999, respectively, are
being offered by Randy Foy, an employee of the Company; (iv) an aggregate of
25,000 shares underlying options exercisable through June 28, 2000, at an
exercise price of $.63 per share are being offered by three Company employees,
including Kimberly Chiu, Mike Chu and Tolly Smith; and (v) 10,000 shares of
Common Stock underlying options exercisable through March 31, 1999, at an
exercise price of $.68 per share are being offered by Phil Huss, a Company
consultant. The balance of a total of 90,000 shares of Common Stock being
offered, including 60,000 shares underlying Warrants exercisable on or prior to
August 31, 1998, at an exercise price of $1.70 per share may be offered by The
Equity Group, Inc., 5,000 shares of Common Stock underlying Warrants exercisable
at an exercise price of $2.00 per share through November 7, 1998, may be offered
by Edward G. Lowell and 25,000 shares are being offered by Michael Young, a
shareholder who exercised his Warrants previously. The Company will not receive
any of the proceeds of the offering of such shares of Common Stock by Selling
Shareholders; however, the Company will have received proceeds of up to a
maximum of $3,390,803 from the exercise of all of the Options and Warrants prior
to the sale of an aggregate of 3,240,003 underlying shares of Common Stock. The
table below indicates the name of each Selling Shareholder, any material
relationship he or she has had to the Company within the last three years, the
number and percentage of shares of Common Stock owned by the Selling Shareholder
prior to this offering, the number of shares being offered for sale by the
shareholder and the number of shares of Common Stock and the percentage of the
total shares of Common Stock outstanding that will be held if all shares offered
are sold. (See "Description of Securities - Options" and "- Private Placement
Warrants" and "Miscellaneous Warrants.")
<TABLE>
<CAPTION>
Shares Shares
Owned Shares Owned
Relationship Prior to Being After
Selling Shareholders to Company Offering Per Cent Offered Offering Per Cent
- -------------------- ---------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Private Placement
Warrantholders
- --------------
John Ann Hochkiss . . . . . 583,334(1) 6.6 583,334 -0- -0-
David Firestone . . . . . . 333,334(1) 3.8 333,334 -0- -0-
Irawan Onggara . . . . . . 333,334(1) 3.8 333,334 -0- -0-
John M. Liviakis . . . . . 133,335(1)(2) 1.5 133,334 -0- -0-
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
Shares Shares
Owned Shares Owned
Relationship Prior to Being After
Selling Shareholders to Company Offering Per Cent Offered Offering Per Cent
- -------------------- ---------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert B. Prag . . . . . . 133,334(1)(3) 1.5 133,334 -0- -0-
Robert S. London . . . . . 133,334(1) 1.5 133,334 -0- -0-
Shawn Cady . . . . . . . . 83,334(1) * 83,834 -0- -0-
Donald Carstens . . . . . . 83,334(1) * 83,334 -0- -0-
Ling Nen Chuan . . . . . . 83,334(1) * 83,334 -0- -0-
Sanibel Capital Corporation 83,334(1) * 83,334 -0- -0
Donna Sizemore . . . . . . 16,666(1) * 16,666 -0- -0-
Michael Young . . . . . . . 25,000 * 25,000 -0- -0-
Miscellaneous
Warrantholders
- --------------
Neil C. Sullivan . . . . . 650,000(4) 7.3 650,000 -0- -0-
The Equity Group, Inc. . . 60,000(5) * 60,000 -0- -0-
Edward G. Lowell . . . . . 5,000(6) * 5,000 -0- -0-
Optionholders
- -------------
Albert E. Gosselin, Jr. . . President, Chief Executive 551,335(7) 6.3 170,000 381,335 3.2
Officer, Chairman of the
Board of Directors,
Director
Gary L. Dudley . . . . . . Director 85,000(8) * 85,000 -0- -0-
Lee N. Sion . . . . . . . . 619,000(9) 7.2 50,000 569,000 4.8
Craig E. Gosselin . . . . . Director 45,000(10) * 40,000 5,000 *
Cynthia L. Gosselin . . . . Chief Financial Officer 96,305(10) * 40,000 56,305 *
Marcia A. Snith . . . . . . Director 101,280(10) 1.2 40,000 61,280 *
Margaret Jones . . . . . . 40,000(10) * 40,000 -0- -0-
Randy Foy . . . . . . . . . 75,000(11) * 75,000 -0- -0-
Kimberly Chiu . . . . . . . 10,000(12) * 10,000 -0- -0-
Mike Chu . . . . . . . . . 10,000(12) * 10,000 -0- -0-
Phil Huss . . . . . . . . . 10,000(13) * 10,000 -0- -0-
Tolly Smith . . . . . . . . 5,000(12) * 5,000 -0- -0-
</TABLE>
- ---------------
* Indicates ownership of less than one per cent.
(1) Fifty per cent of the number of shares of Common Stock shown represents
shares underlying Warrants exercisable to purchase one share each through
June 14, 1999, at an exercise price of $1.00 per share included in Units,
each Unit consisting of one Warrant and one share of Common Stock, purchased
by the eleven individuals named in the Company's private placement completed
in June 1996. (See "Description of Securities - Private Placement
Warrants.")
(2) Does not include 750,000 shares and 225,000 shares of Common Stock
underlying Warrants exercisable at per share exercise prices of $.94 and
$1.25, respectively, during the period from January 31, 1997, through May
29, 2000, granted to Liviakis Financial Communications, Inc., pursuant to
the Consulting
15
<PAGE> 16
Agreement, as amended, between the Company and Liviakis Financial
Communications, Inc. (See "Description of Securities - Options")
(3) Does not include 250,000 shares and 75,000 shares of Common Stock underlying
Warrants exercisable at per share exercise prices of $.94 and $1.25,
respectively, during the period from January 31, 1997, through May 29, 2000,
granted to Robert B. Prag, Senior Vice President of Liviakis Financial
Communications, Inc., pursuant to the Consulting Agreement, as amended,
between the Company and Liviakis Financial Communications, Inc. (See
"Description of Securities - Options")
(4) Includes 300,000 shares of Common Stock underlying Warrants exercisable at
an exercise price of $1.50 per share through September 20, 1999, issued to
Neil C. Sullivan together with 350,000 shares of the Company's Common Stock,
pursuant to the letter agreement dated September 20, 1996. (See "Description
of Securities - Miscellaneous Warrants.")
(5) Represents 60,000 shares underlying Warrants exercisable on or prior to
August 31, 1998, at an exercise price of $1.70 per share. (See "Description
of Securities - Miscellaneous Warrants.")
(6) Represents 5,000 shares of Common Stock underlying Warrants exercisable at
an exercise price of $2.00 per share through November 7, 1998. (See
"Description of Securities - Miscellaneous Warrants.")
(7) Includes 50,000 shares of Common Stock underlying options exercisable at an
exercise price of $.55 par share through May 28, 2001, and 120,000 shares
underlying options exercisable through January 6, 2002, at an exercise price
of $1.10 per share; does not include 123,000 shares underlying options
exercisable during the four-year period commencing January 7, 1998, through
January 6, 2002, at an exercise price of $1.10 per share, granted in
connection with the Company's agreement to acquire the common stock of LMD
which it did not already own or any of the shares of Common Stock
beneficially owned by Mr. Gosselin's adult children, including Cynthia L.
and Craig E. Gosselin, as to which he and his wife disclaim beneficial
ownership. (See "Description of Securities - Options.") Albert E. Gosselin,
Jr., and his wife, Barbara L. Gosselin, Secretary and a director of the
Company, hold their shares of the Company's Common Stock as community
property and exercise joint voting and investment power with respect to such
shares.
(8) Includes 45,000 shares of Common Stock underlying options exercisable
through May 28, 2001, at an exercise price of $.55 per share and 40,000
shares underlying options exercisable on or prior to January 6, 2002, at an
exercise price of $1.10 per share; does not include 20,000 shares underlying
options exercisable during the period commencing January 7, 1998, through
January 6, 2002, at an exercise price of $1.10 per share granted in
connection with the Company's agreement to acquire certain shares of common
stock of LMD. (See "Description of Securities - Options.")
(9) Includes 50,000 shares of Common Stock underlying options exercisable at an
exercise price of $.55 per share on or prior to May 28, 2001; does not
include 37,500 shares underlying options, granted in connection with the
Company's agreement to acquire certain shares of common stock of LMD,
exercisable during the period of four years commencing January 7, 1998,
through January 6, 2002, at an exercise price of $1.10 per share. (See
"Description of Securities - Options.")
16
<PAGE> 17
(10) Includes 40,000 shares underlying options exercisable through May 31, 2000,
at an exercise price of $1.10 per share; does not include 20,000 shares
underlying options exercisable at an exercise price of $1.10 per share
during the period commencing January 7, 1998, through January 6, 2002. (See
"Description of Securities - Options.")
(11) Represents shares underlying three options to purchase an aggregate of
75,000 shares of the Company's Common Stock at an exercise price of $1.38
per share exercisable as to 25,000 shares each through June 30, 1997, 1998
and 1999, respectively, by Randy Foy, an employee of the Company. (See
"Description of Securities - Options.")
(12) Represents shares underlying options exercisable through June 28, 2000, at
an exercise price of $.63 per share by a Company employee.
(13) Represents shares of Common Stock underlying options exercisable at an
exercise price of $.68 per share through March 31, 1999, by Phil Huss, a
Company consultant.
17
<PAGE> 18
DESCRIPTION OF SECURITIES
Capital Stock
The Company's authorized capital stock consists of 30,000,000 shares of
Common Stock, no par value per share (the "Common Stock"), and 20,000,000 shares
of preferred stock, $.01 par value per share (the "Preferred Stock").
Common Stock. All shares of Common Stock have equal voting rights and,
when validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued only
as fully-paid and nonassessable shares of Common Stock. Cumulative voting in
the election of directors is permitted; however, cumulative voting may occur
only if a shareholder announces his intention to cumulate his votes prior to the
voting, in which case all shareholders may cumulate their votes. In the event
of liquidation of the Company, each shareholder is entitled to receive a
proportionate share of the Company's assets available for distribution to
shareholders after the payment of liabilities and after distribution in full of
preferential amounts, if any, to be distributed to holders of the preferred
stock. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the shares of Common Stock are
entitled to share pro rata in dividends and distributions with respect to the
Common Stock, as may be declared by the Board of Directors out of funds legally
available therefor. As of September 19, 1996, there were 8,524,565 shares of
Common Stock issued and outstanding held of record by 1,100 shareholders. The
Common Stock is traded over-the-counter and reported on the NASDAQ SmallCap
Market System under the symbol "PRCC."
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distributions with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefor. The
Company has not paid any dividends on its Common Stock and currently intends to
retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
capital requirements and the financial condition of the Company.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or
more series as may be determined by the Board of Directors. The voting powers
and preferences, the relative rights of each such series and the qualifications,
limitations and restrictions thereof shall be established by the Board of
Directors, except that no holder of Preferred Stock shall have preemptive
rights. The Company has no outstanding Preferred Stock, and the Board of
Directors does not plan to issue any for the foreseeable future unless the
issuance thereof shall be in the best interests of the Company.
18
<PAGE> 19
Options
On May 28, 1991, the Company granted options exercisable on or prior to
May 28, 2001, to purchase an aggregate of 145,000 shares of Common Stock at an
exercise price of $.55 per share to the following individuals, as follows: (i)
Lee Sion - 50,000 shares; (ii) Albert E. Gosselin, Jr. - 50,000 shares; and
(iii) Gary Dudley - 45,000 shares. Mr. Sion and Mr. Gosselin, together with his
wife, are the record owners of approximately 7.2% and 6.3% (including the
aforementioned options), respectively, of the issued and outstanding shares of
the Company's Common Stock and Messrs. Gosselin and Dudley are executive
officers and/or directors of the Company. The terms and conditions of the
options are more fully described in the Stock Option Agreements dated May 28,
1991, with the respective optionees named hereinabove, copies of which are
incorporated herein by reference to Exhibits 10.13 through 10.15 to the
Company's Transition Report on Form 10-K for the transition period ended June
30, 1991. The foregoing brief description of certain provisions of the options
is qualified in its entirety by the more detailed provisions of the Stock Option
Agreements.
On June 29, 1995, the Company granted options exercisable on or prior to
June 28, 2000, to purchase an aggregate of 185,000 shares of Common Stock at an
exercise price of $.63 per share to the following individuals, as follows: (i)
Albert E. Gosselin, Jr. - 40,000 shares; (ii) Cynthia L. Gosselin - 20,000
shares; (iii) Barbara L. Gosselin - 20,000 shares; (iv) Gary L. Dudley - 20,000
shares; (v) Marcia Smith - 20,000 shares; (vi) Craig E. Gosselin - 20,000
shares; (vii) Keith Gosselin - 20,000 shares; (viii) Mike Chu - 10,000 shares;
(ix) Kimberly Chiu - 10,000 shares; and (x) Tolly Smith - 5,000 shares. Mr.
Craig E. Gosselin and Mesdames Cynthia L. Gosselin, Barbara L. Gosselin and
Marcia Smith, in addition to Messrs. Albert E. Gosselin, Jr., and Gary L.
Dudley, are all executive offices and/or directors of the Company. Messrs.
Keith Gosselin, Chu and Smith and Ms. Chiu are all employees of the Company. On
May 31, 1996, the Company cancelled all of the above-described options except
for the options granted to Messrs. Chu and Smith and Ms. Chiu. The terms and
conditions of the options granted to the aforementioned Company employees, which
were not cancelled, are more fully described in the Option Agreements dated June
29, 1995, with Messrs. Chiu and Smith and Ms. Chiu; copies of which are
incorporated herein by reference to Exhibits 4.47 through 4.49 to the Company's
Registration Statement on Form S-3 (Registration No. 33-60035) filed June 7,
1995.
19
<PAGE> 20
The Company has three options outstanding exercisable by Randy Foy, an
employee of the Company, at an exercise price of $1.38 per share, to purchase an
aggregate of 75,000 shares of Common Stock of the Company. The options, each of
which is exercisable to purchase 25,000 shares of Common Stock, expire on June
30, 1997, 1998 and 1999, respectively. The foregoing brief description of these
options is qualified in its entirety by reference to the more detailed
provisions of each Option and/or Option Agreement, dated as of July 1, 1994,
1995 and 1996, respectively, copies of which are incorporated herein by
reference to Exhibits 4.37 and 4.50 to the Company's Registration Statement on
Form S-3 (Registration No. 33-60035) filed June 7, 1995, and Exhibit 4.47 to the
Registration Statement on Form S-3 of which this Prospectus forms a part.
The Company granted an option to Phil Huss on April 1, 1996,
exercisable to purchase an aggregate of 10,000 shares of the Company's Common
Stock on or prior to March 31, 1999, at an exercise price of $.68 per share.
The foregoing brief description of certain provisions of the option is
qualified in its entirety by the more detailed provisions of the Option to
Purchase 10,000 shares of Common Stock of Pollution Research and Control Corp.
and the Option Agreement, copies of which are incorporated herein by reference
to Exhibit 4.11 to the Company's Registration Statement on Form S-3 of which
this Prospectus is a part.
Effective as of May 30, 1996, the Company entered into the Consulting
Agreement, as amended, with Liviakis Financial Communications, Inc., pursuant to
which it has granted options to Liviakis Financial Communications, Inc., and
Robert B. Prag, Senior Vice President of Liviakis Financial Communications,
Inc., exercisable to purchase an aggregate of 1,300,000 shares of the Company's
Common Stock during the period from January 31, 1997, through May 29, 2000. Of
these options, Liviakis Financial Communications, Inc., holds options
exercisable to purchase an aggregate of 750,000 shares, and 225,000 shares, of
Common Stock at exercise prices of $.94 and $1.25, respectively, and Mr. Prag
holds options exercisable to purchase 250,000 shares and 75,000 shares at
exercise prices of $.94 and $1.25, respectively. The terms and conditions of
these options are more fully described in the Consulting Agreement, Amendment
and Second Amendment to Consulting Agreement, Non-Qualified Stock Option
Agreements and Amendments to Non-Qualified Stock Option Agreements, copies of
which are incorporated herein by reference to Exhibits 4.12 through 4.18 to this
Registration Statement on Form S-3. The more detailed provisions of these
agreements and amendments qualify the foregoing brief description of these
options in its entirety.
20
<PAGE> 21
Effective as of June 1, 1996, the Company granted options exercisable
at an exercise price of $1.10 per share through May 31, 2000, to purchase an
aggregate of 320,000 shares of its Common Stock to five of the six executive
officers and/or directors of the Company and Margaret Jones, the mother-in-law
of the Company's President, as follows: (i) Albert E. Gosselin, Jr. - 120,000
shares; (ii) Gary L. Dudley - 40,000 shares; (iii) Craig E. Gosselin - 40,000
shares; (iv) Cynthia L. Gosselin - 40,000 shares; (v) Marcia A. Smith -
40,000 shares; and (vi) Margaret Jones - 40,000 shares. Albert E. Gosselin,
Jr., and Cynthia L. Gosselin are executive officers and directors of the
Company and Gary L. Dudley, Marcia A. Smith and Craig E. Gosselin are Company
directors. The terms and conditions of the options are more fully described in
the Options and Option Agreements, dated as of June 1, 1996, with the
respective optionees named in this paragraph above, copies of which are
incorporated herein by reference to Exhibits 4.19 through 4.24 to the
Registration Statement of which this Prospectus forms a part. The more
detailed provisions of said Options and Option Agreements qualify in its
entirety the foregoing brief description of certain provisions thereof.
21
<PAGE> 22
Private Placement Warrants
On or about June 15, 1996, the Company completed a private placement to
a total of eleven purchasers of an aggregate of 1,000,003 Units, each Unit
consisting of one share of Common Stock and one Warrant exercisable to purchase
one share of Common Stock at an exercise price of $1.00 per share, during the
three year period from June 14, 1996, through June 14, 1999. The seven holders
of the Warrants, together with the number of shares of the Company's Common
Stock issuable upon the exercise of each Warrant, include the following: (i)
John Ann Hotchkiss - 291,667 shares; (ii) David Firestone - 166,667 shares;
(iii) Irawan Onggara - 166,667; (iv) John M. Liviakis - 66,667 shares; (v)
Robert S. London - 66,667 shares; (vi) Robert B. Prag - 66,667 shares; (vii)
Shawn Cady - 41,667 shares; (viii) Donald Carstens - 41,667 shares; (ix) Ling
Nen Chuan - 41,667 shares; (x) Sanibel Capital Corporation - 41,667; and (xi)
Donna Sizemore - 8,333 shares. The following description of the Warrants is a
brief summary of certain provisions of the Warrants and is qualified in its
entirety by the more detailed provisions of the Warrant Agreements and Warrants
to Purchase Shares of Common Stock of Pollution Research and Control Corp.,
copies of which are incorporated herein by reference to Exhibits 4.25 through
4.46 to the Form S-3 Registration Statement of which this Prospectus is a part.
The Warrants provide that the shares of Common Stock, when issued upon
the exercise of the Warrants in accordance with the terms thereof, will be
fully-paid and nonassessable. The Warrants contain provisions that protect the
holders thereof against dilution by adjustment, among other things, of the
exercise price and/or the number of shares of Common Stock and/or other
securities or property issuable upon exercise of the Warrants upon the
occurrence of certain events, such as a stock or other dividend or distribution,
stock split, subdivision or combination, capital reorganization or
reclassification or merger, consolidation or sale of the Company's assets
22
<PAGE> 23
substantially as an entirety. The holder of a Warrant will not possess any
rights as a shareholder of the Company unless and until he exercises his
Warrant.
Miscellaneous Warrants
The Company, on September 20, 1996, sold 350,000 shares of Common Stock
and a Warrant exercisable over a period of three years through September 20,
1999, to purchase an aggregate of 300,000 shares of the Company's Common Stock
at an exercise price of $1.00 per share, to Neil C. Sullivan. Except for the
foregoing, the terms and conditions of the Warrant granted to Mr. Sullivan are
identical to those of the Warrants included in the Company's June 1996 private
placement of Units, a brief summary of certain provisions of which is set forth
under "Description of Securities - Private Placement Warrants" immediately
hereinabove. In connection with the sale of the Common Stock and the Warrant to
Mr. Sullivan, the Company agreed to an undertaking to amend this Prospectus, as
required, in order to maintain an effective registration statement to cover the
offer and sale of any of the shares of Common Stock received by him or any
shares issued upon the exercise of the Warrant granted to him for a period of
three years from the effective date of the Registration Statement of which this
Prospectus forms a part. The provisions of Mr. Sullivan's Warrant are set forth
in their entirety in the letter agreement and Warrant to Purchase Shares of
Common Stock of Pollution Research and Control Corp., copies of which are
incorporated herein by reference to Exhibits 4.48 and 4.49 to the Form S-3
Registration Statement of which this Prospectus is a part. The foregoing brief
description of Mr. Sullivan's Warrant is qualified in its entirety by the more
detailed provisions of the letter agreement and Warrant.
On August 31, 1993, the Company granted to The Equity Group Inc., a
public relations firm, a warrant exercisable on or prior to August 31, 1998, to
purchase 60,000 shares of the Company's Common Stock at an exercise price of
$1.70 per share. On November 8, 1993, the Company granted a warrant exercisable
on or prior to November 7, 1998, to purchase 5,000 shares of the Company's
Common stock at an exercise price of $2.00 per share, to Mr. Edward G. Lowell.
The brief descriptions of certain provisions of the warrants set forth
hereinabove are qualified in their entirety by the more detailed provisions of
the warrants, copies of which are incorporated herein by reference to Exhibits
4.29 and 4.36 to the Company's Registration Statement on Form S-3 (Registration
No. 33-60035) filed June 7, 1995.
Transfer Agent, Registrar and Warrant Agent
OTR, Inc., 1130 Southwest Morrison, Suite #250, Portland, Oregon
97205, is the Transfer Agent and Registrar for the Common Stock and the Warrant
Agent for the Warrants.
LEGAL MATTERS
Certain legal matters in connection with the validity of the issuance
of the shares of Common Stock being offered hereby will be passed upon for the
Company by Patricia Cudd & Associates, 50 South Steele Street, Suite #222,
Denver, Colorado 80209. Patricia Cudd, Esq., sole proprietor of Patricia Cudd
& Associates, owns options exercisable to purchase a total of 40,000 shares of
the Company's Common Stock at an exercise price of $1.10 per share during the
period of four years from January 7, 1998, through January 6, 2002. The shares
of Common Stock underlying Ms. Cudd's options are not included in the shares of
Common Stock covered by the Registration Statement of which this Prospectus
forms a part.
EXPERTS
The financial statements of the Company are incorporated herein by
reference to the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995. Such financial statements have been audited by
Greenberg & Jackson, an Accountancy Corporation, independent auditors, as
stated in their report which is incorporated herein by reference.
23
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of the expenses incurred in
connection with this Registration Statement and the issuance and distribution
of the shares of Common Stock being registered hereby. All such expenses will
be paid by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . $ 2,384
NASD fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,191
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . $12,500
Accounting fees and expenses . . . . . . . . . . . . . . . . . . $ 3,000
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . $ 4,000
Transfer agent fees and expenses . . . . . . . . . . . . . . . . $ 3,000
Printing, electronic filing and engraving expenses . . . . . . . $ 3,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . $ 2,000
-------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,075
</TABLE>
All of the above items except the Securities and Exchange Commission
registration and NASD fees are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation, as amended, provide for (i)
the elimination of directors' liability for monetary damages for certain
breaches of their fiduciary duties to the Company and its shareholders as
permitted by California law; and (ii) permit the indemnification by the Company
to the fullest extent under California law. At present, there is no pending
litigation or proceeding involving a director or officer of the Company as to
which indemnification is being sought. Section 317 of the California
Corporations Code, as amended, provides for the indemnification of the
officers, directors and controlling persons of a corporation as follows:
"(a) For the purposes of this section, "agent" means any person who
is or was a director officer, employee or other agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, or other enterprise, or was a director, officer,
employee, or agent of a foreign or domestic corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation; "proceeding" means any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative; and "expenses" includes without limitation attorneys' fees and
any expenses of establishing a right to indemnification under subdivision (d)
or paragraph (3) of subdivision (e).
(b) A corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the corporation to procure a judgment in
its favor, an action brought under Section 9243, or an action brought by the
Attorney General pursuant to Section 9230) by reason of the fact that such
person is or was an agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if such person acted in good faith and in a
manner such person believed to be in the best interests of the corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe the
conduct of such
24
<PAGE> 25
person was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which the person believed to be in the best interests of
the corporation or that the person had reasonable cause to believe that the
person's conduct was unlawful.
(c) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the corporation, or brought under
Section 9243, or brought by the Attorney General pursuant to Section 9230, to
procure a judgment in its favor by reason of the fact that such person is or
was an agent of the corporation, against expenses actually and reasonably
incurred by such person in connection with the defense or settlement of such
action if the person acted in good faith, in a manner in which such person
believed to be in the best interests of the corporation and with such care,
including reasonable inquiry, as an ordinary prudent person in a like position
would use under similar circumstances. No indemnification shall be made under
this subdivision:
(1) In respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the
corporation in the performance of such person's duty to the
corporation, unless and only to the extent that the court in which
such proceeding is or was pending shall determine upon application
that, in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for the expenses which
such court shall determine;
(2) Of amounts paid in settling or otherwise disposing of
a threatened or pending action, with or without court approval; or
(3) Of expenses incurred in defending a threatened or
pending action which is settled or otherwise disposed of without court
approval unless it is settled with the approval of the Attorney
General.
(d) To the extent that an agent of a corporation has been
successful on the merits in defense of any proceeding referred to in
subdivision (b) or (c) or in defense of any claim, issue or matter therein, the
agent shall be indemnified against expenses actually and reasonably incurred by
the agent in connection therewith.
(e) Except as provided in subdivision (d), any indemnification
under this section shall be made by the corporation only if authorized in the
specific case, upon a determination that indemnification of the agent is proper
in the circumstances because the agent has met the applicable standard of
conduct set forth in either subdivision (b) or (c) by:
(1) A majority vote of a quorum consisting of directors
who are not parties to such proceedings;
(2) Approval of the members (Section 5034), with the
persons to be indemnified not being entitled to vote thereon; or
(3) The court in which such proceeding is or was pending
upon application made by the corporation or the agent or the attorney
or other person rendering services in connection with the defense,
whether or not such application by the agent, attorney or other person
is approved by the corporation.
(f) Expenses incurred in defending any proceeding may be advanced
by the corporation prior to the final disposition of such proceeding upon
receipt of an undertaking by or
25
<PAGE> 26
on behalf of the agent to repay such amount unless it shall be determined
ultimately that the agent is entitled to be indemnified as authorized in this
section.
(g) No provision made by a corporation to indemnify its or its
subsidiary's directors or officers for the defense of any proceeding, whether
contained in the articles, bylaws, a resolution of members or directors, an
agreement or otherwise, shall be valid unless consistent with this section.
Nothing contained in this section shall affect any right to indemnification to
which persons other than such directors and officers may be entitled by
contract or otherwise.
(h) No indemnification or advance shall be made under this
section, except as provided in subdivision (d) or paragraph (3) of subdivision
(e), in any circumstances where it appears that:
(1) It would be inconsistent with a provision of the
articles, bylaws, a resolution of the members or an agreement in
effect at the time of the accrual of the alleged cause of action
asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification; or
(2) It would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
(i) A corporation shall have power to purchase and maintain
insurance on behalf of any agent of the corporation against any liability
asserted against or incurred by the agent in such capacity or arising out of
the agent's status as such whether or not the corporation would have the power
to indemnify the agent against such liability under the provisions of this
section; provided, however, that a corporation shall have no power to purchase
and maintain such insurance to indemnify any agent of the corporation for a
violation of Section 9243.
(j) This section does not apply to any proceeding against any
trustee, investment manager or other fiduciary of an employee benefit plan in
such person's capacity as such, even though such person may also be an agent as
defined in subdivision (a) of the employer corporation. A corporation shall
have power to indemnify such trustee, investment manager or other fiduciary to
the extent permitted by subdivision (f) or Section 207."
ITEM 16. EXHIBITS.
The Exhibit Index commences on page 26.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
26
<PAGE> 27
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
27
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Glendale, State of California, on September 24, 1996.
Date: September 24, 1996 POLLUTION RESEARCH AND CONTROL CORP.
By: /s/ Albert E. Gosselin, Jr.
----------------------------------
Albert E. Gosselin, Jr.,
President, Chief Executive Officer
and Chairman of the Board of
Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Albert E. Gosselin, Jr., and Cynthia L. Gosselin,
or either one of them, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign any and all pre-
or post-effective amendments to this Registration Statement, and to file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
Date: September 24, 1996 /s/ Albert E. Gosselin, Jr.
--------------------------------------------
Albert E. Gosselin, Jr., President, Chief
Executive Officer and Chairman of the Board
of Directors (Principal Executive Officer)
Date: September 24, 1996 /s/ Cynthia L. Gosselin
--------------------------------------------
Cynthia L. Gosselin, Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: September 24, 1996 /s/ Barbara L. Gosselin
--------------------------------------------
Barbara L. Gosselin, Director
</TABLE>
28
<PAGE> 29
Date: September 24, 1996 /s/ Gary L. Dudley
--------------------------------------
Gary L. Dudley, Director
Date: September 24, 1996 /s/ Marcia Smith
--------------------------------------
Marcia Smith, Director
Date: September 24, 1996 /s/ Craig E. Gosselin
-------------------------------------
Craig E. Gosselin, Director
29
<PAGE> 30
EXHIBIT INDEX
The following Exhibits are filed as part of this Registration
Statement on Form S-3 or are incorporated herein by reference.
<TABLE>
<CAPTION>
ITEM
NUMBER DESCRIPTION
- ------ ---------------------------------------------------------------
<S> <C>
4.1* Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Lee Sion. (Incorporated herein by
reference to Exhibit 10.14 to the Transition Report on Form 10-K
for the transition period ended June 30, 1991.)
4.2* Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Albert E. Gosselin, Jr.
(Incorporated herein by reference to Exhibit 10.15 to the Transition
Report on Form 10-K for the transition period ended June 30,
1991.)
4.3* Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Gary L. Dudley. (Incorporated
herein by reference to Exhibit 10.13 to the Transition Report on
Form 10-K for the transition period ended June 30, 1991.)
</TABLE>
30
<PAGE> 31
<PAGE> 32
<TABLE>
<S> <C>
4.4* Pollution Control and Research Corp. Common Stock Purchase
Warrant for the Purchase of 60,000 Shares of The Equity Group
Inc. dated August 31, 1993. (Incorporated herein by reference
to Exhibit 4.29 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control
Corp., filed June 7, 1995.)
4.5* Warrant to Purchase 5,000 Shares of Common Stock of Pollution
Research and Control Corp. of Edward G. Lowell dated November 8,
1993. (Incorporated herein by reference to Exhibit 4.36 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
</TABLE>
31
<PAGE> 33
<TABLE>
<S> <C>
4.6* Option to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. of Randy Foy dated as of July 4,
1994. (Incorporated herein by reference to Exhibit 4.37 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
4.7* Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. of Mike Chu dated as of June 29,
1995. (Incorporated herein by reference to Exhibit 4.47 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
4.8* Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. of Kimberly Chiu dated as of June 29,
1995. (Incorporated herein by reference to Exhibit 4.48 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
4.9* Option to Purchase 5,000 Shares of Common Stock of Pollution
Research and Control Corp. of Tolly Smith dated as of June 29,
1995. (Incorporated herein by reference to Exhibit 4.49 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
4.10* Option to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. of Randy Foy dated as of July 1,
1995. (Incorporated herein by reference to Exhibit 4.50 to the
Registration Statement on Form S-3 (Registration No. 33-60035)
of Pollution Research and Control Corp., filed June 7, 1995.)
</TABLE>
32
<PAGE> 34
<TABLE>
<S> <C>
4.11 Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Phil Huss; Option Agreement,
dated as of April 1, 1996, between Pollution Research and Control
Corp. and Phil Huss.
4.12 Consulting Agreement dated as of May 30, 1996, between Pollution
Research and Control Corp. and Liviakis Financial
Communications, Inc.
4.13 Non-Qualified Stock Option Agreement dated as of May 30, 1996,
between Pollution Research and Control Corp. and Liviakis
Financial Communications, Inc.
4.14 Non-Qualified Stock Option Agreement dated as of May 30, 1996,
between Pollution Research and Control Corp. and Robert B. Prag.
4.15 Amendment to Non-Qualified Stock Option Agreement dated July 31,
1996, between Pollution Research and Control Corp. and Liviakis
Financial Communications, Inc.
4.16 Amendment to Non-Qualified Stock Option Agreement dated July 31,
1996, between Pollution Research and Control Corp. and Robert
B. Prag.
4.17 Amendment to Consulting Agreement dated 5/30/96 between Pollution
Research and Control Corp. and Liviakis Financial
Communications, Inc., dated July 31, 1996.
4.18 Second Amendment to Consulting Agreement dated 5/30/96 between
Pollution Research and Control Corp. and Liviakis Financial
Communications, Inc., dated as of August 28, 1996.
</TABLE>
33
<PAGE> 35
<TABLE>
<S> <C>
4.19 Option to Purchase 120,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Albert E. Gosselin; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Albert E. Gosselin.
4.20 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Gary L. Dudley; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Gary L. Dudley.
</TABLE>
34
<PAGE> 36
<TABLE>
<S> <C>
4.21 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Craig E. Gosselin; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Craig E. Gosselin.
4.22 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Cynthia L. Gosselin; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Cynthia L. Gosselin.
4.23 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Marcia Smith; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Marcia Smith.
4.24 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Margaret Jones; Option
Agreement, dated as of June 1, 1996, between Pollution Research
and Control Corp. and Margaret Jones.
</TABLE>
35
<PAGE> 37
<TABLE>
<S> <C>
4.25 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and John Ann Hotchkiss.
4.26 Warrant to Purchase 291,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to John
Ann Hotchkiss.
4.27 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and David Firestone.
4.28 Warrant to Purchase 166,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to David
Firestone.
4.29 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Irawan Onggara.
4.30 Warrant to Purchase 166,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Irawan
Onggara.
4.31 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and John M. Liviakis.
4.32 Warrant to Purchase 66,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to John
M. Liviakis.
4.33 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Robert S. London.
</TABLE>
36
<PAGE> 38
<TABLE>
<S> <C>
4.34 Warrant to Purchase 66,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Robert
S. London.
4.35 Purchase Agreement, dated as of June 14,1996, between Pollution
Research and Control Corp. and Robert B. Prag.
4.36 Warrant to Purchase 66,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Robert
B. Prag.
4.37 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Shawn Cady.
4.38 Warrant to Purchase 41,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Shawn
Cady.
4.39 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Donald Carstens.
4.40 Warrant to Purchase 41,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued Lo Donald
Carstens.
4.41 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Ling Nen Chuan.
4.42 Warrant to Purchase 41,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Ling
Nen Chuan.
4.43 Purchase Agreement, dated as of June 14, 1996, between Pollution
Research and Control Corp. and Sanibel Capital Corporation.
4.44 Warrant to Purchase 41,667 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to
Sanibel Capital Corporation.
4.45 Purchase Agreement, dated as of June 14,1996, between Pollution
Research and Control Corp. and Donna Sizemore.
4.46 Warrant to Purchase 8,333 Shares of Common Stock of Pollution
Research and Control Corp., dated June 15, 1996, issued to Donna
Sizemore.
4.47 Option to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Randy Foy; Option Agreement,
dated as of July 1, 1996, between Pollution Research and Control
Corp. and Randy Foy.
</TABLE>
37
<PAGE> 39
<TABLE>
<S> <C>
4.48 Letter Agreement, dated as of September 20, 1996, between
Pollution Research and Control Corp. and Neil C. Sullivan.
4.49 Warrant to Purchase 300,000 Shares of Common Stock of Pollution
Research and Control Corp., dated September 20, 1996, issued to
Neil C. Sullivan.
</TABLE>
38
<PAGE> 40
<TABLE>
<S> <C>
5.0 Opinion and Consent of Patricia Cudd & Associates.
23.1 Consent of Patricia Cudd & Associates (included in Exhibit 5.0 hereto).
23.2 Consent of Greenberg & Jackson, an Accountancy Corporation,
independent auditors.
25.0 Power of Attorney (included on the signature page hereto).
</TABLE>
39
<PAGE> 41
- ------------------
*Previously filed.
40
<PAGE> 1
EXHIBIT 4.11
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 10,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM APRIL 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 1999
This certifies that Phil Huss or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of $.68 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on March 31, 1999.
Registered Owner: Phil Huss
Purchase Price: $.68 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered into
effective as of April 1, 1996 by and between Pollution Research and Control
Corp., a California corporation ("PRCC") and Phil Huss ("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 10,000 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 10,000 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 $.68 (the "Option Price"), and for purposes of record, the bid
market price on this date was $.64.
3. OPTION PERIOD. The option period shall commence on the date
of this Agreement (the "Date of Grant") and shall terminate three (3) 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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), and no
Shares may be sold, offered for sale,
2
<PAGE> 3
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 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 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, the high risks of investing in
PRCC, and 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 protect his
interests in connection with the transaction;
3
<PAGE> 4
(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,
are 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 ON 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:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER
4
<PAGE> 5
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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Phil Huss
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
5
<PAGE> 6
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
(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/ ALBERT E. GOSSELIN, JR.
-----------------------------
Albert E. Gosselin, Jr.,
President and Chief
Executive Officer
OPTIONEE:
/s/ PHIL HUSS
--------------------------------
Phil Huss
6
<PAGE> 7
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.
- ---------------------------------- ------------------------------
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.12
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of May 30, 1996 is
entered into by and between POLLUTION RESEARCH AND CONTROL CORP., a California
corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL
COMMUNICATIONS, INC., a California corporation (herein referred to as the
"Consultant").
RECITALS
WHEREAS, Company is a publicly held corporation with its common stock
traded on the NASDAQ; and
WHEREAS, Consultant has experience in the area of corporate finance,
investor communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to
assist and consult to the Company in matters concerning corporate finance and
to represent the Company in investors' communications and public relations with
existing shareholders and brokers, dealers and other investment professionals
as to the Company's current and proposed activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows:
1. Term of Consultancy. Company hereby agrees to retain the Consultant to
act in a consulting capacity to the Company, and the Consultant hereby agrees
to provide services to the Company, for a term of twelve (12) months
commencing on May 30, 1996 and ending on May 29, 1997.
2. Duties of Consultant. The Consultant agrees to provide the following
specified consulting services through its officers and employees during the
term specified in Section 1.
(a) Advise and assist the Company in developing and implementing
appropriate plans and materials for presenting the Company and its business
plans, strategy and personnel to the financial community, establishing an image
for the Company in the financial community, and creating the foundation for
subsequent financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and advise and assist the
Company in communicating appropriate information regarding such plans,
strategy and personnel to the financial community;
(d) Assist and advise the Company with respect to its (i)
corporate finance activities, (ii) stockholder and investor relations, (iii)
relations with brokers, dealers, analysts and other investment professionals,
and (iv) financial public relations generally;
1.
<PAGE> 2
(e) Perform the functions generally assigned to
investor/stockholder relations and public relations departments in major
corporations, including responding to telephone and written inquiries (which
may be referred to the Consultant by the Company); preparing or reviewing press
releases, reports and other communications with or to shareholders, the
investment community and the general public; advising with respect to the
timing, form, distribution and other matters related to such releases, reports
and communications; and consulting with respect to corporate symbols, logos,
names, the presentation of such symbols, logos and names, and other matters
relating to corporate image;
(f) Disseminate information regarding the Company to shareholders,
brokers, dealers, other investment community professionals and the general
investment public;
(g) Conduct meetings, in person or by telephone, with brokers,
dealers, analysts and other investment professionals to advise them of the
Company's plans, goals and activities, and assist the Company in preparing for
press conferences and other forums involving the media, investment community
professionals and the general investment public;
(h) At the Company's request, review business plans, strategies,
mission statements, budgets, proposed transactions and other plans for the
purpose of advising the Company of the investment community implications
thereof;
(i) Otherwise perform as the Company's financial relations and
public relations consultant; and,
(j) Make public communications and disclosures regarding the
Company only within the scope of the authorizations conferred by the Company
and not make any such communications or disclosures of information not provided
or authorized by the Company.
3. Allocation of Time and Energies. The Consultant
hereby promises to perform and discharge well and faithfully the
responsibilities which may be assigned to the Consultant from time to time by
the officers and duly authorized representatives of the Company in connection
with the conduct of its financial and investor public relations and
communications activities, so long as such activities are in compliance with
applicable securities laws and regulations. Consultant shall diligently and
thoroughly provide the consulting services required hereunder. Although no
specific hours-per-day requirement will be required, Consultant and the Company
agree that Consultant will perform the duties set forth hereinabove in a
diligent and professional manner. At the request of the Company, the
Consultant will inform the Company of its specific activities concerning the
Company. The parties acknowledge and agree that a disproportionately large
amount of the effort to be expended and the costs to be incurred by the
Consultant and the benefits to be received by the Company are expected to occur
upon and shortly after, and in any event, within four or five months of the
effectiveness of this Agreement.
4. Remuneration. As full and complete compensation for
services described in this Agreement, the Company shall compensate Consultant
as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration, the Company agrees to issue and deliver to the
Consultant a "Commencement Bonus" payable in the form of 2,000,000
options (the "Options") entitling the Consultant the right to purchase
shares of the Company's Common Stock. The form and content of the
Option Agreements are attached hereto and by reference incorporated
herein as Exhibit "A" and
2.
<PAGE> 3
will be acceptable to both the Company and the Consultant. Among
other things, the Options will contain the following terms and
conditions:
1. 1,000,000 of the Options will be exercisable at a
price of ninety-four Cents ($.94); 500,000 of the
Options will be exercisable at a price of One Dollar
and twenty five Cents ($1.25); and, 500,000 of the
Options will be exercisable at a price of Two Dollars
($2.00);
2. the Options will be exercisable any time after
November 30, 1996 and for the remainder of the four
year period;
3. the Options will contain no call and/or redemption
provisions;
4. the shares of common stock issuable upon the exercise
of the Options will be included in the next
appropriate registration done by the Company, which
shall be no later than November 30, 1996. All
registration costs shall be borne solely by the
Company.
This Commencement Bonus shall be issued to the Consultant
promptly following execution of this Agreement and shall, when issued
and delivered to Consultant, be fully paid and non-assessable. The
Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the
Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with
Consultant. The 2,000,000 Options issued as a Commencement Bonus,
therefore, constitute payment for Consultant's agreement to represent
the Company and are a nonrefundable, non-apportionable, and non-
ratable retainer; such Options are not a prepayment for future
services. Seventy-five percent (75%) of each of the various Options
issued pursuant to this Agreement shall be evidenced by option
agreements issued in the name of Liviakis Financial Communications,
Inc. and twenty-five percent (25%) of each of the various Options
issued pursuant to this Agreement shall be evidenced by option
agreements issued in the name of Robert B. Prag ("Prag").
4.2 Consultant and Prag (hereinafter referred to as "Consultants")
acknowledge that both the Options and the shares issuable upon the
exercise of the Options to be issued pursuant to this Agreement (the
"Shares") have not been registered under the Securities Act of 1933,
and accordingly are "restricted securities" within the meaning of
Rule 144 of the Act. As such, the Options and the Shares may not be
resold or transferred unless the Company has received an opinion of
counsel reasonably satisfactory to the Company that such resale or
transfer is exempt from the registration requirements of that Act.
4.3 In connection with the acquisition of Options hereunder, the
Consultants represent and warrant to the Company as follows:
(a) Consultants acknowledge that the Consultants have been
afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other
3.
<PAGE> 4
representatives of the Company concerning an investment in the shares,
and any additional information which the Consultants have requested.
(b) Consultants' investment in restricted securities is reasonable
in relation to the Consultants' net worth, which is in excess of ten
(10) times the Consultants' cost basis in the shares. Consultants have
had experience in investments in restricted and publicly traded
securities, and Consultants have had experience in investments in
speculative securities and other investments which involve the risk of
loss of investment. Consultants acknowledge that an investment in the
Options is speculative and involves the risk of loss. Consultants have
the requisite knowledge to assess the relative merits and risks of this
investment without the necessity of relying upon other advisors, and
Consultants can afford the risk of loss of their entire investment in
the Options. Consultants are (i) accredited investors, as that term is
defined in Regulation D promulgated under the Securities Act of 1933,
and (ii) a purchaser described in Section 25102 (f) (2) of the
California Corporate Securities Law of 1968, as amended.
(c) Consultants are acquiring the Options for the Consultants' own
account for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
5. Expenses. Consultant agrees to pay for all its expenses (phone,
mailing, labor, etc.), other than extraordinary items (travel required by/or
specifically requested by the Company, luncheons or dinners to large groups of
investment professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, etc.) approved by the Company prior to
its incurring an obligation for reimbursement.
6. Indemnification. The Company warrants and represents that all oral
communications, written documents or materials, other than those designated by
the Company to the Consultant as "confidential" or "Company private", furnished
to Consultant by the Company with respect to financial affairs, operations,
profitability and strategic planning of the Company are accurate and Consultant
may rely upon the accuracy thereof without independent investigation. The
Company will protect, indemnify and hold harmless Consultant against any claims
or litigation including any damages, liability, cost and reasonable attorney's
fees with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials not designated by
the Company to the Consultant as "confidential" or "Company private", excluding,
any such claims or litigation resulting from Consultant's communication or
dissemination of information not provided or authorized by the Company. To the
extent feasible, the Company agrees to make Consultant an additional insured on
any and all commercial liability and directors and officers liability insurance
policies and to provide Consultant with current Certificates of Insurance
reflecting, the same.
7. Representations. Consultant represents that it is not required to
maintain any licenses and registrations under federal or any state regulations
necessary to perform the services set forth herein. Consultant acknowledges
that, to the best of its knowledge, the performance of the services set forth
under this Agreement will not violate any rule or provision of any regulatory
4.
<PAGE> 5
agency having jurisdiction over Consultant. Consultant acknowledges that, to
the best of his knowledge, Consultant is not the subject of any investigation,
claim, decree or judgment involving any violation of the SEC or securities
laws. Consultant further acknowledges that it is not a securities Broker
Dealer or a registered investment advisor.
8. Legal Representation. The Company acknowledges that it has been
represented by independent legal counsel in the preparation of this Agreement.
Consultant represents that it has consulted with independent legal counsel
and/or tax, financial and business advisors, to the extent the Consultant
deemed necessary.
9. Status as Independent Contractor. Consultant's engagement pursuant
to this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is a
gross amount of consideration and that the Company will not withhold from such
consideration any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other such payment shall be
made or provided for by Consultant and the Company shall have no responsibility
or duties regarding such matters. Neither the Company or the Consultant
possess the authority to bind each other in any agreements without the express
written consent of the entity to be bound.
10. Attorney's Fee. If any legal action or any arbitration or other
proceeding is brought for the enforcement or interpretation of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in
connection with or related to this Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorneys' fees and other costs
in connection with that action or proceeding, in addition to any other relief
to which it or they may be entitled.
11. Waiver. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as
a waiver of any subsequent breach by such other party.
12. Notices. All notices, requests, and other communications hereunder
shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:
To the Company: Mr. Albert E. Gosselin
Chairman & CEO
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, CA 91201
5.
<PAGE> 6
To the Consultant: Liviakis Financial Communications, Inc.
John M. Liviakis, President
2118 "P" Street; Suite C
Sacramento, California 95816
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.
13. Choice of Law, Jurisdiction and Venue. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
California. The parties agree that Sacramento County, CA. will be the venue of
any dispute and will have jurisdiction over all parties.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the alleged breach thereof, or relating to Consultant's
activities or remuneration under this Agreement, shall be settled by binding
arbitration in California, in accordance with the applicable rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator(s) shall be binding on the parties and may be entered in any court
having jurisdiction thereof. The provisions of Title 9 of Part 3 of the
California Code of Civil Procedure, including section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all
disputes that are arbitrated under this paragraph.
15. Complete Agreement. This Agreement instrument contains the entire
agreement of the parties relating to the subject matter hereof. This Agreement
and its terms may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
AGREED TO:
"Company" POLLUTION RESEARCH AND CONTROL CORP.
Date: 5/31/96 By: /s/ ALBERT E. GOSSELIN
--------------------------------
Mr. Albert E. Gosselin
Chairman & CEO
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 5/31/96 By: /s/ JOHN M. LIVIAKIS /s/ ROBERT B. PRAG
--------------------- ----------------------
John M. Liviakis Robert B. Prag
President Sr. Vice President
6.
<PAGE> 1
EXHIBIT 4.13
EXHIBIT "A"
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, made as of the 30th day of May 1996, by and between Pollution
Research and Control Corp., a California corporation having its principal
executive offices at 506 Paula Avenue, Glendale, California 91201 (the
"Grantor), and Liviakis Financial Communications, Inc., a California
corporation having its principal executive offices at 2118 "P" Street, Suite C,
Sacramento, California 95816 (the "Optionee").
WITNESSETH:
WHEREAS, the Optionee has agreed to perform services for the Grantor;
and
WHEREAS, the Grantor is desirous that Optionee exert its utmost
efforts on behalf of the Grantor.
NOW, THEREFORE, in consideration of the Optionee's service to the
Grantor, and for other good and valuable consideration, the Grantor hereby
grants to the Optionee options to purchase common stock of the Grantor, $.001
par value ("Common Stock"), on the following terms and conditions:
1. Option.
The Grantor hereby grants to the Optionee a non-qualified stock option
(not qualified as described in Section 422 of the Internal Revenue Code of
1986, as amended, the "Code") to purchase, prior to 5:00 p.m. Glendale time on
May 29, 2000, as set forth in Paragraph 3 hereof, up to an aggregate of one
million five hundred thousand (1,500,000) fully paid and nonassessable shares
of Common Stock (the "Shares"), subject to the terms and conditions set forth
below.
2. Exercise Prices.
The exercise prices shall be allocated as set forth below:
750,000 options to purchase shares at ninety-four cents ($.94)
per Share;
375,000 options to purchase shares at one dollar and
twenty-five cents ($1.25) per Share; and
375,000 options to purchase shares at two dollars ($2.00) per
Share;
The Grantor shall pay all original issue or transfer taxes on the exercise of
this option and all other fees and expenses incurred by the Grantor in
connection herewith.
3. Exercise of Option.
All of the options granted hereby shall first become exercisable on
November 30, 1996. Subject to the provisions of Paragraph 4 hereof, such
options shall be exercisable in whole or in
1
<PAGE> 2
part at any time and from time to time from the date on which they are first
exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000.
In order to exercise the option granted hereunder in whole or in
part, the Optionee shall deliver to the Grantor a written notice substantially
in the form of Notice of Exercise of Option to Purchase Shares attached
hereto, delivery to be effected by personal delivery, by overnight courier or
by registered or certified mail, return receipt requested, addressed to the
Grantor at its principal office. Such notice shall specify the number of
Shares which Optionee is purchasing under the option herein granted and shall
be accompanied by either:
(i) payment (in the form of cash or certified or bank cashier's
check) for the Shares so being purchased at the exercise price so specified in
the form of Notice of Exercise of Option to Purchase Shares and therefor as
specified in Paragraph 2 above; or
(ii) Optionee's written direction to the Grantor to retain as
consideration for the option exercise that number of Shares (rounded upward to
the next highest full Share) so being purchased which have an aggregate value
equal to the product derived by multiplying (a) the number of Shares so being
purchased by (b) the exercise price so specified in the form of Notice of
Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2
above, such Shares to be valued for such purposes at the mean between the high
and low prices at which Shares trade in the principal market in which Shares
trade on the trading day preceding the date on which such notice is delivered
to the Grantor.
As soon as practicable thereafter but in any event within five (5)
business days after Grantor shall cause to be delivered to the Optionee
certificates issued in the Optionee's name evidencing (x) in the case payment
of the exercise price pursuant to (i) above the full number of Shares as to
which this option was exercised by the Optionee or (y) in the case of payment
of the exercise price pursuant to (ii) above the number of Shares remaining
after subtracting from the full number of Shares as to which this option was
exercised by Optionee that number of Shares which Grantor is to retain pursuant
to (ii) above. Optionee shall be considered to be the holder and owner of the
Shares to be evidenced by such certificates as of the close of business on the
date Grantor received the notice of exercise accompanied by payment, as
contemplated herein, without regard to the date of actual issuance of the
certificate(s) representing such Shares,
4. Divisibility and Non-Assignability of the Option.
(a) The Optionee may exercise the option herein granted in whole
or in part at any time and from time to time, subject to the provisions of
Paragraph 3 above, with respect to any whole number of Shares included therein,
but in no event may an option be exercised as to less than ten thousand
(10,000) Shares at any time, except for the remaining Shares covered by the
option of less than ten thousand (10,000).
(b) The Optionee may not give, grant, sell, exchange, transfer
legal title, pledge, assign or otherwise encumber or dispose of the options
herein granted or any interest therein, and the options herein granted, or any
of them, shall be exercisable only by the Optionee or its legal successors.
2
<PAGE> 3
5. Stock as Investment.
By accepting this option, the Optionee agrees that it is Optionee's
intention to purchase Shares hereunder for investment and without any view
towards the resale or distribution thereof. In the event Shares to be issued
upon exercise of this Option have not been registered at the time of proposed
issuance under the Securities Act of 1933, as amended (the "Securities Act"),
the Optionee shall deliver to the Grantor at the time of such issuance a
written representation that Optionee is acquiring such Shares in good faith for
investment purposes only and not for resale or distribution. Grantor may place
a "stop transfer" order with respect to such Shares with its transfer agent and
place an appropriate restrictive legend on the stock certificate(s) evidencing
such Shares, in order to prevent transfers unless such Shares are registered
under the Securities Act or an exemption from the registration requirements of
the Securities Act is applicable.
6. Conditions to Issuance of Shares.
The Grantor shall issue and deliver certificates for Shares purchased
upon the exercise of any option granted hereunder, provided each of the
following conditions is satisfied, which conditions the Grantor hereby
undertakes and agrees to satisfy or cause to be satisfied: (a) the issuance of
such Shares shall have been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or counsel to the
Grantor shall have given an opinion that such issuance is exempt from the
registration requirements of such Act; (b) approval, to the extent required,
shall have been obtained from any state regulatory body having jurisdiction
thereof; and (c) permission for the listing of such Shares, if required, shall
have been given by NASDAQ or any national securities exchange on which Shares
are at the time of issuance listed.
7. Registration Rights.
(a) If, at any time during the exercise period hereof and the
three (3) years following any exercise hereunder, the Grantor proposes to file
a registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Grantor shall notify the Optionee at least twenty
(20) days prior to the filing of such registration statement and will offer to
include in such registration statement all or any portion of the Shares. In a
written notice to be delivered to the Grantor within twenty (20) days after
receipt of any such notice from Grantor, the Optionee shall state the number of
Shares that it wishes to register for resale and distribution publicly under
the proposed registration statement. The Grantor will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to file at least one (1) such registration statement by January 3
1, 1997. The Grantor will also use its best efforts, through its officers,
directors, auditors and counsel in all matters necessary or advisable, to
include within the coverage of each such registration statement (except as
hereinafter provided) the Shares that Optionee has advised Grantor that
Optionee wishes to register pursuant to such registration statement for resale
and distribution, to prosecute each such registration statement diligently to
effectiveness, and to cause such registration statement to become effective as
promptly as practicable. In that regard, the Grantor makes no representation
or warranties as to its ability to have any registration statement declared
effective.
3
<PAGE> 4
All registrations requested pursuant to this Paragraph 7 (a) are
referred to herein as "Piggyback Registrations." In the event the Grantor is
advised by the staff of the SEC, NASDAQ or any self-regulatory or state
securities agency that the inclusion of the Shares will prevent, preclude or
materially delay the effectiveness of a registration statement filed, the
Grantor, in good faith, may amend such registration statement to exclude the
Shares without otherwise affecting the Optionee's rights to any other
registration statement herein.
(i) Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Grantor, and if the
underwriter thereof advises the Grantor in writing that in its opinion the
number of Shares requested to be included in such registration statement
exceeds the number that can be sold in such offering without materially
adversely affecting the distribution of such securities by the Grantor, then
the Grantor will include in such registration statement first, the securities
that the Grantor proposes to sell and second, the securities requested to be
included in such registration statement by selling securityholders, such right
to inclusion being apportioned pro rata among the Optionee and the other
holders of any other securities requesting registration according to the market
value of Shares and other securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Grantor in writing that the distribution of the Shares being included in the
registration statement concurrently with the securities being registered by the
Grantor would materially adversely affect the distribution of such securities
by the Grantor, then the Optionee shall delay its offering and sale for such
period ending on the earliest of (a) 180 days following the effective date of
the Grantor's registration statement, (b) the earliest date that, in the
opinion of such underwriter, such adverse effect would no longer be caused, or
(c) such date as the Grantor, managing underwriter and Optionee shall otherwise
agree. In the event of such delay, the Grantor shall file such supplements and
post-effective amendments and take any such other actions as may be necessary
or appropriate to permit such Optionee to make its proposed offering and sale
for a period of at least ninety (90) days commencing immediately following the
end of such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Grantor, the underwriter and the Optionee. Notwithstanding the foregoing, the
Grantor shall not be required to include Shares within the coverage of a
registration statement being filed pursuant to this Paragraph 7(a)(i) if, in
the opinion of counsel for both the Grantor and Optionee, all of the Shares
proposed to be registered may be immediately transferred pursuant to the
provisions of Rule 144 under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
securities of the Grantor, and the underwriter thereof advises the Grantor in
writing that in its opinion the number of Shares requested to be included in
such registration statement exceeds the number which can be sold in such
offering without materially adversely affecting the distribution of such
securities, then the Grantor will include in such registration statement the
securities requested to be included in such registration statement by selling
securityholders on a pro rata basis, with such rights to inclusion being
apportioned among the Optionee and the other holders of any other securities
requesting registration according to the market value of Shares and other
securities requested by them, respectively, to be registered. Notwithstanding
the foregoing, the Grantor shall not be required
4
<PAGE> 5
to include Shares within the coverage of a registration statement being filed
pursuant to this Paragraph 9(a)(ii) if, in the opinion of counsel for both
the Grantor and Optionee, all of the Shares proposed to be registered may be
immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act.
(b) If at any time after November 30, 1996 and prior to the third
(3rd) anniversary of the earlier of the expiration of the option herein granted
and the purchase of the final Shares remaining subject to such option Shares
issued or issuable upon exercise of the option herein granted are not then
registered under one or more Piggyback Registrations and then covered by a
prospectus complying with the requirements of the Securities Act, the Optionee
may by written notice to the Grantor require Grantor to file a registration
statement under the Securities Act covering such Shares as Optionee may
specify in such notice. Optionee shall be entitled so to require Grantor to
file a registration statement pursuant to this Paragraph 7(b) on only one (1)
occasion. The Grantor will file such a registration statement within ninety
(90) days of receipt of such notice; and thereafter will prosecute such
registration statement diligently to effectiveness; will cause such
registration statement to become effective as promptly as practicable; will
promptly file all such supplements and post-effective amendments to such
registration statement and take any such other actions as may be necessary or
appropriate to make available to Optionee on as continuous a basis as soon as
practicable a prospectus meeting the requirements of the Securities Act through
the earliest of (a) the date on which the final Shares have been sold and
distributed by Optionee, (b) the date on which, in the opinion of counsel for
both the Grantor and Optionee, all of the Shares which Optionee then holds may
be immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act, and (c) May 29, 2003. In that regard, the Grantor makes no
representations or warranties as to its ability to have any registration
statement or post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to
this Paragraph 7, the Grantor shall indemnify the Optionee and its officers and
directors against all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus (and as amended or supplemented)
relating to such registration, or caused by any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
are made unless such statement or omission was made in reliance upon and in
conformity with information furnished to the Grantor by the Optionee
expressly for use therein. The Optionee shall also indemnify the Grantor, its
officers and directors and each underwriter of the Shares so registered with
respect to losses, claims, damages and Shares so registered with respect to
losses, claims, damages and liabilities caused by an untrue statement or
omission made in reliance upon and in conformity with information furnished by
the Optionee to the Grantor in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Paragraph
7, except the fees and disbursement of counsel to the Optionee, underwriting
commissions or discounts and any transfer or other taxes applicable to the
transfer of Shares by the Optionee, shall be borne by the Grantor.
5
<PAGE> 6
(e) Following the exercise of options hereunder, the Optionee
shall promptly advise the Grantor when Optionee no longer holds any shares
acquired through the exercise of options granted hereunder, and upon the
request of the Grantor, the Optionee shall advise the Grantor from time to time
of the number of Shares then held by Optionee which were acquired through the
exercise of options granted hereunder.
8. Adjustments Upon Changes in Capitalization.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, consolidations, combinations, exchanges of shares,
separations, reorganizations, liquidations or any similar events or events
having similar consequences, the number and class of Shares as to which the
option may be exercised shall be correspondingly adjusted so that for the same
aggregate exercise price the Optionee shall be entitled to acquire the
securities and other property Optionee would have held if Optionee had
exercised the option granted hereunder for the number of Shares under
consideration prior to the first of such events to occur and continued to hold
such Shares and all other securities and other property issued with respect
thereto in connection with such events. No adjustment shall be made with
respect to cash dividends or non-liquidating dividends payable in property
other than cash, so long as Grantor provides Optionee with written notice of any
such proposed dividend at least fifteen (15) days prior to the record date for
such dividend. Grantor shall also give Optionee prompt written notice of any
event resulting in an adjustment under this Paragraph 8(a), including a
detailed computation of such adjustment.
(b) Any adjustment in the number and kind of Shares and other
securities shall apply proportionately to only the unexercised portion of the
option granted hereunder at the time of the event given rise to the adjustment.
If fractions of a Share would result from any such adjustment, the adjustment
shall be revised to the next higher whole number of Shares so long as such
increase does not result in the holder of the option being deemed to own more
than 5% of the total combined young power or value of all classes of stock of
the Grantor or its subsidiaries, in which case the adjustment shall be revised
to the next lower whole number of Shares.
9. Effect of Mergers, Consolidations or Sales of Assets.
In the event Grantor should propose to merge or consolidate with, or
engage in some other form of business combination with, any other corporation
or entity on a basis in which Grantor is not to be the surviving entity, then
as a condition precedent to proceeding with such merger, consolidation or other
business entity, Grantor agrees to assume and perform all of Grantor's
obligations under the right to acquire the same securities and property for the
option exercise price specified herein as Optionee would have received if
Optionee had exercised the option granted herein immediately prior to such
merger, consolidation or other business combination. To the extent the above
may be inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall
be deemed interpreted so as to comply therewith.
6
<PAGE> 7
10. No Rights in Option Stock.
Optionee shall have no rights as a shareholder in respect of Shares
as to which the option granted hereunder shall not have been exercised and
payment made as herein provided.
11. Effect Upon Employment.
This Agreement does not give the Optionee any right to employment by,
or any other relationship with, the Grantor.
12. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
13. Miscellaneous.
This Agreement shall be construed under the laws of the State of
California applied to agreements made and to be performed entirely within such
State. Headings have been included herein for convenience of reference only
and shall not be deemed a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Pollution Research and Control Corp.
By: /s/ ALBERT E. GOSSELIN, JR.
-----------------------------
ACCEPTED AND AGREED TO:
LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By: /s/ JOHN M. LIVIAKIS
--------------------------------
John M. Liviakis, President
7
<PAGE> 8
NOTICE OF EXERCISE OF OPTION TO PURCHASE SHARES
TO: POLLUTION RESEARCH AND CONTROL CORP.
The undersigned hereby exercises the option for the purchase
of ______________________________ ( _________________) Shares with an exercise
price of ___________________________________ ($___________) according to the
terms and conditions of that certain Non-Qualified Stock Option Agreement,
dated as of May 30, 1996, between Pollution Research and Control Corp. and the
undersigned (the "Agreement") and herewith makes payment of the exercise price
in full in accordance with the terms of said Agreement by (check one):
[ ] (i) payment in the form of cash or certified or bank
cashier's check for the Shares so being purchased at the exercise price
of __________________($______________) therefor as specified in Paragraph 2 of
the Agreement; or
[ ] (ii) these written directions to the Grantor to retain as
consideration for the option exercise that number of the Shares (rounded upward
to the next highest full Share) so being purchased which have an aggregate
value (valued for such purpose at the mean between the high and low prices at
which Shares traded in the principal market in which Shares trade on the
trading day preceding the date on which this Notice is delivered to
Pollution Research and Control Corp.) equal to the product derived by
multiplying (a) the number of Shares so being purchased by (b) the exercise
price therefor as specified in Paragraph 2 of the Agreement.
The undersigned is purchasing such Shares for investment purposes only
and not with a view to the sale or distribution thereof. Kindly issue the
certificate for such Shares in accordance with the instructions given below.
-----------------------------
Signature
Social Security or Taxpayer I.D. Number:
----------------------
Instructions for issuance of stock:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City State Zip Code
8
<PAGE> 1
EXHIBIT 4.14
EXHIBIT "A"
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, made as of the 30th day of May 1996, by and between Pollution
Research and Control Corp., a California corporation having its principal
executive offices at 506 Paula Avenue, Glendale, California 91201 (the
"Grantor), and Robert B. Prag , whose business address is 2118 "P" Street,
Suite C, Sacramento, California 95816 (the "Optionee").
WITNESSETH:
WHEREAS, the Optionee has agreed to perform services for the Grantor;
and
WHEREAS, the Grantor is desirous that Optionee exert its utmost
efforts on behalf of the Grantor.
NOW, THEREFORE, in consideration of the Optionee's service to the
Grantor, and for other good and valuable consideration, the Grantor hereby
grants to the Optionee options to purchase common stock of the Grantor, $.001
par value ("Common Stock"), on the following terms and conditions:
1. Option.
The Grantor hereby grants to the Optionee a non-qualified stock option
(not qualified as described in Section 422 of the Internal Revenue Code of
1986, as amended, the "Code") to purchase, prior to 5:00 p.m. Glendale time on
May 29, 2000, as set forth in Paragraph 3 hereof, up to an aggregate of five
hundred thousand (500,000) fully paid and nonassessable shares of Common Stock
(the "Shares"), subject to the terms and conditions set forth below.
2. Exercise Prices.
The exercise prices shall be allocated as set forth below:
250,000 options to purchase shares at ninety-four cents ($.94) per
Share;
125,000 options to purchase shares at one dollar and twenty-five cents
($1.25) per Share; and
125,000 options to purchase shares at two dollars ($2.00) per Share:
The Grantor shall pay all original issue or transfer taxes on the exercise of
this option and all other fees and expenses incurred by the Grantor in
connection herewith.
3. Exercise of Option.
All of the options granted hereby shall first become exercisable on
November 30, 1996. Subject to the provisions of Paragraph 4 hereof, such
options shall be exercisable in whole or in part at any time and from time to
time from the date on which they are first exercisable through 5:00 p.m.
Glendale, CA time on May 29, 2000.
1
<PAGE> 2
In order to exercise the option granted hereunder in whole or in part,
the Optionee shall deliver to the Grantor a written notice substantially in the
form of Notice of Exercise of Option to Purchase Shares attached hereto,
delivery to be effected by personal delivery, by overnight courier or by
registered or certified mail, return receipt requested, addressed to the
Grantor at its principal office. Such notice shall specify the number of
Shares which Optionee is purchasing under the option herein granted and shall
be accompanied by either:
(i) payment (in the form of cash or certified or bank
cashier's check) for the Shares so being purchased at the exercise price so
specified in the form of Notice of Exercise of Option to Purchase Shares and
therefor as specified in Paragraph 2 above; or
(ii) Optionee's written direction to the Grantor to retain
as consideration for the option exercise that number of Shares (rounded upward
to the next highest full Share) so being purchased which have an aggregate
value equal to the product derived by multiplying (a) the number of Shares so
being purchased by (b) the exercise price so specified in the form of Notice of
Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2
above, such Shares to be valued for such purposes at the mean between the high
and low prices at which Shares trade in the principal market in which Shares
trade on the trading day preceding the date on which such notice is delivered
to the Grantor.
As soon as practicable thereafter but in any event within five (5)
business days after Grantor shall cause to be delivered to the Optionee
certificates issued in the Optionee's name evidencing (x) in the case payment
of the exercise price pursuant to (i) above the full number of Shares as to
which this option was exercised by the Optionee or (y) in the case of payment
of the exercise price pursuant to (ii) above the number of Shares remaining
after subtracting from the full number of Shares as to which this option was
exercised by Optionee that number of Shares which Grantor is to retain pursuant
to (ii) above. Optionee shall be considered to be the holder and owner of the
Shares to be evidenced by such certificates as of the close of business on the
date Grantor received the notice of exercise accompanied by payment, as
contemplated herein, without regard to the date of actual issuance of the
certificate(s) representing such Shares.
4. Divisibility and Non-Assignability of the Option.
(a) The Optionee may exercise the option herein granted in whole
or in part at any time and from time to time, subject to the provisions of
Paragraph 3 above, with respect to any whole number of Shares included
therein, but in no event may an option be exercised as to less than ten
thousand (10,000) Shares at any time, except for the remaining Shares
covered by the option of less than ten thousand (10,000).
(b) The Optionee may not give, grant, sell, exchange, transfer
legal title, pledge, assign or otherwise encumber or dispose of the options
herein granted or any interest therein, and the options herein granted, or any
of them, shall be exercisable only by the Optionee or its legal successors.
2
<PAGE> 3
5. Stock as Investment.
By accepting this option, the Optionee agrees that it is Optionee's
intention to purchase Shares hereunder for investment and without any view
towards the resale or distribution thereof. In the event Shares to be issued
upon exercise of this Option have not been registered at the time of proposed
issuance under the Securities Act of 1933, as amended (the "Securities Act"),
the Optionee shall deliver to the Grantor at the time of such issuance a
written representation that Optionee is acquiring such Shares in good faith for
investment purposes only and not for resale or distribution. Grantor may place
a "stop transfer" order with respect to such Shares with its transfer agent and
place an appropriate restrictive legend on the stock certificate(s) evidencing
such Shares, in order to prevent transfers unless such Shares are registered
under the Securities Act or an exemption from the registration requirements of
the Securities Act is applicable.
6. Conditions to Issuance of Shares.
The Grantor shall issue and deliver certificates for Shares purchased
upon the exercise of any option granted hereunder, provided each of the
following conditions is satisfied, which conditions the Grantor hereby
undertakes and agrees to satisfy or cause to be satisfied: (a) the issuance of
such Shares shall have been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or counsel to the
Grantor shall have given an opinion that such issuance is exempt from the
registration requirements of such Act; (b) approval, to the extent required,
shall have been obtained from any state regulatory body having jurisdiction
thereof, and (c) permission for the listing of such Shares, if required, shall
have been given by NASDAQ or any national securities exchange on which Shares
are at the time of issuance listed.
7. Registration Rights.
(a) If, at any time during the exercise period hereof and the
three (3) years following any exercise hereunder, the Grantor proposes to file
a registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Grantor shall notify the Optionee at least twenty
(20) days prior to the filing of such registration statement and will offer to
include in such registration statement all or any portion of the Shares. In a
written notice to be delivered to the Grantor within twenty (20) days after
receipt of any such notice from Grantor, the Optionee shall state the number of
Shares that it wishes to register for resale and distribution publicly under
the proposed registration statement. The Grantor will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to file at least one (1) such registration statement by January 3
1, 1997. The Grantor will also use its best efforts, through its officers,
directors, auditors and counsel in all matters necessary or advisable, to
include within the coverage of each such registration statement (except as
hereinafter provided) the Shares that Optionee has advised Grantor that
Optionee wishes to register pursuant to such registration statement for resale
and distribution, to prosecute each such registration statement diligently to
effectiveness, and to cause such registration statement to become effective as
promptly as practicable. In that regard, the Grantor makes no representation
or warranties as to its ability to have any registration statement declared
effective.
3
<PAGE> 4
All registrations requested pursuant to this Paragraph 7 (a) are
referred to herein as "Piggyback Registrations." In the event the Grantor is
advised by the staff of the SEC, NASDAQ or any self-regulatory or state
securities agency that the inclusion of the Shares will prevent, preclude or
materially delay the effectiveness of a registration statement filed, the
Grantor, in good faith, may amend such registration statement to exclude the
Shares without otherwise affecting the Optionee's rights to any other
registration statement herein.
(i) Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Grantor, and if the
underwriter thereof advises the Grantor in writing that in its opinion the
number of Shares requested to be included in such registration statement
exceeds the number that can be sold in such offering without materially
adversely affecting the distribution of such securities by the Grantor, then
the Grantor will include such registration statement first, the securities that
the Grantor proposes to sell and second, the securities requested to be
included in such registration statement by selling securityholders, such right
to inclusion being apportioned pro rata among the Optionee and the other
holders of any other securities requesting registration according to the market
value of Shares and other securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Grantor in writing that the distribution of the Shares being included in the
registration statement concurrently with the securities being registered by the
Grantor would materially adversely affect the distribution of such securities
by the Grantor, then the Optionee shall delay its offering and sale for such
period ending on the earliest of (a) 180 days following the effective date of
the Grantor's registration statement, (b) the earliest date that, in the
opinion of such underwriter, such adverse effect would no longer be caused, or
(c) such date as the Grantor, managing underwriter and Optionee shall otherwise
agree. In the event of such delay, the Grantor shall file such supplements and
post-effective amendments and take any such other actions as may be necessary
or appropriate to permit such Optionee to make its proposed offering and sale
for a period of at least ninety (90) days commencing immediately following the
end of such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Grantor, the underwriter and the Optionee. Notwithstanding the foregoing, the
Grantor shall not be required to include Shares within the coverage of a
registration statement being filed pursuant to this Paragraph 7(a)(i) if, in
the opinion of counsel for both the Grantor and Optionee, ail of the Shares
proposed to be registered may be immediately transferred pursuant to the
provisions of Rule 144 under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
securities of the Grantor, and the underwriter thereof advises the Grantor in
writing that in its opinion the number of Shares requested to be included in
such registration statement exceeds the number which can be sold in such
offering without materially adversely affecting the distribution of such
securities, then the Grantor will include in such registration statement the
securities requested to be included in such registration statement by selling
securityholders on a pro rata basis, with such rights to inclusion being
apportioned among the Optionee and the other holders of any other securities
requesting registration according to the market value of Shares and other
securities requested by them, respectively, to be registered. Notwithstanding
the foregoing, the Grantor shall not be required
4
<PAGE> 5
to include Shares within the coverage of a registration statement being filed
pursuant to this Paragraph 9 (a) (ii) if, in the opinion of counsel for both
the Grantor and Optionee, all of the Shares proposed to be registered may be
immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act.
(b) If at any time after November 30, 1996 and prior to the third
(3rd) anniversary of the earlier of the expiration of the option herein granted
and the purchase of the final Shares remaining subject to such option Shares
issued or issuable upon exercise of the option herein granted are not then
registered under one or more Piggyback Registrations and then covered by a
prospectus complying with the requirements of the Securities Act, the Optionee
may by written notice to the Grantor require Grantor to file a registration
statement under the Securities Act covering such Shares as Optionee may specify
in such notice. Optionee shall be entitled so to require Grantor to file a
registration statement pursuant to this Paragraph 7 (b) on only one (1)
occasion. The Grantor will file such a registration statement within ninety
(90) days of receipt of such notice; and thereafter will prosecute such
registration statement diligently to effectiveness; will cause such
registration statement to become effective as promptly as practicable; will
promptly file all such supplements and post-effective amendments to such
registration statement and take any such other actions as may be necessary or
appropriate to make available to Optionee on as continuous a basis as soon as
practicable a prospectus meeting the requirements of the Securities Act through
the earliest of (a) the date on which the final Shares have been sold and
distributed by Optionee, (b) the date on which, in the opinion of counsel for
both the Grantor and Optionee, all of the Shares which Optionee then holds may
be immediately transferred pursuant to the provisions of Rule 144 under the
Securities Act, and (c) May 29, 2003. In that regard, the Grantor makes no
representations or warranties as to its ability to have any registration
statement or post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to
this Paragraph 7, the Grantor shall indemnify the Optionee and its officers and
directors against all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus (and as amended or supplemented)
relating to such registration, or caused by any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
are made unless such statement or omission was made in reliance upon and in
conformity with information furnished to the Grantor by the Optionee
expressly for use therein. The Optionee shall also indemnify the Grantor, its
officers and directors and each underwriter of the Shares so registered with
respect to losses, claims damages and Shares so registered with respect to
losses, claims, damages and liabilities caused by an untrue statement or
omission made in reliance upon and in conformity with information furnished by
the Optionee to the Grantor in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Paragraph
7, except the fees and disbursement of counsel to the Optionee, underwriting
commissions or discounts and any transfer or other taxes applicable to the
transfer of Shares by the Optionee, shall be borne by the Grantor.
5
<PAGE> 6
(e) Following the exercise of options hereunder, the Optionee
shall promptly advise the Grantor when Optionee no longer holds any shares
acquired through the exercise of options granted hereunder, and upon the
request of the Grantor, the Optionee shall advise the Grantor from time to time
of the number of Shares then held by Optionee which were acquired through the
exercise of options granted hereunder.
8. Adjustments Upon Changes in Capitalization.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, consolidations, combinations, exchanges of shares,
separations, reorganizations, liquidations or any similar events or events
having similar consequences, the number and class of Shares as to which the
option may be exercised shall be correspondingly adjusted so that for the same
aggregate exercise price the Optionee shall be entitled to acquire the
securities and other property Optionee would have held if Optionee had
exercised the option granted hereunder for the number of Shares under
consideration prior to the first of such events to occur and continued to hold
such Shares and all other securities and other property issued with respect
thereto in connection with such events. No adjustment shall be made with
respect to cash dividends or non-liquidating dividends payable in property
other than cash, so long as Grantor provides Optionee with written notice of
any such proposed dividend at least fifteen (15) days prior to the record date
for such dividend. Grantor shall also give Optionee prompt written notice of
any event resulting in an adjustment under this Paragraph 8(a), including a
detailed computation of such adjustment.
(b) Any adjustment in the number and kind of Shares and other
securities shall apply proportionately to only the unexercised portion of the
option granted hereunder at the time of the event given rise to the adjustment.
If fractions of a Share would result from any such adjustment, the adjustment
shall be revised to the next higher whole number of Shares so long as such
increase does not result in the holder of the option being deemed to own more
than 5% of the total combined voting power or value of all classes of stock of
the Grantor or its subsidiaries, in which case the adjustment shall be revised
to the next lower whole number of Shares.
9. Effect of Mergers, Consolidations or Sales of Assets.
In the event Grantor should propose to merge or consolidate with, or
engage in some other form of business combination with, any other corporation or
entity on a basis in which Grantor is not to be the surviving entity, then as a
condition precedent to proceeding with such merger, consolidation or other
business entity, Grantor agrees to assume and perform all of Grantor's
obligations under the right to acquire the same securities and property for the
option exercise price specified herein as Optionee would have received if
Optionee had exercised the option granted herein immediately prior to such
merger, consolidation or other business combination. To the extent the above
may be inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall
be deemed interpreted so as to comply therewith.
6
<PAGE> 7
10. No Rights in Option Stock.
Optionee shall have no rights as a shareholder in respect of Shares as
to which the option granted hereunder shall not have been exercised and payment
made as herein provided.
11. Effect Upon Employment.
This Agreement does not give the Optionee any right to employment by,
or any other relationship with, the Grantor.
12. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
13. Miscellaneous.
This Agreement shall be construed under the laws of the State of
California applied to agreements made and to be performed entirely within such
State. Headings have been included herein for convenience of reference only
and shall not be deemed a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Pollution Research and Control Corp.
By: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
ACCEPTED AND AGREED TO:
By: /s/ ROBERT B. PRAG
--------------------------------
Robert B. Prag
7
<PAGE> 8
NOTICE OF EXERCISE OF OPTION TO PURCHASE SHARES
TO: POLLUTION RESEARCH AND CONTROL CORP.
The undersigned hereby exercises the option for the purchase of
_____________________________ (____________) Shares with an exercise price of
___________________________ ($___________) according to the terms and
conditions of that certain Non-Qualified Stock Option Agreement, dated as of
May 30, 1996, between Pollution Research and Control Corp. and the undersigned
(the "Agreement") and herewith makes payment of the exercise price in full in
accordance with the terms of said Agreement by (check one):
[ ] (i) payment in the form of cash or certified or bank
cashier's check for the Shares so being purchased at the exercise price of
___________________________ ($__________) therefor as specified in Paragraph 2
of the Agreement; or
[ ] (ii) these written directions to the Grantor to retain as
consideration for the option exercise that number of the Shares (rounded upward
to the next highest full Share) so being purchased which have an aggregate
value (valued for such purpose at the mean between the high and low prices at
which Shares traded in the principal market in which Shares trade on the
trading day preceding the date on which this Notice is delivered to
Pollution Research and Control Corp.) equal to the product derived by
multiplying (a) the number of Shares so being purchased by (b) the exercise
price _______________ ($______) therefor as specified in Paragraph 2 of the
Agreement.
The undersigned is purchasing such Shares for investment purposes only and not
with a view to the sale or distribution thereof. Kindly issue the certificate
for such Shares in accordance with the instructions given below.
----------------------------------
Signature
Social Security or Taxpayer I.D. Number: ___________________________
Instructions for issuance of stock:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Street Address
- ------------------------------------------------------------------------------
City State Zip Code
8
<PAGE> 1
EXHIBIT 4.15
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
This Amendment, dated July 31, 1996 and effective as of July 31, 1996,
to the NON-QUALIFIED STOCK OPTION AGREEMENT dated May 30, 1996 granted to
LIVIAKIS FINANCIAL COMMUNICATIONS, INC. ("Liviakis") from POLLUTION RESEARCH &
CONTROL CORP., a California corporation (herein referred to as the "Company").
RECITALS
WHEREAS, Company granted Liviakis a NON-QUALIFIED STOCK OPTION AGREEMENT
on May 30, 1996 to purchase 1,500,000 shares of the Company's; and
WHEREAS, Company and Liviakis desire to amend such NON-QUALIFIED STOCK
OPTION AGREEMENT;
NOW THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
The first paragraph of Item 3. is hereby amended as follows:
3. Exercise of Option.
All of the options granted hereby shall first become exercisable
on January 30, 1997. Subject to the provisions of Paragraph 4 hereof,
such options shall be exercisable in whole or in part at any time and
from time to time from the date on which they are first exercisable
through 5:00 p.m. Glendale, CA time on May 29, 2000.
AGREED TO:
"Company": POLLUTION RESEARCH & CONTROL CORP.
Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR.
------------- ------------------------------
Albert E. Gosselin
Chairman and CEO
"Liviakis": LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 7/31/96 By: /s/ JOHN M. LIVIAKIS
------------- ------------------------------
John M. Liviakis
President
<PAGE> 1
EXHIBIT 4.16
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
This Amendment, dated July 31, 1996 and effective as of July 31, 1996,
to the NON-QUALIFIED STOCK OPTION AGREEMENT dated May 30, 1996 granted to ROBERT
B. PRAG ("Prag") from POLLUTION RESEARCH & CONTROL CORP., a California
corporation (herein referred to as the "Company").
RECITALS
WHEREAS, Company granted Prag a NON-QUALIFIED STOCK OPTION AGREEMENT on
May 30, 1996 to purchase 1,500,000 shares of the Company's; and
WHEREAS, Company and Prag desire to amend such NON-QUALIFIED STOCK
OPTION AGREEMENT;
NOW THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
The first paragraph of Item 3. is hereby amended as follows:
3. Exercise of Option.
All of the options granted hereby shall first become exercisable
on January 30, 1997. Subject to the provisions of Paragraph 4 hereof,
such options shall be exercisable in whole or in part at any time and
from time to time from the date on which they are first exercisable
through 5:00 p.m. Glendale, CA time on May 29, 2000.
AGREED TO:
"Company": POLLUTION RESEARCH & CONTROL CORP.
Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR.
------------- ------------------------------
Albert E. Gosselin
Chairman and CEO
"Prag": ROBERT B. PRAG
Date: 7/31/96 By: /s/ ROBERT B. PRAG
------------- ------------------------------
Robert B. Prag
<PAGE> 1
EXHIBIT 4.17
AMENDMENT TO CONSULTING AGREEMENT DATED 5/30/96
This Amendment, dated July 31, 1996 and effective as of July 31, 1996,
to the Consulting Agreement dated May 30, 1996 entered into by and between
POLLUTION RESEARCH & CONTROL CORP., a California corporation (herein referred to
as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California
corporation (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company and Consultant entered into a Consulting Agreement
dated May 30, 1996 (the "Agreement"); and
WHEREAS, Company and Consultant desire to amend such Consulting
Agreement;
NOW THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
Item (2.) of Paragraph 4.1 of the Agreement is hereby amended to read as
follows:
2. The Options will be exercisable any time after January 30, 1997
and for the remainder of the four year period.
The first paragraph of Item 3. of Exhibit "A" of the Agreement titled
"NON-QUALIFIED STOCK OPTION AGREEMENT" is hereby amended as follows:
3. Exercise of Option.
All of the options granted hereby shall first become exercisable
on January 30, 1997. Subject to the provisions of Paragraph 4 hereof,
such options shall be exercisable in whole or in part at any time and
from time to time from the date on which they are first exercisable
through 5:00 p.m. Glendale, CA time on May 29, 2000.
AGREED TO:
"Company": POLLUTION RESEARCH & CONTROL CORP.
Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR.
------------ ------------------------------
Albert E. Gosselin
Chairman and CEO
"Consultant": LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 7/31/96 By: /s/ JOHN M. LIVIAKIS By: /s/ ROBERT B. PRAG
------------ ---------------------- ----------------------
John M. Liviakis Robert B. Prag
President Sr. Vice President
<PAGE> 1
Exhibit 4.18
SECOND AMENDMENT TO CONSULTING AGREEMENT DATED 5/30/96
This Second Amendment to the Consulting Agreement dated May 30, 1996
entered into as of and effective August 28, 1996 by and between POLLUTION
RESEARCH & CONTROL CORP., a California corporation (herein referred to as the
"Company") and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California
corporation (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company and Consultant entered into a Consulting Agreement
dated May 30, 1996 (the "Agreement"); and
WHEREAS, the Company and Consultant amended such Agreement effective
July 31, 1996; and
WHEREAS, Company and Consultant desire to make a second amendment to
such Agreement;
NOW THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Section 1. of the Agreement, "Term of Consultancy", is hereby
amended to read in full as follows:
Company hereby agrees to retain the Consultant to act in a consulting
capacity to the Company, and the Consultant hereby agrees to provide services
to the Company, for a term of seven (7) months commencing on May 30, 1996 and
ending on December 31, 1996.
2. Section 2. of the Agreement, "Duties of the Consultant", is hereby
amended by adding subsection (k) to read as follows:
(k.) Commencing on October 1, 1996 and for the balance of the
term of the Agreement, it is understood and agreed that Consultant in the
performance of its duties hereunder will only be required to respond to
inquiries regarding the Company, assist the Company in preparing and
disseminating its press releases, and arrange for investor conference call
presentations, and will not be required to make any proactive initiatives to
create sponsorship in the Company's common stock.
3. Subsection 4.1 of the Agreement, "Remuneration", is hereby amended
to read in full as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration, the Company agrees to issue and deliver to the Consultant a
"Commencement Bonus" payable in the form of 1,300,000 options (the "Options")
entitling the Consultant the right to purchase shares of the Company's Common
Stock. The Option Agreements will be amended as promptly as possible to
reflect the terms of this Subsection 4.1 as amended by the Second Amendment to
the Agreement. Among other things, the Options will contain the following
terms and conditions:
1. 1,000,000 of the Options will be exercisable at a price of
ninety-four Cents ($.94); and 300,000 of the Options will be
exercisable at a price of One Dollar and twenty five Cents
($1.25);
2. the Options will be exercisable any time after January 31,
1997 and for the remainder of the four year period;
3. the Options will contain no call and/or redemption
provisions;
<PAGE> 2
PRCC Second Amendment
August 28, 1996
Page 2 of 2
4. the shares of common stock issuable upon the exercise of the
Options will be included in the next appropriate registration
done by the Company, which shall be no later than January 31,
1997. All registration costs shall be borne solely by the
Company.
4. The Commencement Bonus shall be issued to the Consultant promptly
following execution of this Agreement and shall, when issued and delivered to
Consultant, be fully paid and non-assessable. The Company understands and
agrees that Consultant has foregone significant opportunities to accept this
engagement and that the Company has derived substantial benefit from the
execution of this Agreement and the ability to announce its relationship with
Consultant. The 1,300,000 Options issued as a Commencement Bonus, therefore,
constitute payment for Consultant's agreement to represent the Company and are
a nonrefundable, non-apportionable, and non-ratable retainer; such Options are
not a prepayment for future services. Seventy-five percent (75%) of each of
the various Options issued pursuant to this Agreement shall be evidenced by
option agreements issued in the name of Liviakis Financial Communications, Inc.
and twenty-five percent (25%) of each of the various Options issued pursuant to
this Agreement shall be evidenced by option agreements issued in the name of
Robert B. Prag ("Prag").
5. It is acknowledged by the parties that the proposal to enter into
this Second Amendment was solely that of the Company and not that of the
Consultant, and that the Consultant has agreed to the terms of this Second
Amendment at the request of the Company. Moreover, it is agreed and understood
that the Consultant is in good standing with the Company and the Consultant has
in no way committed any breach of the Consulting Agreement.
Except as specifically modified herein, the Agreement as previously
modified by the First Amendment thereto is hereby ratified and confirmed.
"Company": POLLUTION RESEARCH & CONTROL CORP.
Date: 8/30/96 By: /s/ ALBERT E. GOSSELIN
------- ---------------------------
Albert E. Gosselin,
Chairman and CEO
"Consultant": LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 8/28/96 By: /s/ JOHN M. LIVIAKIS /s/ ROBERT B. PRAG
------- ---------------------- ------------------------
John M. Liviakis Robert B. Prag
President Sr. Vice President
<PAGE> 1
EXHIBIT 4.19
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 120,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000
This certifies that Albert E. Gosselin or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on May 31, 2000.
Registered Owner: Albert E. Gosselin
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Albert E. Gosselin
("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 120,000 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
120,000 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 $1.10 (the "Option Price"), and for purposes of record,
the bid market price on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no Shares may be sold, offered for sale,
2
<PAGE> 3
under the Securities Act of 1933, as amended (the "Act"), and no 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 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 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, the high risks of
investing in PRCC, and 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
3
<PAGE> 4
unaffiliated with, and not compensated by, PRCC and 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, are 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 ON 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:
4
<PAGE> 5
"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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Albert E. Gosselin
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.
5
<PAGE> 6
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
(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/ Albert E. Gosselin
---------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ Albert E. Gosselin
-------------------------------------
Albert E. Gosselin
6
<PAGE> 7
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.
____________________________ ____________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.20
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000
This certifies that Gary L. Dudley or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on May 31, 2000.
Registered Owner: Gary L. Dudley
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Gary L. Dudley
("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 $1.10 (the "Option Price"), and for purposes of record,
the bid market price on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no Shares may be sold, offered for sale,
2
<PAGE> 3
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 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 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, the high risks of
investing in PRCC, and 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
protect his interests in connection with the transaction;
3
<PAGE> 4
(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, are 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 ON 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:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER
4
<PAGE> 5
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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Gary L. Dudley
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
5
<PAGE> 6
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
(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/ Albert E. Gosselin
----------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ Gary L. Dudley
-------------------------------------
Gary L. Dudley
6
<PAGE> 7
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.
____________________________ ____________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.21
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000
This certifies that Craig E. Gosselin or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on May 31, 2000.
Registered Owner: Craig E. Gosselin
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Craig E. Gosselin
("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 $1.10 (the "Option Price"), and for purposes of record,
the bid market price on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no Shares may be sold, offered for sale,
2
<PAGE> 3
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 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 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, the high risks of
investing in PRCC, and 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
protect his interests in connection with the transaction;
3
<PAGE> 4
(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, are 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 ON 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:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER
4
<PAGE> 5
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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Craig E. Gosselin
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
5
<PAGE> 6
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
(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/ ALBERT E. GOSSELIN
-------------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ CRAIG E. GOSSELIN
-------------------------------------
Craig E. Gosselin
-------------------------------------
6
<PAGE> 7
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.
______________________________ ______________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.22
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000
This certifies that Cynthia L. Gosselin or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on May 31, 2000.
Registered Owner: Cynthia L. Gosselin
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Cynthia L. Gosselin
("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 $1.10 (the "Option Price"), and for purposes of record,
the bid market price on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no Shares may be sold, offered for sale,
2
<PAGE> 3
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 she 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 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 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) Her overall commitment to investments that
are not readily marketable is not disproportionate to her net worth, and her
investment in PRCC will not cause such overall commitment to become excessive;
(d) She has the financial ability to bear the
economic risk of her investment, has adequate means of providing for her
current needs and personal contingencies, and has no need for liquidity in her
investment in PRCC;
(e) She 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, the high risks of
investing in PRCC, and 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
protect her interests in connection with the transaction;
3
<PAGE> 4
(f) She 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 she has desired in order to
evaluate her investment, and to consult with such attorneys, accountants and
other advisors as she has desired;
(g) Her residence set forth below is her true and
correct residence, and she 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, she has relied solely upon independent
investigations made by or on behalf of her;
(i) No federal or state agency has made any
finding or determination as to the fairness of an investment in PRCC; and
(j) She understands that all the representations
and warranties made by her herein, and all information furnished by her to
PRCC, are true, correct and complete in all respects.
6. Optionee hereby acknowledges that she 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 ON 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:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER
4
<PAGE> 5
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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Cynthia L. Gosselin
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
5
<PAGE> 6
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
(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/ ALBERT E. GOSSELIN
-------------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ CYNTHIA L. GOSSELIN
-------------------------------------
Cynthia L. Gosselin
-------------------------------------
6
<PAGE> 7
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.
______________________________ ______________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.23
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000
This certifies that Marcia Smith or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on May 31, 2000.
Registered Owner: Marcia Smith
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Marcia Smith ("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 $1.10 (the "Option Price"), and for purposes of record,
the bid market price on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no Shares may be sold, offered for sale,
2
<PAGE> 3
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 she 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 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 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) Her overall commitment to investments that
are not readily marketable is not disproportionate to her net worth, and her
investment in PRCC will not cause such overall commitment to become excessive;
(d) She has the financial ability to bear the
economic risk of her investment, has adequate means of providing for her
current needs and personal contingencies, and has no need for liquidity in her
investment in PRCC;
(e) She 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, the high risks of
investing in PRCC, and 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
protect her interests in connection with the transaction;
3
<PAGE> 4
(f) She 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 she has desired in order to
evaluate her investment, and to consult with such attorneys, accountants and
other advisors as she has desired;
(g) Her residence set forth below is her true and
correct residence, and she 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, she has relied solely upon independent
investigations made by or on behalf of her;
(i) No federal or state agency has made any
finding or determination as to the fairness of an investment in PRCC; and
(j) She understands that all the representations
and warranties made by her herein, and all information furnished by her to
PRCC, are true, correct and complete in all respects.
6. Optionee hereby acknowledges that she 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 ON 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:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER
4
<PAGE> 5
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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Marcia Smith
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
5
<PAGE> 6
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
(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/ Albert E. Gosselin
-----------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ Marcia Smith
--------------------------------------
Marcia Smith
______________________________________
6
<PAGE> 7
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.
_______________________________ _______________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.24
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2002
This certifies that Margaret Jones or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of $1.10 per share ("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on January 6, 2002.
Registered Owner: Margaret Jones
Purchase Price: $1.10 per share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered
into effective as of June 1, 1996 by and between Pollution Research and
Control Corp., a California corporation ("PRCC") and Margaret Jones
("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 $1.10 (the "Option Price"), and for purposes of record,
the bid price of the Company's stock on this date was $.94.
3. OPTION PERIOD. The option period shall commence on
the date of this Agreement (the "Date of Grant") and shall terminate four (4)
years from the Date of Grant.
4. EXERCISE OF OPTION. The Option may be
exercised in whole or in part at any time after the date hereof 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 Shares.
2
<PAGE> 3
5. SECURITIES LAWS REQUIREMENTS. The Option Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no 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 she 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 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 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) Her overall commitment to investments that
are not readily marketable is not disproportionate to her net worth, and her
investment in PRCC will not cause such overall commitment to become excessive;
(d) She has the financial ability to bear the
economic risk of her investment, has adequate means of providing for her
current needs and personal contingencies, and has no need for liquidity in her
investment in PRCC;
(e) She 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, the high risks of
investing in PRCC, and the competitive nature of the business in which PRCC is
engaged,
3
<PAGE> 4
and has the business or financial experience or has business or financial
advisors who are unaffiliated with, and not compensated by, PRCC and protect
her interests in connection with the transaction;
(f) She 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 she has desired in order to
evaluate her investment, and to consult with such attorneys, accountants and
other advisors as she has desired;
(g) Her residence set forth below is her true and
correct residence, and she 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, she has relied solely upon independent
investigations made by or on behalf of her;
(i) No federal or state agency has made any
finding or determination as to the fairness of an investment in PRCC; and
(j) She understands that all the representations
and warranties made by her herein, and all information furnished by her to
PRCC, are true, correct and complete in all respects.
6. Optionee hereby acknowledges that she 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 ON 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:
4
<PAGE> 5
"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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Margaret Jones
506 Paula Avenue
Glendale, CA 91201
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.
5
<PAGE> 6
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
(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/ Albert E. Gosselin, Jr.
---------------------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ Margaret Jones
-------------------------------------
Margaret Jones
_____________________________________
6
<PAGE> 7
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.
________________________________ ________________________________
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.25
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and John Ann Hotchkiss, whose address is 4316
Marina City Drive, #G-104, Marina Del Rey, California 90292 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 291,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 291,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 291,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $175,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that she is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that she is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that she has prior investment
experience, including investment in non-listed and non-registered securities,
or she has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to her and to evaluate the merits and risks of such an investment on
her behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that she has been furnished by
the Company during the course of this transaction with all information regarding
the Company which she had requested or desired to know; that all documents which
could be reasonably provided have been made available for her inspection and
review; that she has been afforded the opportunity to ask questions of and
receive answers from duly authorized officers or other representatives of the
Company concerning the terms and conditions of her investment in the Company,
and any additional information which she had requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission") since
this offering is intended to be a nonpublic offering pursuant to Section 4(2) of
the Act, The Purchaser represents that the Units, the Shares and the Warrant are
being purchased for her own account, for investment, and not for distribution or
resale to others. The Purchaser agrees that she will not sell or otherwise
transfer such securities unless they are registered under the Act or unless an
exemption from such registration is available.
1.8 The Purchaser understands that the Units, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon her investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would not
be present if her representations merely meant that her present intention was to
hold such securities for a short period, for a deferred sale, for a market rise,
assuming that a market develops, or for any other fixed period. The Purchaser
realizes that, in the view of the Commission, a purchase now with an intent to
resell would represent a purchase with an intent inconsistent with her
representation to the Company, and the Commission might regard such a sale or
disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of her name only when her
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the Company,
its directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns, harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by her contained herein or in the Confidential Purchaser
Questionnaire completed by her or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
The Company has obtained all licenses, permits and other governmental
authorizations necessary to the conduct of its business; such licenses, permits
and other governmental authorizations obtained are in full force and effect;
and the Company is in all material respects complying therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for her review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not
be discharged except by performance in accordance with its terms or by a
writing signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
/s/ JOHN ANN HOTCHKISS
- ---------------------------------- POLLUTION RESEARCH AND CONTROL CORP.,
John Ann Hotchkiss a California corporation
- ----------------------------------
4316 Marina City Drive, #B-104 By: /s/ ALBERT E. GOSSELIN, JR.
- ---------------------------------- ---------------------------------
(Address) Albert E. Gosselin. Jr.,
President and Chief
Marina Del Rey, California 90292 Executive Officer
- ----------------------------------
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.26
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 291,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, John Ann Hotchkiss or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for her own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of
the date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.27
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and David Firestone, whose address is 935 W.
Duarte, #11, Arcadia, California 91007 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 166,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 166,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $100,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a nonpublic offering pursuant to
Section 4(2) of the Act. The Purchaser represents that the Units, the Shares
and the Warrant are being purchased for his own account, for investment, and
not for distribution or resale to others. The Purchaser agrees that he will
not sell or otherwise transfer such securities unless they are registered under
the Act or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 Steele Street, Suite #222, Denver, Colorado
80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on
the signature page hereof. Notices shall be deemed to have been given on the
date of mailing, except notices of change of address, which shall be deemed to
have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ DAVID FIRESTONE a California corporation
- ----------------------------
David Firestone
935 W. DUARTE, #11 By: /s/ ALBERT E. GOSSELIN, JR.
- ---------------------------- --------------------------------
(Address) Albert E. Gosselin, Jr.,
President and Chief
ARCADIA, CALIFORNIA 91007 Executive Officer
- ----------------------------
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.28
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, David Firestone or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the number
of shares of Common Stock or other securities that would have been issuable to
the holder of this Warrant as a result of that subdivision, combination, or
dividend with respect to the shares of Common Stock which were purchasable under
this Warrant immediately before that subdivision, combination, or dividend or
any record date thereafter. If the Company shall at any time subdivide the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that subdivision shall be proportionately decreased, and, if
the Company shall at any time combine the outstanding shares of Common Stock,
the Purchase Price then in effect immediately before that combination shall be
proportionately increased. Any judgment under this Section 4 shall become
effective at the close of business on the date the subdivision, combination or
dividend becomes effective retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale of
all or substantially all of the Company's properties and assets, or (v) there
shall be a voluntary or involuntary dissolution, liquidation, or winding up of
the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock an exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER,
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
By: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.29
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
12th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Irawan Onggara, whose address is Kalisari
III/8, Surabaya, Indonesia (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 166,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 166,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $100,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following
the execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who call afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that he is an "accredited
investor," as such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities, or
he has employed the services of an investment advisor, attorney or accountant
to read all of the documents furnished or made available by the Company to him
and to evaluate the merits and risks of such an investment on his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information regarding
the Company which he had requested or desired to know, that all documents which
could be reasonably provided have been made available for his inspection and
review; that he has been afforded the opportunity to ask questions of and
receive answers from duly authorized officers or other representatives of the
Company concerning the terms and conditions of his investment in the Company,
and any additional information which he had requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission") since
this offering is intended to be a non-public offering pursuant to Section 4(2)
of the Act. The Purchaser represents that the Unit, the Shares and the Warrant
are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell or
otherwise transfer such securities unless they are registered under the Act or
unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would not
be present if his representations merely meant that his present intention was to
hold such securities for a short period, for a deferred sale, for a market rise,
assuming that a market develops, or for any other fixed period. The Purchaser
realizes that, in the view of the Commission, a purchase now with an intent to
resell would represent a purchase with an intent inconsistent with his
representation to the Company, and the Commission might regard such a sale or
disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company
and all other actions required to authorize and effect the offer and sale of
the Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ IRAWAN ONGGARA a California corporation
- ------------------------
KALISARI III/8 By: /s/ ALBERT E. GOSSELIN, JR.
- ------------------------ --------------------------------
(Address) Albert E. Gosselin, Jr.,
SURABAYA, INDONESIA President and Chief
- ------------------------ Executive Officer
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.30
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Irawan Onggara or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same of different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be, any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock Purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.31
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and John M. Liviakis, whose address is c/o
Liviakis Financial Communications, Inc., 2118 "P" Street, Suite C, Sacramento,
California 95816 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 66,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the economic
risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a nonpublic offering pursuant to Section
4(2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been
duly and validly authorized and, when issued and paid for in accordance with
the terms hereof, will be validly binding obligations of the Company enforceable
in accordance with their respective terms except that the enforceability
thereof may be limited by bankruptcy, insolvency, or other laws affecting the
rights of creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: John M. Liviakis The Company:
/s/ JOHN M. LIVIAKIS POLLUTION RESEARCH AND CONTROL CORP.,
- ---------------------------- a California corporation
c/o Liviakis Financial
Communications, Inc.
2118 "P" Street, Suite C
- ---------------------------- By: /s/ ALBERT E. GOSSELIN, JR.,
(Address) ----------------------------
Albert E. Gosselin, Jr.,
Sacramento, California 95816 President and Chief
- ---------------------------- Executive Officer
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.32
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, John M. Liviakis or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant is
not then registered under the Securities Act of 1933, as amended, the holder of
this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this
Warrant shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: ALBERT E. GOSSELIN, JR.
----------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 8
SUBSCRIPTION FORM
TO: POLLUTION RESEARCH AND CONTROL CORP.
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the purchase right represented by that Warrant for, and to
purchase under that Warrant, ________ shares of Common Stock of POLLUTION
RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the
certificates for those shares be issued in the name of, and delivered to
_______________________________________,
whose address is __________________________________________ and if said number
of shares shall not be all the shares now purchasable under the attached
Warrant, the undersigned hereby requests that a new certificate be registered
in the name of and delivered to the undersigned for the balance of the shares
purchasable under the attached Warrant.
DATED:____________________ _______________________________
(Signature)
Note: The above signature must correspond
with the name written upon the face
of the attached Warrant Certificate
unless the Warrant has been properly
and lawfully assigned.
8
<PAGE> 1
EXHIBIT 4.33
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14 day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California
corporation with its principal offices at 506 Paula Avenue, Glendale, California
91201 (the "Company") and Robert S. London, whose address is 212 Aurora Drive,
Santa Barbara, California 93108 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 66,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 66,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a non-public offering pursuant to Section
4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein, or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(c) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue,
Glendale, California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof, Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ ROBERT S. LONDON a California corporation
- -------------------------------
Robert S. London
By: /s/ ALBERT E. GOSSELIN, JR.
212 Aurora Drive ---------------------------------
- ------------------------------- Albert E. Gosselin, Jr.,
(Address) President and Chief
Executive Officer
Santa Barbara, California 93108
- -------------------------------
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.34
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Robert S. London or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant is
not then registered under the Securities Act of 1933, as amended, the holder of
this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its outstanding
shares of Common Stock, pay a dividend of other securities to the holders of
such shares, or pay a dividend of shares of Common Stock to holders of any such
stock of the Company of any class, this Warrant shall, after that subdivision,
combination, or dividend, evidence the right to purchase the number of shares of
Common Stock or other securities that would have been issuable to the holder of
this Warrant as a result of that subdivision, combination or dividend with
respect to the shares of Common Stock which were purchasable under this Warrant
immediately before that subdivision, combination, or dividend or any record date
thereafter. If the Company shall at any time subdivide the outstanding shares
of Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased, and, if the Company shall at any
time combine the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before that combination shall be proportionately increased.
Any judgment under this Section 4 shall become effective at the close of
business on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of the
Company with or into another corporation, or (iv) there shall be any sale of all
or substantially all of the Company's properties and assets, or (v) there shall
be a voluntary or involuntary dissolution, liquidation, or winding up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action
avoid, or seek to avoid, the observance or performance of any of the terms of
this Warrant, but will, at all times and in good faith, assist in carrying out
all those terms and in taking all action necessary or appropriate to protect the
rights of the holder of this Warrant against other impairment. Without limiting
the generality of the above provision, the Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
----------------------------------
Albert E. Gosselin, Jr.,
President and
Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.35
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Robert B. Prag, whose address is c/o
Liviakis Financial Communications, Inc., 2118 "P" Street, Suite C, Sacramento,
California 95816 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 66,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 66,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units involves
a high degree of risk in that an investment in the Company is highly speculative
and only an investor who can afford to lose its entire investment in the Company
should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the economic
risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities, or
he has employed the services of an investment advisor, attorney or accountant to
read all of the documents furnished or made available by the Company to him and
to evaluate the merits and risks of such an investment on his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know, that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a non-public offering pursuant to Section
4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
Purchaser: The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ ROBERT B. PRAG a California corporation
- ----------------------------
Robert B. Prag By: /s/ ALBERT E. GOSSELIN, JR.
-------------------------------
c/o Liviakis Financial Albert E. Gosselin, Jr.,
Communications, Inc. President and Chief
2118 "P" Street, Suite C Executive Officer
- ----------------------------
(Address)
Sacramento, California 95816
- ----------------------------
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.36
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14,1999
This certifies that, Robert B. Prag or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price").
The Purchase Price and number of shares of Common Stock issuable upon exercise
hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised,
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision, combination
or dividend or any record date thereafter. If the Company shall at any time
subdivide the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before that subdivision shall be proportionately decreased,
and, if the Company shall at any time combine the outstanding shares of Common
Stock, the Purchase Price then in effect immediately before that combination
shall be proportionately increased. Any judgment under this Section 4 shall
become effective at the close of business on the date the subdivision,
combination or dividend becomes effective retroactive to the record date
therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books, The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise, and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
------------------------------
Albert E. Gosselin, Jr.,
President and
Chief Executive Officer
7
<PAGE> 8
SUBSCRIPTION FORM
TO: POLLUTION RESEARCH AND CONTROL CORP.
The undersigned, the holder of the attached Warrant, hereby
irrevocably elects to exercise the purchase right represented by that Warrant
for, and to purchase under that Warrant, shares of Common Stock of
POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and
requests that the certificates for those shares be issued in the name of, and
delivered to , whose address is
and if said number of shares shall not be all the shares now purchasable under
the attached Warrant, the undersigned hereby requests that a new certificate be
registered in the name of and delivered to the undersigned for the balance of
the shares purchasable under the attached Warrant.
DATED:
--------------------------- ------------------------------
(Signature)
------------------------------
------------------------------
Note: The above signature must
correspond with the name written
upon the face of the attached
Warrant Certificate unless the
Warrant has been properly and
lawfully assigned.
8
<PAGE> 1
EXHIBIT 4.37
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Shawn Cady, whose address is 3764 Lakeview
Boulevard, Lake Oswego, Oregon 97035 (the "Purchaser").
WITNESSETH:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 41,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units involves
a high degree of risk in that an investment in the Company is highly speculative
and only an investor who can afford to lose its entire investment in the Company
should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the economic
risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities, or
he has employed the services of an investment advisor, attorney or accountant to
read all of the documents furnished or made available by the Company to him and
to evaluate the merits and risks of such an investment on his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know, that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a nonpublic offering pursuant to Section
4(2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable, upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective registration
statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on
file with the Securities and Exchange Commission. The Company shall deliver to
Purchaser at the Company's sole expense a copy of the Registration Statement,
and all amendments thereto prior to the consummation of the Sale. In addition,
the Company shall use its best efforts to register, at the Company's sole
expense, the Shares and the shares of the Company's Common Stock issuable upon
exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the
Registration Statement and provide Purchaser with a copy of such amended
registration statement for his review prior to the effective date thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2. This Agreement shall not be changed, modified or made except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: [SIG] The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ Shawn Cady a California corporation
- ------------------------------
3764 Lakeview Boulevard By: /s/ ALBERT E. GOSSELIN, JR.
- ------------------------------ ---------------------------------
(Address) Albert E. Gosselin, Jr.,
President and Chief
Lake Oswego, Oregon 97035 Executive Officer
- ------------------------------
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.38
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Shawn Cady or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price").
The Purchase Price and number of shares of Common Stock issuable upon exercise
hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this, Warrant, deliver to the Company
an investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued
upon exercise of this Warrant shall for all purposes be deemed to have become
the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that,
if the date of such surrender and payment is a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open. No fractional share will be
issued on exercise of rights to purchase under this Warrant. If on any
exercise of this Warrant, a fraction of a share results the Company will pay
the cash value of that fractional share, calculated on the basis of the
Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation or sale, such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or the date as of
which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock Purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
---------------------------
Albert E. Gosselin, Jr., President and Chief
Executive Officer
7
<PAGE> 1
EXHIBIT 4.39
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue,
Glendale, California 91201 (the "Company") and Donald Carstens, whose address
is 3 Upper Newport Plaza, Newport Beach, California 92660 (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 41,667 Units and the Company agrees to sell the
Unites to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the economic
risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could he reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a non-public offering pursuant to Section
4(2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
/s/ DONALD CARSTENS POLLUTION RESEARCH AND CONTROL CORP.,
- ------------------------------- a California corporation
Donald Carstens
3 Upper Newport Plaza By: /s/ ALBERT E. GOSSELIN, JR.
- ------------------------------- ------------------------------
(Address) Albert E. Gosselin, Jr.,
President and Chief
Newport Beach, California 92660 Executive Officer
- -------------------------------
(City, State, Zip)
6-16-96
<PAGE> 1
EXHIBIT 4.40
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Donald Carstens or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant, the
Company, at its expense, will cause to be issued in the name of and delivered to
the holder of this Warrant, a certificate, or certificates, for the number of
fully paid and nonassessable shares of Common Stock to which that holder shall
be entitled on such exercise, together with any other securities and property to
which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The person
in whose name any certificate for shares of Common Stock is issued upon exercise
of this Warrant shall for all purposes be deemed to have become the holder of
record of such shares on the date on which this Warrant was surrendered and
payment of the Purchase Price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the stock transfer
books are open. No fractional share will be issued on exercise of rights to
purchase under this Warrant. If on any exercise of this Warrant, a fraction of
a share results, the Company will pay the cash value of that fractional share,
calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or the date as of
which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.41
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Ling Nen Chuan, whose address is 4563 Petit
Avenue, Encino, California 91436 (the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 41,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a non-public offering pursuant to Section
4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved,
(c) The Shares and the Warrant included in the Unit have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California,
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
/s/ LING NEN CHUAN a California corporation
- -----------------------------
Ling Nen Chuan
4563 PETIT AVENUE
- ----------------------------- By: /s/ ALBERT E. GOSSELIN, JR.
(Address) --------------------------------
Albert E. Gosselin, Jr.,
ENCINO, CA 91436 President and Chief
- ----------------------------- Executive Officer
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.42
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Ling Nen Chuan or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant, "holder,"
or similar terms when the context refers to a holder of the Warrant, refers to
any person who shall at the time be the registered holder of the Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the time number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN JR.
--------------------------------
Albert E. Gosselin Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.43
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
12th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices at 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Sanibel Capital Corporation, whose address
is 129 East Wildwood Court, Grapevine, Texas 76051 (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an
exercise price of $1.00 per share, and the Purchaser desires to acquire each
Unit for a purchase price of $0.60.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 41,667 Units and the Company agrees to sell the
Units to the Purchaser for a purchase price of $25,000 (the "Sale"). The
purchase price is payable by a cashier's check made payable to the Company, or
by wire transfer to an account determined by the Company contemporaneously with
the execution and delivery of this Agreement. The Shares and the Warrant will
be delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that he is able to bear the economic
risk of this investment.
1.4 The Purchaser represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities,
or he has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to him and to evaluate the merits and risks of such an investment on
his behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that he has been furnished by
the Company during the course of this transaction with all information
regarding the Company which he had requested or desired to know; that all
documents which could be reasonably provided have been made available for his
inspection and review; that he has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of his
investment in the Company, and any additional information which he had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a non-public offering pursuant to Section
4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the
Warrant are being purchased for his own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that he will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Unit, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if his representations merely meant that his present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
his representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer of the Shares or the Warrant out of his name only when his
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the Company,
its directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns, harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Purchaser
Questionnaire completed by him or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Unit have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for his review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be deemed
sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except
by a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of California
without regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
Purchaser: The Company:
SANIBEL CAPITAL CORPORATION
By: /s/ RANDY HOWELL POLLUTION RESEARCH AND CONTROL CORP.,
-------------------------- a California corporation
Randy Howell
129 East Wildwood Court
- ----------------------------- By: /s/ ALBERT E. GOSSELIN, JR.
(Address) --------------------------------
Albert E. Gosselin, Jr.,
Grapevine, Texas 76051 President and Chief
- ----------------------------- Executive Officer
(City, State, Zip)
<PAGE> 1
EXHIBIT 4.44
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 41,667 OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Sanibel Capital Corporation or registered
assigns, is entitled, subject to the terms set forth below, to purchase
from Pollution Research and Control Corp., a California corporation (the
"Company"), the above number of fully paid and nonassessable shares of Common
Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00)
per share ("Purchase Price"). The Purchase Price and number of shares of
Common Stock issuable upon exercise hereof shall be subject to adjustment as
provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale of
all or substantially all of the Company's properties and assets, or (v) there
shall be a voluntary or involuntary dissolution, liquidation, or winding up of
the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.45
PURCHASE AGREEMENT
POLLUTION RESEARCH AND CONTROL CORP.
THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the
14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a
California corporation with its principal offices 506 Paula Avenue, Glendale,
California 91201 (the "Company") and Donna Sizemore, whose address is 47
Blackhawk Club Court, Danville, California 84506 (the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Company elects to issue and sell units (the "Units")
consisting of (i) 8,333 shares of Common Stock (the "Shares"), and (ii) one
warrant (the "Warrant") to purchase up to 8,333 shares of Common Stock at an
exercise price of $1.00, and the Purchaser desires to acquire each Unit for a
purchase price of $0.60 per share.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER.
1.1 Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby purchases 8,333 Units and the Company agrees to sell the Units
to the Purchaser for a purchase price of $5,000.00 (the "Sale"). The purchase
price is payable by a cashier's check made payable to the Company, or by wire
transfer to an account determined by the Company contemporaneously with the
execution and delivery of this Agreement. The Shares and the Warrant will be
delivered by the Company to the Purchaser within ten (10) days following the
execution of the Agreement.
1.2 The Purchaser recognizes that the purchase of the Units
involves a high degree of risk in that an investment in the Company is highly
speculative and only an investor who can afford to lose its entire investment
in the Company should purchase the Units.
1.3 The Purchaser acknowledges that she is able to bear the
economic risk of this investment.
1.4 The Purchaser represents that she is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act").
1.5 The Purchaser acknowledges that she has prior investment
experience, including investment in non-listed and non-registered securities, or
she has employed the services of an investment advisor, attorney or accountant
to read all of the documents furnished or made available by the Company to her
and to evaluate the merits and risks of such an investment on her behalf.
<PAGE> 2
1.6 The Purchaser hereby represents that she has been furnished by
the Company during the course of this transaction with all information
regarding the Company which she had requested or desired to know; that all
documents which could be reasonably provided have been made available for her
inspection and review; that she has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of her
investment in the Company, and any additional information which she had
requested.
1.7 The Purchaser hereby acknowledges that this offering has not
been reviewed by the Securities and Exchange Commission (the "Commission")
since this offering is intended to be a nonpublic offering pursuant to Section
4(2) of the Act. The Purchaser represents that the Units, the Shares and the
Warrant are being purchased for her own account, for investment, and not for
distribution or resale to others. The Purchaser agrees that she will not sell
or otherwise transfer such securities unless they are registered under the Act
or unless an exemption from such registration is available.
1.8 The Purchaser understands that the Units, the Shares and the
Warrant have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon her investment
intention. In this connection, the Purchaser understands that it is the
position of the Commission that the statutory basis for such exemption would
not be present if her representations merely meant that her present intention
was to hold such securities for a short period, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period.
The Purchaser realizes that, in the view of the Commission, a purchase now with
an intent to resell would represent a purchase with an intent inconsistent with
her representation to the Company, and the Commission might regard such a sale
or disposition as a deferred sale to which the exemption is not available.
1.9 The Purchaser consents that the Company may, if it desires,
permit the transfer or the Shares or the Warrant out of her name only when her
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state "blue sky" laws
(collectively, the "Securities Laws"). The Purchaser agrees to hold the
Company, its directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns, harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by her contained herein or in the Confidential Purchaser
Questionnaire completed by her or any sale or distribution by the Purchaser in
violation of any Securities Laws.
1.10 The Purchaser consents to the placement of a legend on any
certificate or other document evidencing the Shares, the Warrant and the Common
Stock issuable upon exercise of the Warrant, stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof. The Purchaser is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such securities.
<PAGE> 3
REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY.
The Company represents and covenants to the Purchaser that:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California which has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the Company and
all other actions required to authorize and effect the offer and sale of the
Shares and the Warrant have been duly taken and approved.
(c) The Shares and the Warrant included in the Units have been duly
and validly authorized and, when issued and paid for in accordance with the
terms hereof, will be validly binding obligations of the Company enforceable in
accordance with their respective terms except that the enforceability thereof
may be limited by bankruptcy, insolvency, or other laws affecting the rights of
creditors generally or by general equitable principles.
(d) The Company will at all times during the term of the Warrant
have duly authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of such Warrant.
(e) The shares of Common Stock issuable upon exercise of the
Warrant when issued and paid for in accordance with the terms of the Warrant
will be duly and validly issued, fully paid and non-assessable.
(f) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and the Company is in all material respects complying
therewith.
III. REGISTRATION OF SECURITIES.
The Company acknowledges that it currently has an effective
registration statement on Form S-3 (File No. 33-60035) (the "Registration
Statement") on file with the Securities and Exchange Commission. The Company
shall deliver to Purchaser at the Company's sole expense a copy of the
Registration Statement, and all amendments thereto prior to the consummation of
the Sale. In addition, the Company shall use its best efforts to register, at
the Company's sole expense, the Shares and the shares of the Company's Common
Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to
an amendment to the Registration Statement and provide Purchaser with a copy of
such amended registration statement for her review prior to the effective date
thereof.
IV. MISCELLANEOUS.
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in
<PAGE> 4
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, 506 Paula Avenue, Glendale,
California 91201, Attention: President, with a copy to Patricia Cudd &
Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver,
Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address
listed on the signature page hereof. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Agreement shall not be changed, modified or made except by a
writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
4.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.4 This Agreement and its validity, construction and performance shall
be governed in all respects by the laws of the State of California, without
regard to principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Purchaser: /s/ DONNA M. SIZEMORE The Company:
---------------------
POLLUTION RESEARCH AND CONTROL CORP.,
DONNA M. SIZEMORE a California corporation
42 BLACKHAWK CLUB COURT By: /s/ ALBERT E. GOSSELIN, JR.
(Address) ----------------------------
Albert F. Gosselin, Jr.
DANVILLE, CALIFORNIA 94506 President and Chief
(City, State, Zip) Executive Officer
<PAGE> 1
EXHIBIT 4.46
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER
THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER
APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR
QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 8,333 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JUNE 15, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999
This certifies that, Donna Sizemore or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price").
The Purchase Price and number of shares of Common Stock issuable upon exercise
hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise
is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant,"
"holder," or similar terms when the context refers to a holder of the Warrant,
refers to any person who shall at the time be the registered holder of the
Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of
this Warrant, with the form of subscription at the end of this Warrant duly
executed by the holder, to the Company at its principal office, accompanied by
payment in the amount obtained by multiplying the Purchase Price by the number
of shares of Common Stock specified on the face of this Warrant as may be
adjusted pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant
is not then registered under the Securities Act of 1933, as amended, the holder
of this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for her own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of and
delivered to the holder of this Warrant, a certificate, or certificates, for
the number of fully paid and nonassessable shares of Common Stock to which that
holder shall be entitled on such exercise, together with any other securities
and property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its
outstanding shares of Common Stock, pay a dividend of other securities to the
holders of such shares, or pay a dividend of shares of Common Stock to holders
of any such stock of the Company of any class, this Warrant shall, after that
subdivision, combination, or dividend, evidence the right to purchase the
number of shares of Common Stock or other securities that would have been
issuable to the holder of this Warrant as a result of that subdivision,
combination or dividend with respect to the shares of Common Stock which were
purchasable under this Warrant immediately before that subdivision,
combination, or dividend or any record date thereafter. If the Company shall
at any time subdivide the outstanding shares of Common Stock, the Purchase
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that combination shall be proportionately increased. Any
judgment under this Section 4 shall become effective at the close of business
on the date the subdivision, combination or dividend becomes effective
retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of
the Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of
the date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action avoid, or seek to avoid, the observance or performance of any
of the terms of this Warrant, but will, at all times and in good faith, assist
in carrying out all those terms and in taking all action necessary or
appropriate to protect the rights of the holder of this Warrant against other
impairment. Without limiting the generality of the above provision, the
Company:
(i) will take all necessary or appropriate action in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this
Warrant;
(ii) will not increase the par value of the shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely for
issuance upon exercise of this Warrant, all shares of Common
Stock or other securities from time to time issuable upon
exercise of this Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (appropriately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or
receive dividends or be considered a shareholder of the Company for any
purpose, nor shall anything in this Warrant be construed to confer on any
holder of this Warrant, as such, any rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of shareholders, to receive dividends or subscription rights
or otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: June 15, 1996 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 4.47
THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
OPTION TO PURCHASE 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JULY 1, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 30, 1999
This certifies that Randy Foy or registered assigns, is entitled,
subject to the terms set forth below, to purchase from Pollution Research and
Control Corp., a California corporation (the "Company"), the above number of
fully paid and nonassessable shares of Common Stock of the Company ("Common
Stock") at a purchase price of One Dollar and 38/100 ($1.38) per share
("Purchase Price").
This Option is exercisable at any time to and including 5:00 p.m., Los
Angeles time, on June 30, 1999.
Registered Owner: Randy Foy
Purchase Price: $1.38 per Share
1
<PAGE> 2
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made and entered into
effective as of July 1, 1996, by and between Pollution Research and Control
Corp., a California corporation ("PRCC") and Randy Foy ("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 25,000 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 25,000 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 $1.38 (the "Option Price"), and for purposes of record, the bid
market price on this date was $1.25.
3. OPTION PERIOD. The option period shall commence on the date
of this Agreement (the "Date of Grant") and shall terminate three (3) 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 Shares.
5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), and no
Shares may be sold, offered for sale, transferred, pledged, hypothecated or
otherwise disposed of except in compliance
2
<PAGE> 3
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 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 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, the high risks of investing in
PRCC, and 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 protect his
interests in connection with the transaction;
3
<PAGE> 4
(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, are
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 ON 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:
4
<PAGE> 5
"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 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.
506 Paula Avenue
Glendale, CA 91201
Attn: President
OPTIONEE: Randy Foy
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.
5
<PAGE> 6
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
(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/ ALBERT E. GOSSELIN, JR.
--------------------------------
Albert E. Gosselin, Jr.,
President and Chief Executive Officer
OPTIONEE:
/s/ RANDY FOY
------------------------------------
Randy Foy
------------------------------------
6
<PAGE> 7
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.
- ---------------------------------- ----------------------------
(Print Your Name) Signature
7
<PAGE> 1
EXHIBIT 4.48
NEIL C. SULLIVAN
1901 Avenue of the Stars
Suite 2000
Los Angeles, California 90067
September 20, 1996
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
Re: Purchase of Stock and Warrants
------------------------------
Gentlemen:
This will confirm the agreement between Pollution Research and Control
Corp., a California corporation (the "Company"), and Neil C. Sullivan, an
individual ("Sullivan"), with respect to the purchase by Sullivan of common
stock and stock purchase warrants from the Company. In consideration for
$300,000 cash, paid by Sullivan to the Company, the Company shall issue and
deliver 350,000 shares of common stock (the "Shares") and warrants to purchase
300,000 shares of common stock at a price of $1.50 per share for a period of
three years (the "Warrants"). The number of shares purchasable upon exercise of
the Warrants (the "Warrant Shares") shall be adjusted to give effect to stock
splits, stock dividends, combinations, reclassifications and similar changes
affecting the outstanding common stock.
The Company shall as soon as possible file a registration statement on
Form S-3 under the Securities Act of 1933, as amended, (the "Act"), to register
the Shares and the Warrant Shares and the Company shall use its best efforts to
cause such registration statement to be declared effective as soon as possible
and to maintain the effectiveness of said registration statement for a period of
three years from its effective date.
The Company shall pay all expenses, other than Sullivan's brokerage
commissions or transfer taxes, relating to the registration of the Shares and
the Warrant Shares. The Company agrees to indemnify and hold harmless Sullivan
against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to which Sullivan may become subject under the Act or otherwise that
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in any registration statement relating to the
Shares and the Warrant Shares or any
<PAGE> 2
September 20, 1996
Pollution Research Control
Page 2
amendment thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except to the extent that any such untrue statement or
alleged untrue statement or omission or alleged omission is made in reliance
upon and in conformity with written information furnished to the Company by
Sullivan expressly for use in such registration statement or any amendment
thereto.
The Company represents and warrants that (i) the Shares and the Warrant
Shares, when issued and paid for, shall be duly authorized, validly issued,
fully paid and nonassessable, and (ii) this agreement has been duly authorized
by all necessary corporate action and is the valid and binding agreement of the
Company, enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, or similar laws
affecting creditors rights generally or by the principles governing the
availability of equitable remedies.
If this letter sets forth our understanding, please execute below and
this letter will become a valid and binding agreement between us.
/s/ NEIL C. SULLIVAN
- ----------------------------------
Neil C. Sullivan
Agreed this 20th day of September, 1996
POLLUTION RESEARCH AND CONTROL CORP.
By: /s/ ALBERT E. GOSSELIN, JR.
-----------------------------
Albert E. Gosselin, Jr.,
President
<PAGE> 1
EXHIBIT 4.49
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
WARRANT TO PURCHASE 300,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM SEPTEMBER 20, 1996
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 20, 1999
This certifies that, Neil C. Sullivan or registered assigns, is
entitled, subject to the terms set forth below, to purchase from Pollution
Research and Control Corp., a California corporation (the "Company"), the above
number of fully paid and nonassessable shares of Common Stock of the Company
("Common Stock") at a purchase price of One Dollar ($1.50) per share ("Purchase
Price"). The Purchase Price and number of shares of Common Stock issuable upon
exercise hereof shall be subject to adjustment as provided in this Warrant.
This Warrant is exercisable at any time, or from time to time, to and
including 5:00 p.m., Los Angeles time, on September 20, 1999, unless sooner
exercise is required pursuant to the terms of this Warrant.
DEFINITIONS.
As used in this Warrant, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Warrant.
1
<PAGE> 2
1.2 "Common Stock," when used with reference to stock of the Company,
means all shares, now or hereafter authorized, of the class of the Common Stock
of the Company presently authorized and stock of any other class into which
those shares may hereafter be changed.
1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or
similar terms when the context refers to a holder of the Warrant, refers to any
person who shall at the time be the registered holder of the Warrant.
2. EXERCISE.
The holder of this Warrant may exercise it in full by surrender of this
Warrant, with the form of subscription at the end of this Warrant duly executed
by the holder, to the Company at its principal office, accompanied by payment
in the amount obtained by multiplying the Purchase Price by the number of
shares of Common Stock specified on the face of this Warrant as may be adjusted
pursuant to the terms of this Warrant. Payment shall be made in cash,
cashier's or certified check payable to the Company, by the surrender of any
notes of the Company having an unpaid principal and interest balance at least
equal to such payment (designating the portion of such balance to be applied),
or by any combination of such methods.
The holder of this Warrant may exercise it in part by surrendering it,
accompanied by payment as provided above, except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying the
Purchase Price by the number of shares of Common Stock (without giving effect
to any adjustment of that number) designated by the holder in a written
statement accompanying this Warrant. On partial exercise, the Company shall,
unless this Warrant has expired, promptly issue and deliver to the holder of
this Warrant a new Warrant or Warrants of like tenor and dated the date hereof
in the name of that holder providing for the right to purchase that number of
shares of Common Stock (without giving effect to any adjustment of that number)
for which this Warrant has not been exercised.
In the event the Common Stock issuable upon exercise of this Warrant is
not then registered under the Securities Act of 1933, as amended, the holder of
this Warrant shall, upon exercise of this Warrant, deliver to the Company an
investor's certificate with respect to such shares to the effect that such
shares are being acquired for investment purposes only and for his own account,
and not as a nominee or agent for any other person and not with a view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act of 1933, as amended.
3. ISSUANCE OF CERTIFICATES.
As soon as possible after full or partial exercise of this Warrant, the
Company, at its expense, will cause to be issued in the name of and delivered
to the holder of this Warrant, a certificate, or certificates, for the number
of fully paid and nonassessable shares of Common stock to which that holder
shall be entitled on such exercise, together with any other securities and
property to which that
2
<PAGE> 3
holder is entitled on such exercise under the terms of this Warrant. The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Purchase Price and any applicable taxes was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. No fractional share will be issued on
exercise of rights to purchase under this Warrant. If on any exercise of this
Warrant, a fraction of a share results, the Company will pay the cash value of
that fractional share, calculated on the basis of the Purchase Price.
4. SUBDIVISIONS OR COMBINATIONS.
If, at any time during the term hereof, the number of shares of Common
Stock outstanding is increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up, then, immediately following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased and the
Purchase Price shall be decreased in proportion to such increase in outstanding
shares. If at any time during the term hereof the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common Stock, immediately following the record date for such combination, the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be decreased and the Purchase Price shall be increased in proportion to such
decrease in outstanding shares.
If the Company shall, at any time, subdivide or combine its outstanding
shares of Common Stock, pay a dividend of other securities to the holders of
such shares, or pay a dividend of shares of Common Stock to holders of any such
stock of the Company of any class, this Warrant shall, after that subdivision,
combination, or dividend, evidence the right to purchase the number of shares
of Common Stock or other securities that would have been issuable to the holder
of this Warrant as a result of that subdivision, combination or dividend with
respect to the shares of Common Stock which were purchasable under this Warrant
immediately before that subdivision, combination, or dividend or any record
date thereafter. If the Company shall at any time subdivide the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before
that subdivision shall be proportionately decreased, and, if the Company shall
at any time combine the outstanding shares of Common Stock, the Purchase Price
then in effect immediately before that combination shall be proportionately
increased. Any judgment under this Section 4 shall become effective at the
close of business on the date the subdivision, combination or dividend becomes
effective retroactive to the record date therefor, if any.
5. REORGANIZATION, RECLASSIFICATION.
If the Common Stock issuable on exercise of this Warrant shall be
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization,
3
<PAGE> 4
reclassification, or otherwise (other than a subdivision or combination of
shares provided for above, the holder of this Warrant shall, on its exercise,
be entitled to purchase, in lieu of the Common Stock which that holder would
have become entitled to purchase but for such change, a number of shares of
such other class or classes of stock which the holder of this Warrant would
have owned or have been entitled to receive after such change, had this Warrant
been exercised immediately before that change or any record date therefor.
6. CONSOLIDATION, MERGERS.
If at any time there shall be a capital reorganization of the Common
Stock issuable upon exercise of this Warrant (other than a combination,
reclassification, exchange or subdivision of shares provided for elsewhere in
this Warrant) or a merger or consolidation of the Company with or into another
corporation, or the sale of the Company's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the holder of this Warrant shall thereafter be entitled to receive on
exercise of this Warrant, during the period specified in this Warrant and on
payment of the Purchase Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation, to which a holder of the Common
Stock deliverable on exercise of this Warrant would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder of this Warrant after
the reorganization, merger, consolidation, or sale such that the provisions of
this Warrant (including adjustments of the Purchase Price then in effect and
number of shares purchasable on exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event on exercise of this Warrant.
7. NOTICE.
The Company shall promptly give written notice of each adjustment of the
Purchase Price or the number of shares of Common Stock or other securities
issuable on exercise of this Warrant, by certified mail, return receipt
requested, postage prepaid, to the registered holder of this Warrant at that
holder's address as shown on the Company's books. The notice shall state the
adjustment and show in reasonable detail the facts on which that adjustment is
based.
If (i) the Company shall pay any dividend payable in stock on its
Common Stock or make any other distributions to the holders of its Common Stock
(other than a dividend in Common Stock exempt from the adjustment provisions of
this Warrant), or (ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other rights, or (iii) there shall be any capital reorganization or
reclassification of the Company's Common Stock or consolidation or merger of
the Company with or into another corporation, or (iv) there shall be any sale
of all or substantially all of the Company's properties and assets, or (v)
there shall be a voluntary or involuntary dissolution, liquidation, or winding
up of the
4
<PAGE> 5
Company, or (vi) the Company shall have received an offer approved by the Board
of Directors to purchase all or substantially of its assets; then, in each
case, the Company shall give at least 15 calendar days prior written notice (by
certified mail, return receipt requested) to the registered holder of this
Warrant at the address of that holder shown on the books of the Company, of the
date as of which the books of the Company shall close or a record shall be
taken for such dividend, distribution, or subscription rights, or the date as
of which the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up shall take place. That notice shall
also specify the date as of which the holders of the Common Stock of record
shall participate in that dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable on such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up (on which date, in the
event of voluntary or involuntary dissolution, liquidation, or winding up of
the Company, or consolidation or merger in which the Company is not a surviving
entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant
shall cease).
8. COVENANTS.
The Company covenants that it will not, by amendment of its articles of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action
avoid, or seek to avoid, the observance or performance of any of the terms of
this Warrant, but will, at all times and in good faith, assist in carrying out
all those terms and in taking all action necessary or appropriate to protect
the rights of the holder of this Warrant against other impairment. Without
limiting the generality of the above provision, the Company:
(i) will take all necessary or appropriate action in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on exercise of this Warrant;
(ii) will not increase the par value of the shares of Common
Stock receivable on the exercise of this Warrant above the amount
payable for those shares on such exercise; and
(iii) will at all times reserve and keep available, solely
for issuance upon exercise of this Warrant, all shares of Common stock
or other securities from time to time issuable upon exercise of this
Warrant.
9. CHANGES IN WARRANT.
The form of this Warrant need not be changed because of any adjustment
in the Purchase Price or in the number of shares of Common Stock purchasable
upon its exercise. A Warrant issued after any such adjustment or any partial
exercise or in replacement may continue to express the same
5
<PAGE> 6
Purchase Price and the same number of shares of Common Stock (approximately
reduced in the case of partial exercise) as are stated on the face of this
Warrant as initially issued, and that Purchase Price and the number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.
10. LOST CERTIFICATES.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant, upon delivery of any
indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
11. TRANSFERABILITY.
This Warrant shall not be transferred or assigned unless the Company
receives an opinion of counsel reasonably acceptable to the Company (which
counsel may be counsel for the Company), stating that such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and the registration and qualification requirements under applicable state law.
12. GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of California.
13. TAXES.
The Company shall pay all documentary, stamp or other transactional
taxes attributable to the issuance or delivery of shares of Common Stock of the
Company upon exercise of all or any part of this Warrant; provided, however,
that the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of this Warrant.
14. RIGHTS OF WARRANT HOLDER.
No holder of this Warrant, as such, shall be entitled to vote or receive
dividends or be considered a shareholder of the Company for any purpose, nor
shall anything in this Warrant be construed to confer on any holder of this
Warrant, as such, any rights of a shareholder of the Company or any right to
vote, give or withhold consent to any corporate action, to receive notice of
meetings of shareholders, to receive dividends or subscription rights or
otherwise.
6
<PAGE> 7
15. AMENDMENT.
This Warrant and any of its terms may be changed only by a written
instrument signed by the Company and the holder of this Warrant.
DATED: September 20, 1996 The Company:
POLLUTION RESEARCH AND CONTROL CORP.,
a California corporation
BY: /s/ ALBERT E. GOSSELIN, JR.
---------------------------------
Albert E. Gosselin, Jr.,
President and Chief
Executive Officer
7
<PAGE> 1
EXHIBIT 5.0
PATRICIA CUDD & ASSOCIATES
ATTORNEY AT LAW
50 SOUTH STEELE STREET, SUITE 222
DENVER, COLORADO 80209
TELEPHONE: (303) 394-2197 FAX: (303) 394-2251
October 14, 1996
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
Gentlemen:
We have acted as counsel to Pollution Research and Control Corp., a
California corporation (the "Company"), in connection with the Registration
Statement on form S-3 (the "Registration Statement") filed with the U.S.
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, on or about the date hereof. The Registration Statement
relates to 3,240,003 shares of common stock, no par value per share (the "Common
Stock") underlying the Company's outstanding options (the "Options") and
warrants (the "Warrants") which may be issued upon exercise by the holders of
all of the Options and Warrants on or prior to the various expiration dates
thereof during the period from June 30, 1997, through January 6, 2002, and an
additional 1,375,003 shares of Common Stock otherwise being offered by selling
shareholders.
In connection with this opinion, we have examined the Company's
Articles of Incorporation; Certificates of Amendment to the Company's Articles
of Incorporation; the Company's By-Laws; minutes of the Company's corporate
proceedings, as made available to us by officers of the Company; an executed
copy of such Registration Statement, and all exhibits thereto in the form filed
with the Commission; and such matters of Law deemed necessary by us in order to
deliver the within opinion.
In the course of our examination, we have assumed the genuineness of
all signatures, the authority of all signatories to sign on behalf of their
principals, if any, the authenticity of all documents submitted to us as
original documents, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the due execution and
delivery of all documents where due execution and delivery are a prerequisite
to the effectiveness thereof. As to certain factual matters, we have relied
upon information furnished to us by officers of the Company.
On the basis of the foregoing, and solely in reliance thereon, we are
of the opinion that the shares of Common Stock have been duly authorized and,
when issued for consideration received by the Company upon the exercise by the
holders of the Options and Warrants and payment of the exercise price as
provided in the Option and Warrants in accordance with the terms thereof, will
be validly issued, fully-paid and nonassessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which forms a part thereof.
/s/ PATRICIA CUDD & ASSOCIATES
<PAGE> 1
EXHIBIT 23.2
[GREENBERG & JACKSON LETTERHEAD]
CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 (the "Registration Statement") of Pollution Research and
Control Corp. (the "Company") of the Company's Financial Statements and the
related Notes thereto, including our report thereon dated March 6, 1996, set
forth at pages F-1 through F-14 of the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995. We further consent to the
reference to our firm under the caption "Experts" in the Prospectus which forms
a part of the Registration Statement.
Greenberg & Jackson /s/ GREENBERG & JACKSON
An Accountancy Corporation ----------------------------------
September 20, 1996
