U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
{X} Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required) for the fiscal year ended December
31, 1999
{ } Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
Pollution Research and Control Corp.
------------------------------------
(Name of Small Business Issuer as Specified in its Charter)
California 95-2746949
---------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
506 Paula Avenue, Glendale, California 91201
- -------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Small Business Issuer's telephone number, including area code (818) 247-7601
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
--------------------------
(Title of Class)
Check whether the Small Business Issuer (1) has filed all reports required to be
filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Small Business Issuer
was required to file such reports), and (2) has been subject to such filing
requirements of the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-KSB or any amendment to
this Form 10-KSB {X}.
Small Business Issuer's revenues for its most recent fiscal year: $7,314,976.
The aggregate market value of the voting stock held by non-affiliates of the
Small Business Issuer, computed by reference to the average bid and asked prices
of such stock on April 6, 2000 was $12,000,000.
Total number of pages - 396 Exhibit Index is located at Page E-1
DOCUMENTS INCORPORATED BY REFERENCE:
Certain exhibits to this Annual Report as set forth in the Exhibit
Index located at page E-1.
1
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP.
Form 10-KSB
For the Fiscal Year Ended December 31, 1999
TABLE OF CONTENTS
Part I Page
----
Item 1. Description of Business 4
General 4
History of the Company 4
The Air Pollution Industry 5
Instrument Market 6
Control Market 6
Governmental Approval 7
Governmental Regulation and Enforcement 8
Company Products 8
Marketing and Sales; Backlog 9
Foreign Sales 10
Manufacturing and Purchasing 10
Research and Development 11
Employees 11
Competition 11
Intellectual Property 12
Item 2. Description of Properties 12
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 13
Part II.
Item 5. Market for Common Equity and Related Stockholder
Matters 14
Item 6. Management's Discussion and Analysis or Plan of
Operation 14
Liquidity and Capital Resources 16
Seasonality 17
Item 7. Financial Statements 17
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 17
2
<PAGE>
TABLE OF CONTENTS
(continued)
Part III Page
----
Item 9. Directors, Executive Officers, Promoters
and Control Persons;
Compliance with Section 16(a) of the Exchange Act 18
Directors, Executive Officers and Key Employees 18
Family Relationships 18
Business Experience 18
Section 16(a) Beneficial Ownership
Reporting Compliance 20
Item 10. Executive Compensation 20
Executive Compensation 20
Compensation of Directors 21
Employment Agreements 21
Item 11. Security Ownership of Certain Beneficial Owners and
Management 22
Item 12. Certain Relationships and Related Transactions 23
Item 13. Exhibits and Reports on Form 8-KA
(a) Exhibits 24
(b) Reports on Form 8-KA 24
3
<PAGE>
Item 1. Description of Business
General
The Company's core business for over twenty years has been primarily the
design, manufacture and marketing of automated continuous monitoring 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, which is classified as
"core business related." Currently, the Company's primary market focus for its
core business is The People's Republic of China. See "History of the Company and
Recent Developments."
History of the Company and Recent Developments
The Company was organized as a California corporation on December 24, 1971,
under the name of "A.E. Gosselin Engineering, Inc." as a wholly-owned subsidiary
of "Pollution Research and Control Corp." ("PRCC"), a California corporation
co-founded in 1966 by Albert E. Gosselin, Jr., the Company's President and Chief
Executive Officer, and his wife, Barbara Gosselin, an executive officer and
director of the Company. Mr. and Mrs. Gosselin founded the Company to design,
manufacture and market air pollution monitoring equipment for ambient air (i.e.,
the surrounding air) as distinguished from the customer stack source monitoring
systems then being designed, manufactured and sold by PRCC. The name of the
Company was changed to "Dasibi Environmental Corp." on March 22, 1973.
The Company was operated as a wholly-owned subsidiary of PRCC until its
initial public offering of securities in May 1985. In 1984, PRCC discontinued
its research and development activities and assigned them to the Company. From
1984 through May 1985, PRCC acted primarily as a holding company for the Company
and Applied Conservation Technology, Inc. ("ACT"), then a wholly-owned
subsidiary of PRCC engaged in the business of providing environmental impact
reports to electric utilities. ACT was purchased by its management from PRCC in
November 1986. Gary Dudley, a director and former Vice President of the Company
and a former executive officer and director of PRCC, has been the President and
a principal shareholder of ACT, a diversified environmental consulting firm now
located in Westminster, California, since November 1986. (See Item 9.
"Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act - Directors, Executive Officers and Key
Employees.")
The Company changed its name to "Pollution Research and Control Corp.," the
name of its former parent, PRCC, in November 1989. In January 1990, the Company
acquired all of the issued and outstanding shares of Common Stock, $1.00 par
value per share, of an inactive California corporation, organized by Mr. and
Mrs. Gosselin as co-founders under the name of "Baral Engineering, Inc." in July
1976, which changed its name to "Dasibi Environmental Corp." ("Dasibi") in
January 1990. All of the Company's operations were transferred to Dasibi
subsequent to the acquisition. Also in 1990, the Company changed its fiscal year
from June 30 to December 31.
4
<PAGE>
In January, 1998, the Company began a reorganization program. The Company's
management believed that it could secure long-term contractual business in The
People's Republic of China ("China") sufficient to allow expansion of the
Company's business independent of competitive price pressures which have been
experienced since 1994 (see "Instrument Market" under this Item 1).
In June 1998, the Company signed a $5.1 million dollar contract with China
to supply air monitoring equipment and software in integrated systems to
monitor, report, and predict on local regions the air pollutant levels in an
eleven city network designated as Phase I and related to a China monitoring plan
for over 600 cities. The effective starting date was coincident with the
Company's arrangement of U.S. Bank and Export-Import (Ex-Im) guarantee for
financing which occurred in June 1999. A multitude of "firsts" or learning steps
for all parties involved contributed to the length of the financing period.
During this time, in March, 1999 the Company signed a letter of intent in
Beijing, China with The State Environmental Protection Agency for Phase II , an
additional 20 to 25 cities including expansion of the network of the eleven
cities of Phase I.
An indicated date for the contract signing of Phase II is April, 2000 and
at this time appears likely. Since the Company has chosen to focus primarily on
the China market, it is vital that a continuous flow of business be obtained. To
date, this has not been the case and a need for a high level of staffing
continuously has contributed to a profit and loss "checkerboard" pattern.
Management believes that award of Phase II with such potential side effects as
position for future phases and possible joint venture projects in China would
allow continuous profitable operation. Loss of Phase II would have a material
adverse effect on the Company.
The Air Pollution Industry
Air pollution consist of certain gases or particles, generally the products
of combustion or other industrial processes, which are or may be hazardous to
human health. Pollutants include carbon monoxide, ozone, oxides of sulfur and
nitrogen, hydrogen sulfide and particles. Small amounts of these pollutants,
such as a few parts per million or part per billion, may be harmful. The
instruments produced and sold by the Company, the "core business" detect and
measure these pollutants and are also utilized in calibrating other pollution
measurement equipment. Any systems or processes such as the Company's "flue gas
purification system" patent employ chemical and mechanical means to remove these
same pollutants from combustion exhaust gases. (See "Research and Development"
under this Item 1. "Description of Business").
Industrial entities require equipment to detect the presence and measure
the level of pollutants in order to comply with governmental regulations and
government regulatory agencies require equipment to enforce governmental
standards. Currently, international priority has been given to control (and
therefore to monitor) such gaseous pollutants as sulfur dioxide, oxides of
nitrogen, carbon monoxide, ozone and particulates (suspended dust).
Although manual sampling of both gases and particulates is still performed
routinely, improvements in the reliability and accuracy of automated, continuous
monitoring equipment, such as that manufactured and sold by the Company, have
made manual sampling less desirable and automated monitoring increasingly
common.
5
<PAGE>
In basic continuous monitoring instruments, ambient air is taken into a
manifold, the function of which is to direct a fast-moving stream of ambient air
to the monitor. The instrument may use a filter to remove particulates or
scrubbers to remove gasses that might interfere with accurate measurement of the
pollutant. The pollutant is then introduced into a measurement cell environment
where it undergoes a chemical or physical reaction, the output of which can be
converted to an electrical signal which, in turn, can be read locally or
transmitted to some remote monitoring plant or computer. Measurement cells can
be based in many different methods for the detection of the pollutants of
interest. Thus, an instrument designer may have many different methods available
by which a pollutant may be identified and measured.
Some methods used by the Company are flame photometry (wherein
concentrations of gaseous elements are measured by burning them and optically
observing the color and intensity of the flame generated thereby), infrared
absorption (wherein concentrations of infrared absorbing gases are measured by
detecting changes in intensity of a radiation beam closed cell),
chemiluminescence (wherein a chemical generates a light or a wave length
measurable by a photo multiplier tube), ultraviolet spectroscopy (wherein the
pollutants' decrease in ultraviolet light intensity is converted by a
photoelectric detector to an electric signal) and beta ray attenuation (wherein
a radioactive source's beta ray emanation is reduced in direct proportion to the
mass of a particle).
Instrument Market
The air pollution monitoring equipment market includes two markets: (i)
source instrumentation for monitoring the source's pollutant emissions as they
are discharged into the air and (ii) ambient air for instrumentation for
monitoring ambient air pollution. The two markets are quite different in that
source instrumentation is generally not subject to rigid governmental-imposed
guidelines because of the difficult analyses involved, while ambient air
instruments are subject to rigid governmental guidelines because the pollutants
are easier to define and measure. Since 1994, the ambient market worldwide
except for China, India, and the Philippines has approached saturation with
extremely competitive bid situations which have significantly impacted gross
profit margins. Since 1994, the Company has focused a majority of its world-
wide marketing budget and effort to China, for cost efficient effect to improve
gross profit margin. In 1998, the Company directed its entire marketing effort
to China.
Generally, the Company sells its instruments for use in systems for the
measurement of ambient air pollution. In a system, air pollution monitoring
instruments are united with additional equipment to provide a comprehensive
measurement unit. In an ambient air instrumentation system, the monitoring
instrument is combined with a manifold intake, a calibrator and data
transmitters. The system samples the ambient air, measure the pollutants and
transmits the data. The Company designs and manufactures all instruments used in
a system, including the data tabulation and transmission devices.
Control Market
The air pollution control market makes only minimal use of measurement
instrumentation. This market is concerned with "purification" of exhaust gases
emanating from combustion-related or even chemical-only processes. The
6
<PAGE>
"purification" process consists of using various types of equipment which may or
may not involve catalysts and/or reagents to cause reactions and/or mechanical
removal of a high percentage of selected air pollutants. The highest percentage
obtainable will relate, at any given time, to the state-of-the-art of the
technology involved and the economics of implementing the technology. The market
is old, in essence dating to the beginnings of the industry when soot collectors
were first installed on combustion chambers. However, the market size is
embryonic since technology has not materially advanced and implementation
remains costly so as not to allow any generally accepted control of source
pollutants. The Company filed a patent application in April 1994 for a "flue gas
purification system," which issued in 1996, and a second patent issued on the
system in March, 1999, however, the commercial viability of a market for this
invention is not assured. (See "Research and Development" and "Intellectual
Property" under this Item 1. "Description of Business.")
Governmental Approval
The Environmental Protection Agency (the "EPA") administers the federal
Clean Air Act, as amended by the Clean Air Act Amendments of 1990, and approves
ambient air pollution monitoring equipment meeting certain requirements as
either reference or equivalent methods for measuring pollutants. The EPA
established the reference method as the basic method for measuring a pollutant.
An equivalent method measures the same pollutant utilizing a different technique
which achieves results identical to those of the referenced method.
As a practical matter, before a monitoring instrument can be sold in the
United States, it must receive EPA-approval as either a "reference" or
"equivalent" method. Such approvals are given only after rigorous and expensive
testing by the applicant and the submission to, and approval by, the EPA of the
results of such testing. The testing and approval process generally requires
between 12 and 18 months. Following approval, the EPA typically acquires and
tests a production model of the device. If the model being tested does not meet
the standards established by the approval process, the approval may be
withdrawn.
Each of the Company's models of ozone monitors and its sulfur dioxide and
oxides of nitrogen monitors have been approved as equivalent methods by the EPA.
Additionally, the Company's carbon monoxide have been approved as equivalent
methods by the EPA. The Company is currently testing a particulate analyzer
(beta ray attenuation) for approval as an equivalent method by the EPA. The
Company has never had, or been threatened with, a recall as the result of
subsequent testing by the EPA of a production model of any of its instruments.
The Company believes that, as the performance of air monitoring equipment
improves and monitoring technology becomes available in the market, government
regulatory agencies tend to adopt regulations requiring the use of such
technology. The Company has never been required to modify or discontinue any of
its products as a result of improved technology. However, there can be no
assurance that future technological improvements will not mandate changes in, or
cause the obsolescence of, Company products.
7
<PAGE>
Governmental Regulation and Enforcement
Legislation requiring more precise air pollution monitoring and enforcement
is increasing as the sophistication of the technology improves and as concern
for the environment, particularly the depletion of the ozone layer, becomes more
acute. The Clean Air Act and the Clean Air Act Amendments of 1990 (the "1990
Amendments"), require increased control of industrial air pollution and
represent an increasing threat of shut-down for U.S. industrial concerns which
fail to obtain necessary permits and engage in other conduct violative of the
legislation. Because increased control requires increased management and
monitoring of air pollutants by government and industry, the Company expects,
but cannot assure, an increasing market for its products. Company management
believes that governmental enforcement policy also has a significant effect on
the demand for the Company's products. A relaxation during 1982 in the federal
enforcement of governmental standards resulted in a decrease in demand for the
Company's products. Since then, the worldwide trend toward increasingly
stringent environmental standards for industrial air pollution together with
stricter governmental enforcement of environmental regulations, is expected by
management to cause continued expansion of segments of the analytical
instruments market and a continued increase in demand for the Company's
products. In essence, the Company furnishes a product that the customer does not
want to buy voluntarily. In previous years, price difference was not significant
to the selection process. Since 1994, sizeable discounts have become significant
to the purchasers.
Company Products
In 1972, the Company developed, and in 1974 initially marketed, the first
ultraviolet ozone monitor, of which eight models are currently marketed by the
Company, including high concentration, manual, remote and
microprocessor-controlled versions. The Company will continue to seek to develop
new versions of its basic model of ozone monitor, but does not expect any change
in the basic principle upon which the instrument operates. Since 1974 the
Company has been generally considered the leader in ozone measurement technology
in the world.
The Company developed microprocessor-controlled carbon monoxide, sulfur
dioxide and oxides of nitrogen monitors in 1981, 1986 and 1987, respectively.
Calibration equipment, which is utilized to independently verify the
measurements made by other monitoring equipment, was first manufactured and sold
by the Company in 1976 and known as the "Auditor," was followed by a
manually-operated, portable model which performs similar functions. In 1990,
both of these models were superseded by the Company's Model 5008
state-of-the-art, programmable calibration equipment.
The Company completed development, in 1991, of a Model 7001 beta-gauge to
measure sub- micronic particulates, a Model 8001 data-logger to gather and
transmit measured air pollutant information.
In February 1994, the Company acquired the technology and inventory of the
Byron Hydrocarbon Analyzer line which resulted in a completion of the ability to
offer a System 1000. This analyzer is a micro- processor controlled, gas
chromatograph type methane, non-methane analyzer designated as Model 302.
8
<PAGE>
All instruments plus proprietary reporting and predictive software (See
"Research and Development") comprise a System 1000 which can serve as a
stand-alone satellite in a regional monitoring network.
The Company offers a two-year warranty on all of its instruments, with the
exception of certain components, such as lamps, which have short lives. With
respect to such components, the Company passes on to the customer the warranty
(usually one year) which it receives from the manufacturer. The Company's
warranty provides for repair or replacement of defective products. During each
of the last five fiscal years, the Company has been required to honor its
warranty with respect to less than 0.3% of total instruments sales during each
such year.
Marketing and Sales; Backlog Instruments
The marketing and sales activities of the Company include advertising by
mail and in trade journals (primarily Pollution Equipment News and Air Pollution
Control Association Journal) and attendance and exhibition at worldwide air
pollution conferences. The Company attends the annual conference of the Air
Pollution Control Association as well as worldwide conferences. The Company's
core business instruments have been sold to customers world-wide, including
industrial manufacturers; federal, state, city, local and foreign governmental
agencies; major industrial companies; and educational and research institutions
in over 30 countries. Sales made in the United States are handled directly by
the Company's sales staff. Nearly all of the Company's foreign sales are made to
distributors who, in turn, resell to the end users. The Company sells to these
distributors at a discount from the listed price. Management believes that,
normally, the loss of a distributor who may account for a large percentage of
sales would have little impact on net revenues as the end users of the Company's
products could be transferred to new distributors.
An exception in foreign sales is China. Here the Company's distributor
serves a dual role with primary emphasis on a role as a representative, when the
Company sells direct to the government. The recent China contract (See "Foreign
Sales") is a direct sale. Further, it is expected that a loss of this
distributor or representative would have a materially adverse impact on the
Company's revenues.
Historically, foreign sales represented approximately 50 percent of the
Dasibi Environmental subsidiary - the core business. Currently foreign sales
account for approximately 85%. In 1999, one customer, China, accounted for 67%
of the sale of the Company products.
The Company's core business sales in the export market are evenly
distributed among all of its products. Export sales are billed and paid in
United States dollars only. In 2000, it is expected that one customer, China,
may account for as much as 90% of the sale of the Company products.
The Company's core business instruments have been sold during the past 10
years to over 500 customers in the U.S. and over 30 foreign countries and have
been made up of a small percentage (3% to 5%) industrial manufacturers of
Fortune 500 size, and the remaining percentage in state, city, local, federal,
foreign governmental agencies, and educational and research institutions. The
technological life of the largest selling instrument of the Company to nearly
all of the referenced customers - the 1003-AH Ozone Monitor, is thirty years and
counting - still ordered currently. Since 1994 a competitive price pressure by
9
<PAGE>
large instrument manufacturers has resulted in continually declining sales with
a corresponding loss in the total number of customers each year. Therefore while
the percentages indicated above are fairly stable, the Company has reorganized
to focus its marketing and sales efforts to a single, but largest market in the
world. The Company now has a "base" core business of customers in the U.S. and
around the world which is relatively small but requires only minimum marketing
effort, and a potentially large China business which can be pursued efficiently.
Historically, none of the Company's business has been subject to the
re-negotiation of profits, and no government orders have ever been terminated.
The indicated core business backlog at December 31, 1999 was approximately
$400,000 which amount the Company considers immaterial. However, the Company has
a letter of intent from China for approximately 10 to 12 million dollars. The
Company believes that the contract will be signed during April, 2000 and that
the project can be commenced no later than July, 2000. Commencement of the
project before the end of July in the year 2000 is a material condition to the
Company's profitability or loss status for the year 2000.
Foreign Sales
The following table sets forth certain information regarding the Company's
foreign sales for the last two fiscal years:
Year Ended
December 31,
------------
1999 1998
---- ----
(In thousands)
Aggregate sales to unaffiliated foreign customers:
Europe and The United Kingdom $ 358 $ 987
Asia and Pacific Rim $5,200 $ 934
Latin America & Other $ 173 $ 397
During the fiscal year ended December 31, 1998 no one customer accounted
for more than 10% of net sales. During fiscal 1999 China accounted for more than
65% of net sales.
Historically, backlog has not been significant to the Company's operations
because orders usually require delivery in 45 to 60 days. As of December 31,
1999, the Company had approximately $400,000 in "firm" orders which required
delivery in 90 days or less, a backlog which the Company does not consider
significant.
Manufacturing and Purchasing
The Company manufactures many components and subsystems for use in its
products, including critical optical components and analog and digital
10
<PAGE>
circuitry. Other components, including packaging materials, integrated circuits,
microprocessors and minicomputers, are purchased from unaffiliated third
parties. Most of the raw materials and supplies purchased by the Company are
either available from a number of different suppliers or alternative sources
could be developed without a materially adverse effect on the Company's
business. However, the availability and quality of certain key instrument
components, such as printed circuit board designs and lamps, are controlled by a
limited number of vendors. 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.
Research and Development
Historically, the Company has been actively engaged in research and
development in order to produce new products. However, the competitive price
pressures experienced by the Company since early 1994 have sharply limited the
new product development to areas of software as opposed to hardware. Developed
over the past three years, DECS (Dasibi Environmental Central Software) is a
Windows-based, network control and reporting program for multi systems of
pollutant analyzers and ancillaries. Similar programs exist but management
believes none are under single manufacturer design and responsibility. Within
the same constraints, the Company is developing predictive pollutant modeling
programs.
Because of competive price pressure budget restraints, the Company has been
limiting Flue Gas Purification System development work.
Employees
As of April 6, 2000, the Company had 45 full-time employees, of whom 5 were
engaged in administration, 7 in engineering, 31 in manufacturing and 2 in sales
and marketing. None of the Company's employees are represented by a labor union.
The Company has never had a strike or lockout and considers its employee
relations to be good.
Competition - Instruments
The Company is the smallest competitor in the ambient air pollution
instrumentation market. 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. To a lesser extent, the Company competes 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 and software capabilities, 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, Environnement
S.A of France ("Environnement") and Horiba Instruments ("Horiba Instruments.")
11
<PAGE>
Intellectual Property
Although the Company obtained patents for its ozone monitor and various
techniques in instrument design, 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. The instrument patents
obtained by the Company, all of which have expired, are not deemed by management
to be significant to the Company's business operations or potential success. The
Company has no federal or state registered trademarks and no franchises or
concessions. The Company has common law rights to the trademark "Dasibi."
Albert E. Gosselin, Jr., the Company's co-founder, has, for the past
several years, devoted personal research time to developing an innovative, cost
conscious system for purifying exhaust gases. His efforts resulted in the filing
of a patent application for such system on behalf of the Company in April 1994,
subsequently granted in September 1996, and a second grant in March, 1999, both
assigned to the Company for $1.00.
Item 2. Description of Properties
In July 1994, the Company moved its administrative, instrument
manufacturing and employee facilities to 39,070 square feet, increased to 45,000
square feet in 1997, at 506 Paula Avenue, Glendale, California. The Company
leases the space from an unaffiliated third party for a term of ten years
commencing as of July 1, 1994, at a base rent of $24,223 per month plus
operating costs and taxes, with a provision for increases in the base rent
related to increases in the Consumer Price Index to the present rent of $31,000
per month. The Company utilizes most of its existing office and manufacturing
space and believes that such space is more than adequate for its needs for the
foreseeable future.
Item 3. Legal Proceedings
New Era Capital, Inc. vs PRCC, DEC
- ----------------------------------
Case No. E0028408
In November, 1999, Barry Soltani, a Director of the Company, filed a
lawsuit against the Company alleging that certain monies are owed to him by the
Company. The Company estimates Mr. Soltani's claim as approximately $100,000.
The Company has answered the complaint, asserted a number of defenses and
intends to defend itself vigorously in this matter. In December, 1999 the
Company filed a cross complaint against Mr. Soltani alleging, among other items,
that Mr. Soltani had breached his fiduciary duties as a Director.
12
<PAGE>
Soltani, Etemad, Pic Computers etal vs PRCC, DEC
- ------------------------------------------------
Case No. BC227020
In April, 2000, the above plaintiffs filed a lawsuit against the Company
alleging breach of contract and fraud surrounding the purchase and return of a
training facility or business property in Macau, China. The Company is unable to
evaluate the value of the claim at this time. The Company has not yet answered
the Complaint but believes it has a number of defenses in this matter and
intends to defend itself vigorously. See Item 12. "Certain Relationships and
Related Transactions."
Taylor, Taylor & Dreifus vs PRCC
- --------------------------------
No. 99-1100-CA01 Circuit Court Escambia, Florida
In June, 1999, a lawsuit was filed against the Company by Taylor, Taylor, &
Dreifus, a Florida general partnership alleging default by the Company under a
promissory note and failing to make lease payments, all relating to the Nutek
subsidiary bankruptcy of 1998. The amount of claim is estimated at $300,000. The
Company is vigorously defending the litigation and has filed a counterclaim
against the partnership alleging that the note and lease payments are not due
because of fraudulent representations made at the time of acquisition of the
Nutek business. No discovery has taken place at this time.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
13
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is traded over-the-counter in the NASDAQ System
as NASDAQ Small Cap securities 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 1999 and
1998. Quotations represent inter-dealer quotations, without adjustment for
retail mark-ups, mark-downs or commissions, and may not necessarily represent
actual transactions.
Fiscal 1999 Fiscal 1998
Quarter Ended High Bid Low Bid High Bid Low Bid
- ------------- -------- ------- -------- -------
Common Stock:
March 31 $2.00 $ .88 $4.52 $2.52
June 30 2.38 1.06 3.13 2.48
September 30 3.87 1.81 2.25 .26
December 31 2.91 1.56 1.25 .56
As of April 6, 2000, 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.
A one for four reverse split of the Company's Common Stock was approved by
shareholders during 1998 and all values pertaining to the Company's stock have
been adjusted in this report. As of April 6, 2000, there are 4,235,085 shares of
Common Stock outstanding, 1,093,206 warrants and 784,625 options.
Item 6. Management's Discussion and Analysis or Plan of Operation
1999
- ----
The Company has been in a transitional operation phase since early 1998.
Recent years have indicated that the Company's "base" core business is in the
range of $2.6 million in revenues. During 1998, the Company demonstrated a
self-sustaining break-even operation at this revenue with a total staff of 20
personnel. To handle the large China orders which are, at present,
unpredictable, a total staff of 45 minimum is indicated. Therefore, until a
"steady-state" flow of revenue from China is reached a monthly loss situation is
expected for portions of each year. "Ramping-up" is not feasible in the
employment market for technical personnel as has existed during the past
eighteen months in the United States. Management believes that acceptance of a
staggered profit-loss monthly operation is necessary to properly access the very
large China market. In 1999, management estimates seven of the twelve months
could be considered as accepted high fixed expense months in this transition
effort. In 2000, each month to date has also been an accepted high fixed expense
month with no China activity.
14
<PAGE>
Financing when needed, even in the form of State or Federal guaranteed
loans involves lending institutions' extremely high management fees.
Non-guaranteed loans demand extremely high interest rates. Finally, equity
placements require significant discounts and incentives.
The combination of accepted high fixed expense months described above and
the aforementioned high expenses associated with access to capital tend to lower
the possible operational performance of fiscal 1999 and any subsequent year that
may have minimum China market activity. Pro-formas for specific China
performance have been and will continue to be used as a guide for maintaining
acceptable gross profit margins.
Net revenues in 1999 were $7,314,975 compared to $2,807,511 in 1998, a 161%
increase. The increase was entirely due to China business. The revenues for the
"base" core business were essentially the same as the year before.
Gross margin was 30% of consolidated net revenues in 1999 compared to 35%
of the consolidated revenues of 1998. The gross margin during the five months of
full China operation has been estimated at approximately 44%, from pro-forma
analysis.
Selling, general and administrative expenses increased from a consolidated
$1,583,679 in 1998 to $2,952,652 in 1999 due to increased staffing, related
expense and commissions. A higher level of promotional charges during no China
operation contributed an increase of approximately $246,000 in 1999, over 1998.
The remaining increase is primarily due to an increase in commission and freight
which is directly related to the increase in revenues.
Research and development expense increased from $20,175 in 1998 to $70,830
in 1999 due to in-house technological advances in the Company's system work.
Interest expense increased from $27,961 in 1998 to $336,675 in 1999,
primarily due to the Company's inability to obtain bankable financing for higher
levels of working capital required.
Management fees from lending institutions (non-bankable penalties) were
approximately $400,000 and is not comparable to 1998. Amortization of loan fees
was $359,106. The combination of these factors amounted to approximately
$760,000.
Management believes that the Phase II contract in excess of $12 million
will be awarded to the Company in April, 2000 and it is believed the project can
be commenced within 60 days of the contract signing. Based on 1999 pro-forma
analysis,over six months of China operation in 2000 should result in a
profitable year-end. Further, the balance of the project extending into 2001 and
currently indicated non- related China Phase II awards along with a strong
indication of joint venture manufacture in China commencing in June, 2001 given
extremely high probability of year round gross profit margins in the range of
44% which historically has proven profitable to the Company.
15
<PAGE>
The Company, at December 31, 1999, has an approximate net operating loss
carry-forward of $6 million.
Based on the pro-forma 1999 results of the China operations and the above
forecast, management believes that a deferred tax credit applied to its
operating situation wherein as planned expenses for increased revenue and gross
profit margin have been accepted and therefore a deferred tax credit is
appropriate.
The approximate $6 million net operating loss carry forward resulted in a
$2,659,000 tax credit and was applied as a 1999 income tax benefit as an asset
and an increase to operating income.
Primarily as a result of the use of the loss carry forward, net income was
$1,125,637 in 1999 compared to a net loss of $1,588,746 in 1998.
Proforma estimates on the Company's subsidiary operation indicate an
estimated $800,000 profit from core activities on revenues of $7,314,975
exclusive of financing limitations, excluding fixed expense of the non-China
operation for 7 months of 1999, and including accrued expenses for year 2000
related China operations.
1998 and Prior
- --------------
The Company's operating profit for fiscal 1994, 1995, 1996, 1997, and 1998
decreased significantly as compared to fiscal 1993. These declines were
principally because of significant competitive price pressure for the Company's
air pollution monitoring instruments, thus forcing the Company to lower its
domestic and foreign bids, reducing the number of the Company's bids awarded and
reducing the profit margin on the bids awarded to the Company. In the middle of
1996 two companies were acquired in an attempt to diversify the Company's
technology and to increase profit margins. The Company's revenue overall
increased in 1996 and 1997 due to these acquisitions, however, the profit margin
did not increase and the additional overhead continued the downward trend for
the Company. Beginning in the third quarter of fiscal 1994, the Company
implemented certain cost reduction measures in its operating expenses, suspended
major new product development efforts and scaled back its efforts to improve or
modify existing technologies in response to the competitive price pressures.
Throughout 1995 and 1996 the Company shipped record numbers of instrumentation
units, but continued competitive pricing pressure resulted in lowered gross
margins. In July 1996 the above acquisitions were completed. The program to
diversify was deemed unsuccessful and a reorganization was begun in early 1998
consisting of the disposition of acquired subsidiary assets and a reduction of
personnel. Management determined that the focus of its core business should be
redirected to an attempt to achieve designated vendor status in the People's
Republic of China. In June 1998 the Company was awarded the largest contract in
its history, in excess of $5 million dollars, in a designated vendor's status.
Due to banking factors outside of the control of the contractual parties no
China contract revenues were obtained during 1998.
Liquidity and Capital Resources
The Company has historically financed operations through bank borrowings
and the issuance of common stock in both public and private offerings. Since the
Company has not been considered "bankable" the cost of money obtained from
financial institutions has been relatively expensive.
16
<PAGE>
Since January 1999, the Company has raised $1,210,654 in private placements
which has resulted in the issuance of 1,277,538 shares of Common Stock and
options and warrants for 867,538 shares.
Working capital at December 31, 1999 was $1,346,211. Management believes
that the anticipated cash flows from operations will be sufficient to meet the
Company's cash needs for the next twelve months. As of April 6, 2000, the
Company had no material commitments for capital expenditures.
During 1999 and to date the Company entered into several loans with varying
terms:
A. $300,000 in three one year loans maturing June 1, 2000 with interest
rate at 12% with unaffiliated individuals.
B. One $500,000 Convertible Bond with interest at 18% due March 2000 and
currently replaced with a $500,000 Convertible Loan with interest at a
12% interest rate due December, 2000. Convertible at $2.25 or 80% of
market price, whichever is lower - no conversion applied for to this
date.
C. One $300,000 Convertible Bond with interest at 12% due June 1, 2000
convertible at $2.25 or 80% of market, whichever is lower. 119,108
shares have been converted to date at levels of $1.20 to $2.25.
Balance of loan due is $75,000.
D. One $500,000 Convertible Bond with interest at 12% due March 2001.
Convertible at $2.00 or 80% of market price, whichever is lower - no
conversion applied for to this date.
Management believes that all of the above debt instruments can be satisfied
or restructured if necessary.
Cash increased from $63,952 at the end of 1998 to $214,206 at the end of
1999.
Seasonality
Management does not believe that the Company's business is seasonal.
Item 7. Financial Statements
The Company's Financial Statements and the related Notes thereto are set
forth at pages F-1 through F-21.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable.
17
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Directors, Executive Officers and Key Employees
Set forth below are the names, ages, positions and business experience of
the directors, executive officers and key employees of the Company and Dasibi
Environmental Corp.
Name Age Position(s) With Company And Dasibi
---- --- -----------------------------------
Albert E. Gosselin, Jr. 67 President, Chief Executive Officer and
Chairman of the Board of Directors,
President Dasibi
Donald R. Ford 72 Chief Financial Officer
Cynthia L. Gosselin 38 Operations Manager of Dasibi
Marcia A. Smith 61 Director of Pollution Research and Control
Corp.; Manager of Administration of Dasibi
Environmental Corp.
Gary L. Dudley 62 Director, Chairman & CEO of Dasibi
Environmental Corp.
Craig E. Gosselin 40 Director, Director of Dasibi Environmental
Corp.
Barry Soltani 43 Director
All directors hold office until the next annual meeting of the Company's
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the board of directors.
Family Relationships
Albert E. Gosselin, Jr., is the parent of Craig E, and Cynthia L.,
Gosselin, both of whom are adults. All of the foregoing are presently serving as
executive officers and/or directors of the Company. Except as set forth herein,
no family relationship exists between or among any director or executive officer
or the Company.
Business Experience
Albert E. Gosselin, Jr., has served as the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company (formerly "Dasibi
Environmental Corp." and "A.E. Gosselin Engineering, Inc.") and Dasibi (formerly
"Baral Engineering, Inc."), corporations which he co-founded with Barbara L.
Gosselin, since the organization of those corporations in December 1971 and July
18
<PAGE>
1976, respectively. Barbara L. Gosselin resigned as a Director on August 12,
1999 after being elected at the Annual Shareholders Meeting. He also served as
the President, Chief Executive Officer and Chairman of the Board of Directors of
the Company's former parent corporation, a corporation also named "Pollution
Research and Control Corp. ("PRCC") which he co-founded with Mrs. Gosselin under
the name of "A.E. Gosselin Engineering Co.," from its inception date in 1966
through the date of its spin-off in October 1986. Mr. Gosselin also served as
the President, Chief Executive Officer and Chairman of the Board of Directors of
Applied Conservation Technology, Inc. ("ACT"), a former wholly-owned subsidiary
of Pollution Research and Control Corp. engaged in the business of providing
environmental impact reports to electric utilities, together with the Company,
from 1980 through the date of the purchase of ACT by its management from PRCC in
November 1986. ACT is presently a diversified environmental consulting firm
owned and managed by Gary L. Dudley, a Company director, and other members of
management. Mr. Gosselin received a Bachelor of Science in mechanical
engineering from Loyola University, Los Angeles, California, in 1954. He has
been a registered mechanical engineer in the State of California since 1959.
Donald R. Ford has served as a Director of the Company in the 1970's and
has served as a director and corporate officer of several private companies
since 1975. After leaving Price Waterhouse (now Price Waterhouse Coopers) in
1957 he practiced as a Certified Public Accountant primarily as a financial and
business consultant to domestic and international companies. He received a B.S.
in Marketing from the University of California, Berkeley in 1952.
Cynthia L. Gosselin served as the Chief Financial Officer of the Company
and Dasibi from May 1990 to January 1998, when she resigned those positions and
became Operations Manager of Dasibi and the Company. Additionally, she has acted
as Dasibi's Purchasing Agent since May 1990. She was employed by Dasibi in
various capacities, including Production Manager, from 1983 through April 1990.
Ms. Gosselin received a B.S. in business from the University of California at
Long Beach in 1982.
Marcia A. Smith has served as a director of the Company and Dasibi since
May 1990. She has been employed as the Manager of Administration and in various
other capacitities with Dasibi since 1979.
Gary L. Dudley has served as a director of the Company during the periods
since June 1991 and from 1980 through January 1991, and he served as the
Company's Vice President from 1979 through November 1986. Mr. Dudley also served
as an executive officer and a director of PRCC, the Company's former parent
corporation, from 1984 through the date of the spin-off of PRCC in October 1986.
Mr. Dudley has been the President and a principal shareholder of ACT, now
located in Westminster, California, a diversified environmental consulting firm
formerly wholly-owned, together with the Company, by PRCC, since the purchase of
ACT by its management from PRCC in November 1986. He served as ACT's Vice
President from 1980 through 1986. From 1962 through 1978, Mr. Dudley was
employed in various engineering- related positions by Southern California Edison
Company, TRW Systems, McDonnell Douglas Corporation and North American Rockwell
Corporation. He received a Bachelor of Science in engineering from California
State University in 1962 and a Masters Degree in Mechanical Engineering from the
University of Southern California in 1966. Mr. Dudley is a registered mechanical
engineer in the State of California and a member of the Association of
Environmental Professionals.
19
<PAGE>
Craig E. Gosselin has served as a director of the Company and Dasibi since
October 1987. Mr. Gosselin is an attorney who has been licensed to practice law
in the State of California since 1984. He has served as the Vice President and
General Counsel of Vans, Inc., a publicly-held designer, distributor and
retailer of footwear, snowboard boots, apparel and related accessories located
in Santa Fe Springs, California, since July 1992. He received a Bachelor of
Business Administration from Loyola Marymount University in 1981 and a Juris
Doctor from Southwestern University School of Law in 1984.
Barry Soltani received a PhD in economics from the University of
California, Riverside in 1989, his Master's from the University of California,
Riverside in 1983, and graduated from San Diego State University in 1981 with a
B.B.A. in economics. Dr. Soltani has been directly involved in funding for
industrial development projects in China and since 1993 has been an independent
consultant in corporate finance for joint ventures in China. Dr. Soltani has
served as a director of the Company since April 22, 1997. Since 1989 and to the
present, he has served as the President and a director of PIC Computers, Ltd.,
Macau, which is engaged in the marketing, resale and wholesale distribution of
computers and computer-related equipment.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership, and
reports of changes in ownership, of Common Stock and other equity securities of
the Company. Executive officers, directors and greater than ten percent
shareholders are required by Commission regulations to furnish the Company with
copies of all Section 16(a) reports they file. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company, and
representations that no other reports were required during the fiscal year ended
December 31, 1999, the Company's executive officers, directors and greater than
ten per cent beneficial owners of its Common Stock, complied with all Section
16(a) filing requirements applicable to them.
Item 10. Executive Compensation
Executive Compensation
The following table sets forth the total cash and non-cash compensation
paid by the Company for the fiscal years ended December 31, 1997, 1998, and 1999
to the Company's President and Chief Executive Officer who was the only
executive officer of the Company whose aggregate cash compensation exceeded
$100,000 for the 1999 fiscal year.
20
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Long Term
Other Compensation Awards
Name Accrued Accrued Annual Securities Underlying
& Principal Position Year Salary Salary Bonus Compensation Options/SARs(#)
- -------------------- ---- ------- ------ ----- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Albert E. Gosselin,Jr. 1999 $210,000 $97,866 -0- -0- -0-
President, Chief 1998 $202,223 -0- -0- -0- -0-
Executive Officer & 1997 $151,000 -0- -0- -0- -0-
Chairman of the Board
</TABLE>
The Company does not provide officers or employees with pension, stock
appreciation rights, long-term incentive or other plans.
Compensation of Directors
Directors do not receive compensation pursuant to any standard arrangement
for their services as directors.
Employment Agreements
The Company has employment agreements with Albert E. Gosselin, Jr., the
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company, Cynthia L. Gosselin, and Marcia Smith. Mr. Gosselin's employment
agreement (the "Agreement") was first approved by the Board of Directors on July
30, 1987, and has since been extended through August 31, 2003. The Agreement, as
extended, provides for the payment to Mr. Gosselin of a base salary of $200,000,
$210,000, 220,000, 230,000, 240,000 and $250,000 during the one-year periods
ending August 31, 1998, 1999, 2000, 2001, 2002, and 2003 respectively. (See
"Executive Compensation" under this Item 10. "Executive Compensation"
hereinabove.) The Agreement further obligates the Company to permit Mr. Gosselin
to participate in the Company's Employee's Incentive Stock Option Plan and Group
Medical Plan and any other health, life insurance, group medical, disability
income insurance and/or stock option plan adopted by the Company. Under the
Agreement, Mr. Gosselin's salary continues in the event of his disability and
for two years after his death. He is also entitled to a lump sum severance
payment equivalent to 2.99 times his current salary in the event of his
termination as President or Chief Executive Officer within eighteen months after
a "change of control" of the Company, including, among other events, certain
types of mergers and other business combinations, material changes in the
composition of the Board of Directors or the beneficial ownership of the Common
Stock, the sale of substantially all of the Company's assets or securities and
the material downsizing or dissolution of the Company. If such an event occurs
during fiscal 2000, Mr. Gosselin would be entitled to receive $657,800 as a
severance payment.
21
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of April 6, 2000, regarding
the ownership of the Company's Common Stock by each shareholder known by the
Company to be the beneficial owner of more than five percent of its outstanding
shares of Common Stock, each of the named executive officers, each director, and
all executive officers and directors as a group. Except as otherwise indicated,
each of the shareholders has sole voting and investment power with respect to
the shares of Common Stock beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner (1) Amount Beneficially Owned Percent of Class (2)
- ---------------------------------------- ------------------------- --------------------
<S> <C> <C>
Ronald Patterson 681,049 (3) 16.0%
Britannica Assoc. 300,000 (4) 7.0%
Albert E. and Barbara L. Gosselin, Jr. 284,057 (5) 6.7%
Lee N. Sion 286,000 (6) 6.7%
Phillip Huss 320,948 (7) 7.5%
Gary L. Dudley 47,500 (8) 1.1%
Marcia A. Smith 30,320 (9) *
Craig E. Gosselin 16,250 (10) *
Barry Soltani -0- *
All Executive Officers and Directors as
a Group (five persons) 8.9
</TABLE>
* Less than one percent
(1) The address of Mr. Lee Sion is P.O. Box 910, Glendale, California 91209.
The address of Mr. Ronald Patterson is 17 Prestile Place, Robbinsville, NJ
08691.
The address of Brittanica Assoc. is 3rd Floor, Omar Lodge Building,
Road Town, Tortola BVI.
The address of Phillip Huss is 22 Cedar Court, Durango, Co 81301.
The addresses of the rest of the individuals named above is 506 Paula
Avenue, Glendale, California 91201.
(2) Assumes the exercise of outstanding options and warrants specific to the
referenced party, the denominator of which is made up of the outstanding
shares of Common Stock plus those specific warrants and options.
22
<PAGE>
(3) Includes 187,858 shares of Common Stock issuable upon the exercise of an
option owned of record by Ronald Patterson and exercisable within 60 days.
(4) Represents 300,000 shares of Common Stock issuable upon the exercise of
options owned of record by Brittanica Assoc. and exercisable within 60
days.
(5) Includes 73,250 shares of Common Stock issuable upon the exercise of
options owned of record by Albert E. Gosselin, Jr. exercisable within 60
days. Does not include a total of 44,263 shares of Common Stock owned of
record collectively by Craig. E., Cynthia L., and Jennifer Gosselin, the
adult children of Albert E. and Barbara Gosselin, Jr., as to which Mr. and
Mrs. Gosselin disclaim any beneficial interest. Mrs. Gosselin holds shares
of Common Stock in a revocable trust of Barbara L. Gosselin to which Mr.
Gosselin disclaims any beneficial interest.
(6) Includes 46,875 shares of Common Stock issuable upon the exercise of
options owned of record by Lee N. Sion which are exercisable within 60
days.
(7) Includes 137,141 shares of Common Stock issuable upon the exercise of
options owned of record by Phillip Huss and exercisable within 60 days.
(8) Includes 27,500 shares of Common Stock issuable upon the exercise of
options owned of record by Gary L. Dudley which are exercisable within 60
days.
(9) Includes 28,750 shares of Common Stock issuable upon the exercise of an
option owned of record by Marcia Smith, and exercisable within 60 days.
(10) Craig E. Gosselin is the adult son of Albert E. and Barbara L. Gosselin,
Jr., who disclaim any beneficial ownership of his shares and includes
15,000 shares of Common Stock issuable upon the exercise of options owned
of record and exercisable within 60 days.
Item 12. Certain Relationships and Related Transactions
On May 8, 1998, the Company issued an aggregate of 100,000 and 20,000
shares of Series A Preferred Stock to each of Messrs. Albert E.Gosselin and Gary
L. Dudley, executive officers and/or directors of the Company, respectively, in
consideration for the amounts of $50,000 and $10,000 in cash, respectively. Each
share of Series A Convertible Preferred Stock was converted into and exchanged
for one share of Common Stock on March 17, 1999.
In May 1998, the Company entered into an agreement to purchase a training
facility in China from PIC Computers ("PIC"), a Macao Corporation, one of the
23
<PAGE>
owners of which is Mr. B. Soltani, a Director of the Company, for a total
consideration of 450,000 shares of the Company's Common Stock. In early 1999,
Chinese environmental officials ruled that any facility in Macao could not be
used due to internal visa problems. At that time final purchase procedures for
the facility had not been completed. The facility was released back to PIC. The
referenced stock was never released to PIC and was retired to the treasury. The
owners of PIC dispute this result and have sues the Company. See Item 3 "Legal
Proceedings."
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the Exhibit Index located at Pages E-1 through E-24
are filed pursuant to Item 13(a) of this Report.
(b) Reports on Form 8-K
None.
24
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities and Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: April 6, 2000 POLLUTION RESEARCH AND CONTROL CORP.
(Registrant)
By: /s/ Albert E. Gosselin, Jr.
---------------------------
Albert E. Gosselin, Jr., President,
Chief Executive Officer and Chairman
of the Board of Directors
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and on the dates indicated.
Date: April 6, 2000 /s/ Albert E. Gosselin, Jr.
--------------------------------------
Albert E. Gosselin, Jr., President,
Chief Executive Officer and Chairman
of the Board of Directors
(Principal Executive Officer)
Date: April 6, 2000 /s/ Donald R. Ford
--------------------------------------
Donald R. Ford, Chief Financial
Officer, (Principal Financial and
Accounting Officer)
Date: April 6, 2000 /s/ Gary L. Dudley
--------------------------------------
Gary L. Dudley, Director
Date: April 6, 2000 /s/ Marcia A. Smith
--------------------------------------
Marcia A. Smith, Director
Date: April 6, 2000 /s/ Craig E. Gosselin
--------------------------------------
Craig E. Gosselin, Director
Date: April 6, 2000
Barry Soltani, Director
25
<PAGE>
INDEX
-----
Page
----
Independent Auditors' Report F-2
Consolidated Balance Sheet F-3
Consolidated Statements of Operations and Comprehensive Income (Loss) F-5
Consolidated Statements of Stockholders' Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Pollution Research and Control Corp.
Glendale, California
We have audited the accompanying consolidated balance sheet of Pollution
Research and Control Corp. and Subsidiaries as of December 31, 1999, and the
related consolidated statements of operations and comprehensive income (loss),
stockholders' equity and cash flows for the years ended December 31, 1999 and
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Pollution Research
and Control Corp. and Subsidiaries as of December 31, 1999, and the consolidated
results of their operations and their cash flows for the years ended December
31, 1999 and 1998 in conformity with generally accepted accounting principles.
AJ. ROBBINS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS
Denver, Colorado
February 22, 2000
F-2
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
------
CURRENT ASSETS:
Cash $ 214,206
Accounts receivable, trade, less allowance
for doubtful accounts of $33,350 1,101,690
Accounts receivable, related party 278,948
Inventories 1,387,711
Other current assets 123,861
----------
Total Current Assets 3,106,416
----------
PROPERTY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net 103,152
OTHER ASSETS 23,509
DEFERRED TAX ASSET, net 2,659,000
----------
$5,892,077
==========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-3
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Continued)
DECEMBER 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable, trade $ 217,746
Accrued liabilities 252,093
Accrued settlement 308,949
Notes payable 300,000
Convertible debt 650,000
Accrued interest expense 31,417
-----------
Total Current Liabilities 1,760,205
DEFERRED RENT 43,602
-----------
Total Liabilities 1,803,807
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, 20,000,000 shares authorized:
Series A, $.01 par value, -0- shares issued and
outstanding --
Series B, $.01 par value, -0- shares issued and
outstanding --
Common stock, no par value, 30,000,000 shares
authorized, 3,672,545 issued and outstanding 7,840,920
Additional paid-in capital 708,167
Accumulated (deficit) (4,460,817)
-----------
Total Stockholders' Equity 4,088,270
-----------
$ 5,892,077
===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-4
<PAGE>
<TABLE>
<CAPTION>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
----------- -----------
<S> <C> <C>
NET REVENUES $ 7,314,975 $ 2,807,511
COST OF GOODS SOLD 5,142,575 1,816,350
----------- -----------
GROSS PROFIT 2,172,400 991,161
----------- -----------
OPERATING EXPENSES:
Selling, general and administrative 2,952,652 1,583,679
Research and development 70,830 20,175
----------- -----------
Total Operating Expenses 3,023,482 1,603,854
----------- -----------
(LOSS) FROM OPERATIONS (851,082) (612,693)
----------- -----------
OTHER INCOME (EXPENSE):
Gain on sale of marketable securities -- 6,428
Other income 13,500 101,000
Interest income -- 6,029
Interest expense (336,675) (27,961)
Amortization of loan fees (359,106) --
----------- -----------
Net Other Income (Expense) (682,281) 85,496
----------- -----------
(LOSS) FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES (BENEFIT) (1,533,363) (527,197)
----------- -----------
PROVISION (BENEFIT) FOR INCOME TAXES:
Current -- --
Deferred (2,659,000) --
----------- -----------
Total Provision (Benefit) for Income Taxes (2,659,000) --
----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 1,125,637 (527,197)
----------- -----------
(LOSS) FROM DISCONTINUED OPERATIONS:
(Loss) from operations, less applicable income tax benefit of
$-0- and $390,000 -- (115,301)
(Loss) on disposal/abandonment, less applicable income tax -- (918,411)
benefit of $-0- ----------- -----------
Total (Loss) From Discontinued Operations -- (1,033,712)
----------- -----------
NET INCOME (LOSS) 1,125,637 (1,560,909)
----------- -----------
OTHER COMPREHENSIVE LOSS:
Foreign currency translation adjustment -- (24,587)
Change in unrealized gain on marketable securities -- (3,250)
----------- -----------
Total Other Comprehensive Loss -- (27,837)
----------- -----------
COMPREHENSIVE INCOME (LOSS) $ 1,125,637 $(1,588,746)
=========== ===========
NET INCOME (LOSS) PER SHARE - Basic:
Continuing operations $ .33 $ (.23)
Discontinued operations:
Loss from operations -- (.05)
Loss on disposal -- (.40)
----------- -----------
Net income (loss) per share - Basic $ .33 $ (.68)
=========== ===========
Weighted Average Shares, Basic 3,438,418 2,283,093
=========== ===========
NET INCOME (LOSS) PER SHARE - Diluted:
Continuing operations $ .29
-----------
Net income (loss) per share - Diluted $ .29
===========
Weighted Average Shares, Diluted 4,168,924
===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE>
POLLUTION RESEARCH AND CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
Series A Series B
Common Stock Preferred Stock Preferred Stock
--------------------- ----------------------- ----------------------
Shares Amount Shares Amount Shares Amount
----------- --------- --------- --------- --------- ---------
Balances,
December 31, 1997 2,168,433 $ 6,588,980 -- $ -- -- $ --
Sale of common stock, net
of offering costs of
$ 49,997 231,256 202,072 -- -- -- --
Sale of preferred stock -- -- 220,000 2,200 -- --
Issuance of preferred
stock for the Technical
Service Center -- -- -- -- 450,000 4,500
Forgiveness of notes (31,250) (86,857) -- -- -- --
Stock-based compensation
expense recognized -- -- -- -- -- --
Change in unrealized gain
on marketable securities -- -- -- -- -- --
Change in unrealized
foreign currency
translation loss -- -- -- -- -- --
Net (loss) for the year -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------
Balances,
December 31, 1998 2,368,439 6,704,195 220,000 2,200 450,000 4,500
Sale of common stock, net
of offering costs of
$74,875 848,331 731,375 -- -- -- --
Conversion of preferred
stock 670,000 6,700 (220,000) (2,200) (450,000) (4,500)
Recission of purchase of
Technical Service Center (450,000) (4,500) -- -- -- --
Issuance of common stock
in partial settlement
of debt 100,000 175,000 -- -- -- --
Conversion of convertible
debt into common stock 85,775 150,000 -- -- -- --
Common stock issued for
services 50,000 78,150 -- -- -- --
Stock based compensation
for loan fees -- -- -- -- -- --
Net income for the year -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Balances,
December 31, 1999 3,672,545 $ 7,840,920 -- $ -- -- $ --
=========== =========== =========== =========== =========== ===========
F-6
(Continued on following page)
<PAGE>
POLLUTION RESEARCH AND CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
Unrealized
Unrealized Foreign
Notes Due Additional Gain on Currency Total
From Sale Paid-in Accumulated Marketable Translation Stockholders'
Of Stock Captial Deficit Securities Gain Equity
-------- ------- ------- ---------- ---- ------
Balances,
December 31, 1997 $ (86,857) $ 145,764 $(4,025,545) $ 3,250 $ 24,587 $ 2,650,179
Sale of common stock, net
of offering costs of
$49,997 -- -- -- -- -- 202,072
Sale of preferred stock -- 107,800 -- -- -- 110,000
Issuance of preferred
stock for the Technical
Service Center -- 595,500 -- -- -- 600,000
Forgiveness of notes 86,857 -- -- -- -- --
Stock-based compensation
expense recognized -- 79,767 -- -- -- 79,767
Change in unrealized gain
on marketable securities -- -- -- (3,250) -- (3,250)
Change in unrealized
foreign currency
translation loss -- -- -- -- (24,587) (24,587)
Net (loss) for the year -- -- (1,560,909) -- -- (1,560,909)
----------- ----------- ----------- ----------- ----------- -----------
Balances,
December 31, 1998 -- 928,831 (5,586,454) -- -- 2,053,272
Sale of common stock, net
of offering costs of
$74,875 -- -- -- -- -- 731,375
Conversion of preferred
stock -- -- -- -- -- --
Recission of purchase of
Technical Service Center -- (595,500) -- -- -- (600,000)
Issuance of common stock
in partial settlement
of debt -- -- -- -- -- 175,000
Conversion of convertible
debt into common stock -- -- -- -- -- 150,000
Common stock issued for
services -- -- -- -- -- 78,150
Stock based compensation
for loan fees -- 374,836 -- -- -- 374,836
Net income for the year -- -- 1,125,637 -- -- 1,125,637
----------- ----------- ----------- ----------- ----------- -----------
Balances,
December 31, 1999 $ -- $ 708,167 $(4,460,817) $ -- $ -- $ 4,088,270
=========== =========== =========== =========== =========== ===========
SEE ACCOMPANYING NTOES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6(A)
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Reconciliation of net income (loss) to
net cash flows (used in) operating activities:
Net income (loss) $ 1,125,637 $(1,560,909)
Loss on disposition/abandonment of operations -- 918,411
Depreciation and amortization 23,150 90,034
Deferred rent (14,532) (11,534)
Deferred income taxes (2,659,000) --
Stock issued for services 78,150 --
Stock-based compensation expense -- 54,977
Stock issued for loan fees 309,106 --
Changes in operating assets and liabilities:
Accounts receivable, trade, net (883,821) 8,384
Accounts receivable, related party (51,010) (20,389)
Inventories 239,444 123,717
Due from factor 55,164 (55,164)
Prepaid expenses (40,000) --
Other current assets (9,051) 4,769
Secured overdraft facility -- 22,794
Accounts payable, trade (38,947) 96,708
Accounts payable, officer -- (12,497)
Accrued liabilities 199,397 (3,242)
Customer advances -- (143,695)
Other assets -- (14)
----------- -----------
Net Cash Flows (Used in) Operating Activities (1,666,313) (487,650)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, equipment and leasehold
improvements (14,807) (1,919)
Other -- 515
----------- -----------
Net Cash Flows (Used in) Investing Activities (14,807) (1,404)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 806,250 252,069
Payment of offering costs (74,875) (25,207)
Advances on notes payable 1,583,251 --
Payments on notes payable (1,283,251) (267,674)
Advances on convertible debt 800,000 --
Payments of long term debt -- (15,565)
Payments of long term debt - related parties -- (14,517)
Proceeds from issuance of preferred stock -- 110,000
----------- -----------
Net Cash Flows (Used In) Provided
by Financing Activities 1,831,375 39,106
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH -- (1,323)
----------- -----------
INCREASE (DECREASE) IN CASH 150,255 (451,271)
CASH, beginning of year 63,951 515,222
----------- -----------
CASH, end of year $ 214,206 $ 63,951
=========== ===========
Supplemental Cash Flow Information:
See Note 15
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7
</TABLE>
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - BUSINESS ACTIVITY
Pollution Research and Control Corp., a California corporation, primarily
designs, manufactures and markets air pollution monitoring instruments, through
its wholly-owned subsidiary Dasibi Environmental Corporation ("Dasibi").
Pollution Research and Control Corp. had designed and manufactured electrical
control panels and medical instrumentation through its wholly-owned subsidiaries
Nutek, Inc. ("Nutek"), and Logan Medical Devices, Inc. ("LMD") and LMD's wholly
owned subsidiary, Logan Research Limited ("LRL"), respectively. The operations
of Nutek and LRL were discontinued in 1998 (Note 6).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
- -------------
The consolidated financial statements include the accounts of Pollution Research
and Control Corp. and its wholly-owned subsidiaries (the "Company"). All
significant intercompany balances and transactions have been eliminated in
consolidation.
Revenue Recognition
- -------------------
Revenue is recognized upon shipment of products.
Inventories
- -----------
Inventories are stated at the lower of cost (first-in first-out) basis or
market.
Property, Equipment and Leasehold Improvements and Depreciation
- ---------------------------------------------------------------
Property, equipment and leasehold improvements are stated at cost less
accumulated depreciation and amortization. Depreciation is provided for on the
straight-line method over the estimated useful lives of the assets, generally
five to ten years. Amortization of leasehold improvements is over the shorter of
the life of the lease or five years. Total depreciation expense was $23,150 and
$28,591 for the years ended December 31, 1999 and 1998, respectively.
Stock-Based Compensation
- ------------------------
The Company accounts for stock based compensation in accordance with Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). This standard requires the Company to adopt the
"fair value" method with respect to stock-based compensation of consultants and
other non-employees. The Company did not change its method of accounting with
respect to employee stock options; the Company continues to account for these
under the "intrinsic value" method, and to furnish the proforma disclosures
required by SFAS 123. See Notes 10 and 11 for additional information with
respect to stock-based compensation.
F-8
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings per Share
- ------------------
In 1997, the Financial Accounting Standards Board (FASB) issued Statement No.
128, "Earnings Per Share". Statement 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts for all periods have been
presented, to conform to Statement 128 requirements.
Cash Equivalents
- ----------------
For purposes of reporting cash flows, the Company considers all funds with
original maturities of three months or less to be cash equivalents.
Fair Value of Financial Instruments
- -----------------------------------
The carrying amounts of cash, accounts receivable, accounts payable and accrued
expenses approximate fair value because of the short maturity of these items.
Impairment Of Long-Lived Assets
- -------------------------------
The Company evaluates its long-lived assets by measuring the carrying amounts of
assets against the estimated undiscounted future cash flows associated with
them. At the time such evaluations indicate the future undiscounted cash flows
of certain long-lived assets are not sufficient to cover the carrying value of
such assets, the assets are adjusted to their fair values.
Research and Development Costs
- ------------------------------
Research and development costs are charged to operations as incurred. Research
and development expense was $70,830 and $20,175 for the years ended December 31,
1999 and 1998, respectively.
Income Taxes
- ------------
Deferred income taxes are recorded to reflect the tax consequences in future
years of temporary differences between the tax basis of the assets and
liabilities and their financial statement amounts at the end of each reporting
period. Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. Income tax expense is the tax
payable for the current period and the change during the period in deferred tax
assets and liabilities. The deferred tax assets and liabilities have been netted
to reflect the tax impact of temporary differences. At December 31, 1999 no
valuation allowance has been established for the deferred tax asset as
management believes that it is more likely than not that a tax benefit will be
realized.
F-9
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates in the Preparation of Financial Statements
- -----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Reclassification
- ----------------
Certain amounts reported in the Company's financial statements for the year
ended December 31, 1998 have been reclassified to conform to the current year
presentation.
Year 2000 Issues
- ----------------
Many computer systems and other equipment with embedded chips or microprocessors
may not be able to appropriately interpret dates after December 31, 1999 because
such systems use only two digits to indicate a year in the date field rather
than four digits. If not corrected, many computers and computer applications
could fail or create miscalulations, causing disruptions to the Company's
operations. In addition, the failure of customer and supplier computer systems
could result in interruption of sales and deliveries of key supplies or
utilities. Because of the complexity of the issues and the number of parties
involved, the Company cannot reasonably predict with certainty the nature or
likelihood of such impacts.
While the Company believes that its own internal assessment and planning efforts
with respect to external service providers, suppliers, customers and financial
institutions are and will be adequate to address its Year 2000 concerns, there
can be no assurance that these efforts will be successful or will not have a
material adverse effect on the Company's operations. Costs in connection with
compliance were not significant.
To date, the Company has not experienced any interruptions with respect to the
Year 2000 issue, but cannot reasonably predict with certainty that they will not
experience any interruptions.
NOTE 3 - INVENTORIES
Inventories at December 31, 1999 consisted of the following:
Raw materials $ 809,176
Work in process 173,639
Finished goods 404,896
-------------
Total $ 1,387,711
=============
Inventories at December 31, 1999 include capitalized labor and overhead of
$312,724.
F-10
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 4 - PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements at December 31, 1999 consisted of
the following:
Machinery and equipment $ 84,787
Furniture and fixtures 31,298
Leasehold improvements 194,196
-------------
310,281
Less accumulated depreciation and amortization 207,129
-------------
$ 103,152
=============
NOTE 5 - DEFERRED RENT
Upon execution of a 10 year lease for its present facility in Glendale,
California commencing July 1, 1994, the Company was granted 6 months "free"
rent. As required by generally accepted accounting principles, rent expense is
being recognized by amortizing the total minimum rentals payable under the lease
over the terms of the lease on a straight-line basis. The deferred rent shown on
the balance sheet as of December 31, 1999 represents the excess of the total
amount charged to rent expense over the amounts actually due and payable under
the lease as of such date, of which $23,012 has been classified as current and
$43,602 as long term, respectively.
NOTE 6 - DISCONTINUED OPERATIONS
Nutek -
In April 1998, Nutek filed for protection under the Federal Bankruptcy Code. In
June 1998, the Bankruptcy Court permitted the sale of Nutek's mortgaged
property, to satisfy the working capital facility and term loan obligations to
the major secured lender. The results of operations for Nutek for the respective
periods are reported as a component of discontinued operations in the
consolidated statements of operations. Additionally, the loss incurred on the
disposition/abandonment of assets and liabilities is also presented separately
as a component of discontinued operations.
Logan Research, Ltd. -
In February 1998, the Company disposed of LRL, through a return of 100% of LRL's
stock to its original owner in exchange for release from a $300,000 note payable
and $47,250 of related accrued interest. Unsecured advances from an officer of
LRL were not repaid. The results of operations of LRL for the respective periods
are reported as a component of discontinued operations in the consolidated
statements of operations. Additionally, the gain (loss) incurred on the disposal
of LRL is also presented separately as a component of discontinued operations.
F-11
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 6 - DISCONTINUED OPERATIONS (Continued)
Summarized results of operations for Nutek for the year ended December 31, 1998
was as follows:
1998
-----------
Net sales $ 731,636
============
Operating loss $ 61,778
============
Loss (income) on discontinued operations $ 82,133
============
Summarized results of operations for LRL for the year ended December 31, 1998
was as follows:
1998
------------
Net sales $ 49,313
============
Operating loss $ 25,741
============
Loss (income) on discontinued operations $ 33,168
============
NOTE 7 - ACCRUED SETTLEMENT
Under a settlement reached in 1998 and finalized in June 1999, the Company
entered into a compromise settlement agreement with the previous major secured
lender of Nutek to repay $468,000 through the issuance of 100,000 shares of the
Company's common stock (valued at $1.75 per share on the date of issuance) and
payment on February 1, 2000 of the remaining balance due, including interest
accruing from the settlement date at 12% per annum. The shares were placed in
escrow to be sold to reduce the balance owed under the settlement agreement. In
addition, the Company issued warrants to purchase 20,000 shares of the Company's
common stock at $.75 per share as an inducement to enter into the settlement
agreement.
The Company did not make its required payment in February 2000 and in March 2000
entered into amendment to the compromise settlement agreement and agreed to
place $200,000 in escrow for the remaining balance owed.
F-12
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 8 - NOTES PAYABLE AND CONVERTIBLE DEBT
Notes payable consisted of the following at December 31, 1999:
Note payable to an individual; interest at
11% per annum; principal and interest due
May 2000; unsecured $ 100,000
Notes payable to individuals; interest at
12% per annum; principal and interest due May and
June 2000; unsecured 200,000
----------
$ 300,000
==========
Convertible debt consisted of the following at December 31, 1999:
Convertible debenture; interest at 18% per annum
due monthly; principal due February 2000;
convertible at the lesser of 80% of the market
price of the common stock on the date
of conversion or 115% of the market price
of the common stock on May 28, 1999 $ 500,000
Convertible debenture; interest at 12%
per annum due monthly; principal due June 2000;
convertible at the lesser of 80% of the market
price of the common stock on the date
of conversion or $2.25 150,000
----------
$ 650,000
===========
NOTE 9 - INCOME TAXES
The components of deferred tax assets and (liabilities) is as follows:
1999
-----------
Total deferred tax assets $ 2,661,000
Total deferred tax (liabilities) (2,000)
-----------
Net deferred tax asset $ 2,659,000
===========
The provision (benefit) for income taxes consists of the following:
1999
-----------
Current $ --
Deferred (2,659,000)
-----------
$(2,659,000)
===========
F-13
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 9 - INCOME TAXES (Continued)
The income tax provision (benefit) for the years ended December 31, 1999 and
1998 differs from the computed expected provision (benefit) at the federal
statutory rate for the following reasons:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Computed expected income tax provision (benefit) $ (537,000) $ (165,000)
Non-deductible meals and entertainment 15,000 3,000
Temporary differences for items deductible from (includible in)
taxable income in future years:
Depreciation 1,000 1,000
Inventory valuation allowance (14,000) (5,000)
Bad debt allowance 10,000 --
State income taxes, net of federal income tax effect (59,000) (23,000)
Net operating loss carryforward unutilized (utilized) 474,000 189,000
Stock-based expenses 110,000 --
Decrease in valuation allowance (2,659,000) --
----------- -----------
Income tax provision (benefit) $(2,659,000) $ --
=========== ===========
</TABLE>
The components of the deferred tax assets and (liabilities) as of December 31,
1999 were as follows:
Deferred tax assets:
Temporary differences:
Allowance for doubtful accounts $ 13,000
Inventory valuation allowance 15,000
Accrued expenses 15,000
Loss on joint venture investment 66,000
Tax depreciation in excess of book depreciation (2,000)
Net operating loss carryforward 2,552,000
-----------
Net long-term deferred tax asset $ 2,659,000
===========
F-14
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 9 - INCOME TAXES (Continued)
The components of the deferred tax (expense) benefit were as follows for the
years ended December 31, 1999 and 1998:
1999 1998
----------- ------------
Allowance for doubtful accounts $ 11,000 $ 1,000
Inventory valuation allowance (16,000) 5,000
Accrued expenses 1,000 (1,000)
Depreciation (1,000) 13,000
(Unutilization) utilization of net operating loss
carryforward 474,000 (313,000)
Change in valuation allowance 2,190,000 295,000
----------- -----------
$ 2,659,000 $ --
=========== ===========
As of December 31, 1999 the Company has net operating loss carryforwards
available to offset future taxable income of approximately $6,600,000 expiring
in 2008 through 2019.
NOTE 10 - STOCKHOLDERS' EQUITY
Issuance of Common Stock
- ------------------------
On June 30, 1998, the Company sold 231,256 shares of common stock in a private
placement, receiving net proceeds of $202,072 after paying offering costs of
$49,997.
In February 1999, the Company sold 288,331 shares of common stock in a private
placement, receiving net proceeds of $199,375, after paying issuance costs of
$16,875.
In May 1999, the Company sold 300,000 shares of common stock in a private
placement, receiving net proceeds of $229,500, after paying issuance costs of
$25,000.
In September 1999, the Company sold 260,000 shares of common stock in a private
placement, receiving net proceeds of $302,750, after paying issuance costs of
$33,000.
Issuance of Preferred Stock
- ---------------------------
The Company is authorized to issue up to 5,000,000 shares of preferred stock,
$.01 par value per share in series to be designated by the Board of Directors.
On May 8, 1998, the Company issued 220,000 shares of Series A Preferred Stock
for a purchase price of $.50 per share, resulting in proceeds to the Company of
$110,000. These shares were converted into 220,000 shares of common stock in
March 1999. The Series A Preferred Stock have voting rights but no dividend
rights.
F-15
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 10 - STOCKHOLDERS' EQUITY (Continued)
Technical Service Center
- ------------------------
During June 1998, the Company purchased a technical service facility in Macau,
including 2 property units comprised of a modern office facility and a technical
laboratory in exchange for 450,000 shares of its Class B Preferred Stock valued
at $600,000. The facility was to be used to perform the training and technical
servicing of the China Contract.
During 1999, the Class B Preferred Stock was converted to common stock. The
Company was advised by the China State Environmental Protection Agency (SEPA)
that training must be done on the mainland of China. In October 1999, the
Company rescinded the purchase of the Technical Service Center and retired the
450,000 shares of common stock, which had been placed in escrow pending the
completion of the purchase. The Company does not believe it will have any
settlement costs related to the rescission of the acquisition of the Technical
Service Center.
Consulting Agreement
- --------------------
In July 1999, the Company issued 50,000 shares of common stock under a
consulting agreement.
Warrants
- --------
In connection with the sale of common stock and debt financing, the Company
granted warrants to purchase 363,331 shares of common stock at $.75 per share,
130,000 shares of common stock at $1.50 per share, 63,000 shares of common stock
at $2.25 per share and 75,000 shares of common stock at $2.40 per share.
F-16
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 10 - STOCKHOLDERS' EQUITY (Continued)
The following table summarizes the activity of options and warrants for the two
years ended December 31, 1999:
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise Exercise
Options Warrants Price Amount
------- -------- ----- ------
<S> <C> <C> <C> <C>
Outstanding, December 31, 1997 748,125 318,959 $ 4.27 $ 4,556,626
Granted 99,375 -- $ 1.82 180,563
Reduction to exercise price -- -- -- (622,644)
Cancelled (3,750) -- $ 2.52 (9,450)
Expired (6,250) (16,250) $ 6.51 (146,500)
----------- ----------- -----------
Outstanding, December 31, 1998 837,500 302,709 $ 3.47 3,958,595
Granted 117,000 651,331 $ 1.20 922,000
Expired (58,000) (302,709) $ 4.51 (1,627,000)
----------- ----------- -----------
Outstanding, December 31, 1999 896,500 651,331 $ 2.03 $ 3,253,595
=========== =========== ===========
</TABLE>
NOTE 11 - STOCK-BASED COMPENSATION
The Company accounts for stock based compensation in accordance with Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". The standard requires the Company to adopt the "fair value"
method with respect to stock-based compensation of consultants and other
non-employees, which resulted in charges to operations of $309,106 and $54,977
during the years ended December 31, 1999 and 1998, respectively. Additionally,
$24,790 was capitalized as offering costs in connection with the private
placement in 1998. During 1999, the Company capitalized $65,730 in loan fees.
The Company did not adopt the fair value method with respect to employee stock
options; the Company continues to account for these under the "intrinsic value"
method. Had the Company adopted the fair value method with respect to options
issued to employees as well, an additional $35,617 would have been charged to
income in 1998; proforma net loss would have been $1,607,000 and net loss per
share would have been $.70 on both a basic and diluted basis.
F-17
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 11 - STOCK-BASED COMPENSATION (Continued)
In 1998 the Board approved a reduction in the exercise price for options granted
to certain employees, consultants, and other non-employees. Because of this, it
was necessary to calculate the difference between the fair value of the modified
option and the value of the old option immediately before the terms were
modified.
The Company did not adopt the fair value method with respect to employee stock
options; the Company continues to account for these under the "intrinsic value"
method. Had the Company adopted the fair value method with respect to options
issued to employees as well, an additional $48,000 would have been charged to
income in 1999; proforma net income would have been $1,077,687 and net income
per share would have been $.31 on the basic basis and $.28 on the diluted basis.
NOTE 12 - EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the Year Ended December 31, 1999
------------------------------------
Per
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to common stockholders $1,125,637 3,438,418 $ .33
Effect of Dilutive Securities
Convertible debt, options and warrants 88,500 730,506 (.04)
---------- ---------- -------
Diluted EPS
Income available to common stockholders $1,214,137 4,168,924 $ .29
including assumed conversions ========== ========== =======
</TABLE>
F-18
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 12 - EARNINGS PER SHARE (Continued)
<TABLE>
<CAPTION>
For the Year Ended December 31, 1998
------------------------------------
Per
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
(Loss) available to common stockholders $(1,588,746) 2,283,093 $ (.68)
Effect of Dilutive Securities
Options and warrants -- -- --
----------- ----------- -------
Diluted EPS
Income available to common stockholders $(1,588,746) 2,283,093 $ (.68)
including assumed conversions =========== =========== =======
</TABLE>
NOTE 13 - COMMITMENTS AND CONTINGENCIES
Operating Leases
- ----------------
The Company leases its facilities under long-term non-cancelable operating
leases. The lease terms provide for increases in future minimum rental payments
based on the Consumer Price Index, and an option to purchase during the lease
term. Future minimum lease commitments as of December 31, 1999 are as follows:
Year Ended Total
December 31, Commitments
------------ -----------
2000 $ 368,000
2001 348,000
2002 342,000
2003 337,000
2004 197,000
--------------
Total $ 1,592,000
==============
Total rentals under all operating leases charged against income amounted to
$407,107 and $404,475 for the years ended December 31, 1999 and 1998,
respectively.
F-19
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued)
Employment Agreements
- ---------------------
The Company is obligated to make certain minimum salary payments to the Chief
Executive Officer and other employee/directors. All contracts expire in 2003, as
follows:
Year Ended
December 31, Total
------------ --------------
2000 $ 345,000
2001 345,000
2002 345,000
2003 230,000
--------------
Total $ 1,265,000
==============
Litigation
- ----------
The Company is a party to a number of lawsuits arising in the normal course of
business. In the opinion of management, the resolution of these matters will not
have a material adverse effect on the Company's financial position.
NOTE 14 - RELATED PARTY TRANSACTIONS
Prior to the disposal of LRL, the Company advanced $203,938 to this subsidiary.
Additional advances of $75,000 were made during 1999. These advances are
expected to be repaid from a joint venture relationship between the Company and
LRL.
NOTE 15 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes was $-0- and $-0- during the years ended December 31,
1999 and 1998, respectively. Cash paid for interest was $151,878 and $103,746
during the years ended December 31, 1999 and 1998, respectively.
During the year ended December 31, 1998, the company issued Series B preferred
stock of $600,000 in connection with the purchase of the Tech Center.
During the year ended December 31, 1998 the Company issued options valued at
$24,790 in connection with the private placement.
During 1999, the Company rescinded the purchase of the Tech center valued at
$600,000 and 450,000 shares of the Company's common stock were cancelled.
During 1999, $150,000 of convertible debt was converted to 85,775 shares of the
Company's common stock.
F-20
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 16 - CONCENTRATION OF CREDIT RISK
Concentrations of credit risk with respect to trade receivables exist due to
large balances with a few customers. At December 31, 1999, the accounts
receivable balance from one significant customer was $632,012, or 57% of the
total accounts receivable balance. Ongoing credit evaluations of customers'
financial conditions are performed and generally no collateral is required. The
Company maintains reserves for potential credit losses, and such losses in the
aggregate have not exceeded management's expectations. Customers are located
throughout the world.
The Company maintains all cash in bank accounts, which at times may exceed
federally insured limits.
NOTE 17 - SUBSEQUENT EVENTS
In February 2000, the Company issued a 12% convertible debenture for $500,000
due February 2001, with interest payable monthly. The debenture is convertible
into the Company's common stock at the lesser of 85% of the market price of the
common stock on the date of conversion or $2.00. In connection with the issuance
of the debenture, the Company issued 100,000 shares of the Company's common
stock as a loan fee.
F-21
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Item
Number Description
<S> <C>
3.1 Articles of Incorporation of A. E. Gosselin Engineering, Inc. (now "Pollution
Research and Control Corp.") (Incorporated herein by reference to Exhibit 3(a) to
the Amendment No. 1 to the Registration Statement on Form 10 of Dasibi
Environmental Corporation (now "Pollution Research and Control Corp.")
3.2 Certificate of Amendment of Articles of Incorporation of A. E. Gosselin
Engineering, Inc. (now "Pollution Research and Control Corp.") (Incorporated
herein by reference to Exhibit 3(a) to the Amendment No. 1 to the Registration
Statement on Form 10 of Dasibi Environmental Corporation (now "Pollution
Research and Control Corp.")
3.3 Certificate of Amendment of Articles of Incorporation of Dasibi Environmental
Corp. (now "Pollution Research and Control Corp.")(Incorporated herein by
reference to Exhibit 3(a) to the Amendment No. 1 to the Registration Statement on
Form 10 of Dasibi Environmental Corporation (now "Pollution Research and
Control Corp.")
3.4 By-laws of A. E. Gosselin Engineering, Inc. (now "Pollution Research and Control
Corp.") (Incorporated herein by reference to Exhibit 3(a) to the Amendment No. 1
to the Registration Statement on Form 10 of Dasibi Environmental Corporation
(now "Pollution Research and Control Corp.")
4.1 Form of Warrant Agreement. (Incorporated herein by reference to Exhibit 4.1 to
the Registration Statement on Form S-1 (File No. 33-26558 of Pollution Research
and Control Corp., dated January 17, 1989.)
4.2 Form of Unit Purchase Warrant. (Incorporated herein by reference to Exhibit 4.2
to the Registration Statement on Form S-1 (File No. 33-26558 of Pollution
Research and Control Corp., dated January 17, 1989.)
4.3 Form of Stock Purchase Warrant. (Incorporated herein by reference to Exhibit 4.3
to the Registration Statement on Form S-1 (File No. 33-26558 of Pollution
Research and Control Corp., dated January 17, 1989.)
10.1 Warrant to Purchase 7,500 shares of Common Stock issued to Frost & Company
P.S. on February 10, 1987. (Incorporated herein by reference to Exhibit 10.2 to the
Registration Statement on Form S-1 (File No. 33-26558) of Pollution Research and
Control Corp., dated January 17, 1989.)
10.2 Employment Agreement, dated July 31, 1987, between Pollution Research and
Control Corp. and Albert E. Gosselin, Jr. (Incorporated herein by reference to
Exhibit 10.3 to the Registration Statement on Form S-1 (File No. 33-26558) of
Pollution Research and Control Corp., dated January 17, 1989.)
10.3 Employees' Incentive Stock Option Plan. (Incorporated herein by reference to
Exhibit 10.4 to the Registration Statement on Form S-1 (File No. 33-26558) of
Pollution Research and Control Corp., dated January 17, 1989.)
<PAGE>
10.4 Employment Agreement, as amended, dated August 19, 1989, between Pollution
Research and Control Corp. and Albert E. Gosslein, Jr. (Incorporated herein by
reference to Exhibit 10-28 to the Annual Report on Form 10-K for the fiscal year
ended June 30, 1989.)
10.5 Lease, dated July 1, 1989, between Pollution Research and Control Corp. and
Shahik Mardeross-ASL. (Incorporated herein by reference to Exhibit 10.30 to the
Annual Report on Form 10-K for the fiscal year ended June 30, 1989.)
10.6 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.)
10.7 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.)
10.8 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.)
10.9 Agreement, dated November 1, 1991, between Pollution Research
and Control Corp. and KVB, Inc. (Incorporated herein by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1991.)
10.10 Purchase Agreement, dated as of December 2, 1991, between Pollution Research
and Control Corp. and CSC Industries, Inc. and affiliated companies Pension Plans
Trust. (Incorporated herein by reference to Exhibit 10.7 to the Amendment No. 1
to the Registration Statment on form S-1 (File No., 33-43124) of Pollution Research
and Control Corp. dated December 23, 1991.)
10.11 Warrant, dated as of December 2, 1991, issued to CSC Industries, Inc. and affiliated
companies Pension Plans Trust. (Incorporated herein by reference to Exhibit 10.8
to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-
43124) of Pollution Research and Control Corp. dated December 23, 1991.)
10.12 Purchase Agreement, dated as of December 9, 1991, between Pollution Research
and Control Corp. and Richard M. Molinsky (Incorporated herein by reference to
Exhibit 10.9 to the Amendment No. 1 to the Registration Statment on form S-1 (File
No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.)
10.13 Warrant, dated as of December 9, 1991, issued to Richard M. Molinsky.
(Incorporated herein by reference to Exhibit 10.10 to the Amendment No. 1 to the
Registration Statment on form S-1 (File No. 33-43124) of Pollution Research and
Control Corp. dated December 23, 1991.)
10.14 Purchase Agreement, dated as of December 11, 1991, between Pollution Research
and Control Corp. and Global Environment Fund. (Incorporated herein by
reference to Exhibit 10.11 to the Amendment No. 1 to the Registration Statment on
<PAGE>
form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated
December 23, 1991.)
10.15 Warrant, dated as of December 11, 1991, issued to Global Enviroment Fund.
(Incorporated herein by reference to Exhibit 10.7 to the Amendment No. 1 to the
Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and
Control Corp. dated December 23, 1991.)
10.16 Purchase Agreement, dated as of December 13, 1991, between Pollution Research
and Control Corp. and Robert A. Tantleff (Incorporated herein by reference to
Exhibit 10.13 to the Amendment No. 1 to the Registration Statement on form S-1
(File No. 33-43124) of Pollution Research and Control Corp. dated December 23,
1991.)
10.17 Warrant, dated as of December 2, 1991, issued to Robert A. Tantleff. (Incorporated
herein by reference to Exhibit 10.14 to the Amendment No. 1 to the Registration
Statement on form S-1 (File No. 33-43124) of Pollution Research and Control
Corp. dated December 23, 1991.)
10.18 Purchase Agreement, dated as of December 16, 1991, between Pollution Research
and Control Corp. and Stanley Baker. (Incorporated herein by reference to Exhibit
10.15 to the Amendment No. 1 to the Registration Statement on form S-1 (File No.
33-43124) of Pollution Research and Control Corp. dated December 23, 1991.)
10.19 Warrant, dated as of December 16, 1991, issued to Stanley Baker. (Incorporated
herein by reference to Exhibit 10.16 to the Amendment No. 1 to the Registration
Statment on form S-1 (File No. 33-43124) of Pollution Research and Control Corp.
dated December 23, 1991.)
10.20 Purchase Agreement, dated as of December 16, 1991, between Pollution Research
and Control Corp. and Bruce Lynch. (Incorporated herein by reference to Exhibit
10.17 to the Amendment No. 1 to the Registration Statement on form S-1 (File No.
33-43124) of Pollution Research and Control Corp. dated December 23, 1991.)
10.21 Warrant, dated as of December 16, 1991, issued to Bruce Lynch. (Incorporated
herein by reference to Exhibit 10.18 to the Amendment No. 1 to the Registration
Statement on form S-1 (File No. 33-43124) of Pollution Research and Control
Corp. dated December 23, 1991.)
10.22 Purchase Agreement, dated as of December 16, 1991, between Pollution Research
and Control Corp. and John Kilmartin. (Incorporated herein by reference to Exhibit
10.19 to the Amendment No. 1 to the Registration Statement on form S-1 (File No.
33-43124) of Pollution Research and Control Corp. dated December 23, 1991.)
10.23 Warrant, dated as of December 16, 1991, issued to John Kilmartin. (Incorporated
herein by reference to Exhibit 10.20 to the Amendment No. 1 to the Registration
Statement on form S-1 (File No. 33-43124) of Pollution Research and Control
Corp. dated December 23, 1991.)
10.24 Consulting Agreement, dated January 3, 1992, between Pollution Research and
Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit
10.24 to the Annual Report on Form 10-K for the fiscal year ended December 31,
1992.)
<PAGE>
10.25 Option Agreement, dated January 3, 1992, between Pollution Research and Control
Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.25
to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.)
10.26 Option Agreement, dated March 11, 1992 between Pollution Research and Control
Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.26
to the Annual Report on Form 10-K for the fiscal year eneded December 31, 1992.)
10.27 Agreement, dated March 5, 1992, between Pollution Research and Control Corp.
and Lee Sion. (Incorporated herein by reference to Exhibit 10.27 to the Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.)
10.28 Option Agreement, dated June 22, 1992, between Pollution Research and Control
Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.28
to the Annual Report on Form 10-K for the fiscal year ended December 31,
1992.)
10.29 Option Agreement, dated June 22, 1992, between Pollution Research and Control
Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.29
to the Annual Report on Form 10-K for the fiscal year ended December 31,
1992.)
10.30 Lease Agreement, dated June 1, 1992, between Dasibi Environmental Group. and
Bernard C. Mills, Jr. (Incorporated herein by reference to Exhibit 10.30 to the
Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.)
10.31 Lease Agreement, dated January 6, 1994, between Dasibi Environmental Group.
and the Prudential Insurance Company of America. (Incorporated herein by
reference to Exhibit 10.31 to the Annual Report on form 10-KSB for the fiscal year
ended December 31, 1994.)
10.32 Agreement, and Bill of Sale, dated February 18, 1994, between Pollution Research
and Control Corp. and General Monitors, Inc. (Incorporated herein by reference to
Exhibit 10.32 to the Annual Report on form 10-KSB for the fiscal year ended
December 31, 1994.)
10.33 Stipulation of Settlement, dated February 1994, between Pollution Research and
Control Corp. and Diversified Research Partners Limited Partnership.
(Incorporated herein by reference to Exhibit 10.33 to the Annual Report on form
10-KSB for the fiscal year ended December 31, 1994.)
10.34 Requirements Contract dated March 10, 1994, between Pollution Research and
Control Corp. and Logan Research, Ltd. (Incorporated herein by reference to
Exhibit 10.34 to the Annual Report on form 10-KSB for the fiscal year ended
December 31, 1994.)
10.35 Lease Agreement dated April 15, 1994, between Dasibi Environmental Corp. and
Summit Park Associates. (Incorporated herein by reference to Exhibit 10.35 to the
Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.)
10.36 Amended Employment Agreement, effective August 31, 1993, between Pollution
Research and Control Corp. and Albert E. Gosselin, Jr., (Incorporated herein by
reference to Exhibit 10.36 to the Annual Report on form 10-KSB for the fiscal year
ended December 31, 1994.)
<PAGE>
10.37 Employment Agreement, dated July 20, 1994, between Pollution Research and
Control Corp. and Cynthia L. Gosselin (Incorporated herein by reference to Exhibit
10.37 to the Annual Report on form 10-KSB for the fiscal year ended December 31,
1994.)
10.38 Final Judgment of Permanent Injunction and Other Relief as to Pollution Research
and Control Corp. dated July 7, 1994 in Case Number 1.94CV01425, the Securities
and Exchange Commission v. Pollution Research and Control Corp., Albert E.
Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.38
to the Annual Report on form 10-KSB for the fiscal year ended December 31,
1994.)
10.39 Final Judgment of Permanent Injunction and Other Relief as to Pollution Research
and Contorl Corp. dated July 13, 1994 in Case Number 1.94CV01425, the
Securities and Exchange Commission v. Pollution Research and Control Corp.,
Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to
Exhibit 10.39 to the Annual Report on form 10-KSB for the fiscal year ended
December 31, 1994.)
10.40 Consent of Albert E. Gosselin dated June 7, 1994, in Case Number 1.94CV01425,
the Securities and Exchange Commission v. Pollution Research and Control Corp.,
Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to
Exhibit 10.40 to the Annual Report on form 10-KSB for the fiscal year ended
December 31, 1994.)
10.41 Final Judgment of Permanent Injunction and Other Relief as to Cynthia Gosselin,.
dated July 13, 1994 in Case Number 1.94CV01425, the Securities and Exchange
Commission v. Pollution Research and Control Corp., Albert E. Gosselin and
Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.41 to the Annual
Report on form 10-KSB for the fiscal year ended December 31, 1994.)
10.42 Consent of Cynthia L.. Gosselin dated June 7, 1994, in Case Number
1.94CV01425, the Securities and Exchange Commission v. Pollution Research and
Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by
reference to Exhibit 10.41 to the Annual Report on form 10-KSB for the fiscal year
ended December 31, 1994.)
10.43 Warrant to Purchase 40,000 Shares of Common Stock of Pollution Research and
Control Corp., dated January 22, 1990, issued to Marty Williams. ((Incorporated
herein by reference to Exhibit 4.9 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.44 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp., of Marty Williams, dated effective June 6, 1994. ((Incorporated
herein by reference to Exhibit 4.10 to the Registration Statement on form S-3
(Registration No., 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.45 Warrant to Purchase 202,500 Shares of Common Stock of Pollution Research and
Control Corp., dated December 2, 1991, issued to CSC Industries, Inc. and
<PAGE>
affiliated companies. (Incorporated herein by reference to Exhibit 4.11 to the
Registration Statement on form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp. dated June 7, 1995.)
10.46 Amendment Warrant to Purchase Common Stock of Pollution Research and Control
Corp., of CSC Industries, Inc. and affiliated companies Pension Plans Trust, dated
effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.12 to the
Registration Statement on form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp. dated June 7, 1995.)
10.47 Warrant to Purchase 67,500 Shares of Common Stock of Pollution Research and
Control Corp., dated December 8, 1991, issued to Richard M. Molinsky.
(Incorporated herein by reference to Exhibit 4.13 to the Registration Statement on
form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp.
dated June 7, 1995.)
10.48 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp., of Richard M. Molinsky, dated effective June 6, 1994.
(Incorporated herein by reference to Exhibit 4.14 to the Registration Statement on
form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp.
dated June 7, 1995.)
10.49 Warrant to Purchase 135,000 Shares of Common Stock of Pollution Research and
Control Corp., dated December 11, 1991, issued to Kingsley & Co. (formerly
Global Environment Fund) (Incorporated herein by reference to Exhibit 4.15 to the
Registration Statement on form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp. dated June 7, 1995.)
10.50 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Kingsley & Co. (formerly Global Environment Fund), dated
effective June 6, 194. (Incorporated herein by reference to Exhibit 4.16 to the
Registration Statement on form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp. dated June 7, 1995.)
10.51 Warrant to Purchase 67,500 Shares of Common Stock of Pollution Research and
Control Corp., dated December 13, 1991, issued to A. Robert Tantleff.
(Incorporated herein by reference to Exhibit 4.17 to the Registration Statement on
form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp.
dated June 7, 1995.)
10.52 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of A. Robert Tantleff, dated effective June 6, 1994. (Incorporated
herein by reference to Exhibit 4.18 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.53 Warrant to Purchase 101,250 Shares of Common Stock of Pollution Research and
Control Corp., dated December 16, 1991, issued to Stanley Becker. (Incorporated
herein by reference to Exhibit 4.19 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.54 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Stanley Becker, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.20 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
<PAGE>
10.55 Warrant to Purchase 27,000 Shares of Common Stock of Pollution Research and
Control Corp., dated December 16, 1991, issued to John Kilmartin. (Incorporated
herein by reference to Exhibit 4.21 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.56 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of John Kilmartin, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.22 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.57 Warrant to Purchase 74,250 Shares of Common Stock of Pollution Research and
Control Corp., dated December 16, 1991, issued to Bruce Lynch.. (Incorporated
herein by reference to Exhibit 4.23 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.58 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Bruce Lynch, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.24 to the Registration Statement on form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.59 Warrant to Purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. of Michael Young, dated May 24, 1991. (Incorporated herein by
reference to Exhibit 4.25 to the Registration Statement on form S-3 (Regsistration
No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.)
10.60 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Michael Young, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.26 to the Registration Statement on form S-3
(Regsistration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.61 Warrant to Purchase 12,000 Shares of Common Stock of Pollution Research and
Control Corp., dated December 16, 1991, of Kennedy Capital Management, dated
November 26, 1991. (Incorporated herein by reference to Exhibit 4.27 to the
Registration Statement on form S-3 (Regsistration No. 33-60035) of Pollution
Research and Control Corp. dated June 7, 1995.)
10.62 Amendment to Warrant to purchase Common Stock of Pollution Research and
Control Corp. of Kennedy Capital Management dated effective June 6, 1994.
(Incorporated herein by reference to Exhibit 4.28 to the Registration Statement on
form S-3 (Regsistration No. 33-60035) of Pollution Research and Control Corp.
dated June 7, 1995.)
10.63 Pollution Research and Control 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.
dated June 7, 1995.)
<PAGE>
10.64 Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research and
Control Corp. of Stanely Becker dated November 8, 1993. (Incorporated herein by
reference to Exhibit 4.30 to the Registration Statement on Form S-3 (Registration
No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.)
10.65 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Stanley Becker, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.31 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.66 Warrant to Purchase 5,500 Shares of Common Stock of Pollution Research and
Control Corp. of Bruce Lynch dated November 8, 1993. (Incorporated herein by
reference to Exhibit 4.32 to the Registration Statement on Form S-3 (Registration
No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.)
10.67 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Bruce Lynch, dated effective June 6, 1994. (Incorporated herein
by reference to Exhibit 4.33 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.68 Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research and
Control Corp. of Robert Tantleff dated November 8, 1993. (Incorporated herein
by reference to Exhibit 4.34 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.69 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Robert Tantleff, dated effective June 6, 1994. (Incorporated
herein by reference to Exhibit 4.35 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.70 Warrant to Purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp. of Edward G. Lowell dated November 8, 1995. (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. dated June
7, 1995.)
10.71 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. dated June 7, 1995.)
10.72 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Frost and Company P.S. dated effective February 9, 1992.
(Incorporated herein by reference to Exhibit 4.38 to the Registration Statement on
<PAGE>
Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp.
dated June 7, 1995.)
10.73 Amendment to Warrant to Purchase Common Stock of Pollution Research and
Control Corp. of Kial, Ltd., dated effective January 9, 1992. (Incorporated herein
by reference to Exhibit 4.39 to the Registration Statement on Form S-3
(Registration No. 33-60035) of Pollution Research and Control Corp. dated June
7, 1995.)
10.74 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and
Control Corp. of Albert E. Gosselin, Jr., dated as of June 29, 1995 (Incorporated
herein by reference to Exhibit 4.40 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.75 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Cindy Gosselin dated as of June 29, 1995. (Incorporated herein
by reference to Exhibit 4.41 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.76 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Barbara L. Gosselin dated as of June 29, 1995. (Incorporated
herein by reference to Exhibit 4.42 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.77 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Gary L. Dudley dated as of June 29, 1995. (Incorporated herein
by reference to Exhibit 4.43 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.78 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Marcia Smith dated as of June 29, 1995. (Incorporated herein by
reference to Exhibit 4.44 to the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and
Control Corp., dated January 17, 1996.)
10.79 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Craig E. Gosselin dated as of June 29, 1995. (Incorporated herein
by reference to Exhibit 4.45 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.80 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. of Keith Gosselin dated as of June 29, 1995. (Incorporated herein
by reference to Exhibit 4.46 to the Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution
Research and Control Corp., dated January 17, 1996.)
10.81 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
<PAGE>
reference to Exhibit 4.47 to the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and
Control Corp., dated January 17, 1996.)
10.82 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. of Kimberly Chu dated as of June 29, 1995. (Incorporated herein by
reference to Exhibit 4.48 to the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and
Control Corp., dated January 17, 1996.)
10.83 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 Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and
Control Corp., dated January 17, 1996.)
10.84 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. of Randy Foy dated as of June 29, 1995. (Incorporated herein by
reference to Exhibit 4.50 to the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and
Control Corp., dated January 17, 1996.)
10.85 Option to Purchase 200,000 Shares of Common Stock of Pollution Research and
Control Corp. of J. Paul Consulting Group dated effective July 18, 1995.
(Incorporated herein by reference to Exhibit 4.51 to the Post-Effective Amendment
No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of
Pollution Research and Control Corp., dated January 17, 1996.)
10.86 Agreement dated June 11, 1996, among Logan Medical Devices,
Inc., party of the first part, Ronald Bruce Logan-Sinclair and
Howard George Vincent Cooke, parties of the second part, and
Pollution Research and Control Corp., party of the third part.
(Incorporated herein by reference to Exhibit 10.86 to the
Annual Report on Form 10-K for the fiscal year ended December
31, 1996.)
10.87 Employment Agreement dated June 11, 1996, between Logan Medical Devices, Inc.
and Logan Research Ltd., on the one hand, and Ronald Bruce Logan-Sinclair, on
the other hand. (Incorporated herein by reference to Exhibit 10.87 to the Annual
Report on Form 10-K for the fiscal year ended December 31, 1996.)
10.88 Guarantee dated effective June 11, 1996, by Logan Medical Devices, Inc. in favor
of Namulas Pension Trustees Limited. (Incorporated herein by reference to Exhibit
10.88 to the Annual Report on Form 10-K for the fiscal year ended December 31,
1996.)
10.89 Loan and Security Agreement dated June 28, 1996, between Logan Medical
Devices, Inc., on the one hand, and Ronald Bruce Logan-Sinclair and Howard
George Vincent Cooke, on the other hand. (Incorporated herein by reference to
Exhibit 10.89 to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.)
10.90 Nine Per Cent Debenture due June 28, 2,006, in the face amount
of $285,714.29, bearing interest quarterly commencing June 30,
1998. (Incorporated herein by reference to Exhibit 10.90 to
the Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.)
<PAGE>
10.91 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Phil Huss. Option Agreement, datedas of April 1, 1996
between Pollution Research and Control Corp. and Phil Hull. (Incorporated herein
by reference to Exhibit 4.11 to the Registration Statement on Form S-3
(Registration No. 33-14133) of Pollution Research and Control Corp. dated October
15, 1996.)
10.92 Consulting Agreement dated as of May 30, 1996, between Pollution Research and
Control Corp. and Liviakis Financial Communications, Inc. (Incorporated herein
by reference to Exhibit 4.12 to the Registration Statement on Form S-3
(Registration No. 33-14133) of Pollution Research and Control Corp. dated
October 15, 1996.)
10.93 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between
Pollution Research and Control Corp. and Liviakis Financial Communications, Inc.
(Incorporated herein by reference to Exhibit 4.13 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.
dated October 15, 1996.)
10.94 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between
Pollution Research and Control Corp. and Robert B. Prag. (Incorporated herein by
reference to Exhibit 4.14 to the Registration Statement on Form S-3 (Registration
No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.)
10.95 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996,
between Pollution Research and Control Corp. and Liviakis Financial
Communications, Inc. (Incorporated herein by reference to Exhibit 4.15 to the
Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution
Research and Control Corp. dated October 15, 1996.)
10.96 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996,
between Pollution Research and Control Corp. and Robert B. Prag. (Incorporated
herein by reference to Exhibit 4.16 to the Registration Statement on Form S-3
(Registration No. 33-14133) of Pollution Research and Control Corp. dated
October 15, 1996.)
10.97 Amendment to Consulting Agreement dated 5/30/96 between Pollution Research
and Control Corp. and Liviakis Financial Communications, Inc., dated July 31,
1996. (Incorporated herein by reference to Exhibit 4.17 to the Registration
Statement on Form S-3 (Registration No.33-14133) of Pollution Research and
Control Corp. dated October 15, 1996.)
10.98 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. (Incorporated herein by reference to Exhibit 4.18 to the
Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution
Research and Control Corp. dated October 15, 1996.)
10.99 Option to Purchase 55,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Aubrey Hornsby; Option Agreement dated as of May 31,
<PAGE>
1996, between Pollution Research and Control Corp. and Aubrey Hornsby.
(Incorporated herein by reference to Exhibit 10.99 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.100 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Ernestine Taylor; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. Ernestine Taylor.
(Incorporated herein by reference to Exhibit 10.100 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.101 Option to Purchase 30,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Debbie Kendrick; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Debbie Kendrick.
(Incorporated herein by reference to Exhibit 10.101 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.102 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Roland Fink; Option Agreement, dated as of May 31, 1996,
between Pollution Research and Control Corp. and Roland Fink. (Incorporated
herein by reference to Exhibit 10.102 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.)
10.103 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Charles Conner; Option Agreement, dated as of May 31,
1996 between Pollution Research and Control Corp. and Charles Conner.
(Incorporated herein by reference to Exhibit 10.103 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.104 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Patricia Cudd; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Patricia Cudd.
(Incorporated herein by reference to Exhibit 10.104 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.105 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Jeffrey Harkey; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Jeffrey Harkey.
(Incorporated herein by reference to Exhibit 10.105 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.106 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to James Bowers; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and James Bowers.
(Incorporated herein by reference to Exhibit 10.106 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.107 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Michael Jones; Option greement, dated as of May 31,
1996, between Pollution Research Corp. and Michael Jones. (Incorporated herein
by reference to Exhibit 10.107 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.)
<PAGE>
10.108 Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. issued to Charles McQuaig; Option
Agreement, dated as of May 31, 1996, between Pollution
Research and Control Corp. and Charles McQuaig.(Incorported
herein by reference to Exhibit 10.108 to the Annual Report on
Form 10-K for the fiscal year ended December 31, 1996.)
10.109 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Daniel Patanjo; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Daniel Patanjo.
(Incorporated herein by reference to Exhibit 10.109 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.110 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Karen Perry; Option Agreement, dated as of May 31, 1996,
between Pollution Research and Control Corp. and Karen Perry. (Incorporated
herein by reference to Exhibit 10.110 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.)
10.111 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Ricky Sonnier; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Ricky Sonnier.
(Incorporated herein by reference to Exhibit 10.111 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.112 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Victor Valerio; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Victor Valerio.
(Incorporated herein by reference to Exhibit 10.112 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.113 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Spencer Abrams; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Spencer Abrams.
(Incorporated herein by reference to Exhibit 10.113 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.114 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Dan Busby; Option Agreement, dated as of May 31, 1996,
between Pollution Research and Control Corp. and Dan Busby. (Incorporated
herein by reference to Exhibit 10.114 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.)
10.115 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Frank Getautas; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Frank Getautas.
(Incorporated herein by reference to Exhibit 10.115 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.116 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Mitzi Narramore; Option Agreement, dated as of May 31,
1996, between Pollution Research and Control Corp. and Mitzi Narramore.
(Incorporated herein by reference to Exhibit 10.116 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
<PAGE>
10.117 Option to Purchase 300,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Ron Logan-Sinclair; Option Agreement, dated as of June
1, 1996, between Pollution Research and Control Corp. and Ron Logan-Sinclair.
(Incorporated herein by reference to Exhibit 10.117 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.118 Option to Purchase 123,000 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.
(Incorporated herein by reference to Exhibit 10.118 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.119 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. Gosslein.
(Incorporated herein by reference to Exhibit 4.19 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.
dated October 15, 1996.)
10.120 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.
(Incorporated herein by reference to Exhibit 4.20 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control
Corp.dated October 15, 1996.)
10.121 Option to Purchase 20,000 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.
(Incorporated herein by reference to Exhibit 10.121 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.122 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.
(Incorporated herein by reference to Exhibit 4.21 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.
dated October 15, 1996.)
10.123 Option to Purchase 20,000 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.
(Incorporated herein by reference to Exhibit 10.123 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.124 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.
(Incorporated herein by reference to Exhibit 4.22 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.
dated October 15, 1996.
<PAGE>
10.125 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Cynthia L. Gosslin; Option Agreement, dated as of June
1, 1996, between Pollution Research and Control Corp. and Cynthia L. Gosselin.
(Incorporated herein by reference to Exhibit 10.125 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.126 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. (Incorporated
herein by reference to Exhibit 4.23 to the Registration Statement on Form S-3
(Registration No. 33-14133) of Pollution Research and Control Corp. dated October
15, 1996.)
10.127 Option to Purchase 20,000 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. (Incorporated
herehin by reference to Exhibit 10.127 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.)
10.128 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.
(Incorporated herein by reference to Exhibit 4.24 to the Registration Statement on
Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.
dated October 15, 1996.)
10.129 Option to Purchase 20,000 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.
(Incorporated herein by reference to Exhibit 10.129 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.130 Option to Purchase 37,500 Shares of Common Stock of Pollution Research Corp.
issued to Lee Sion; Option Agreement, dated as of June 1, 1996, between Pollution
Research and Control Corp. and Lee Sion. (Incorporated herein by reference to
Exhibit 10.130 to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.)
10.131 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Patricia Cudd; Option Agreement, dated as of June 1,
1996, between Pollution Research and Control Corp. and Patricia Cudd.
(Incorporated herein by reference to Exhibit 10.131 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.132 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Roland Fink; Option Agreement, dated as of June 1, 1996,
between Pollution Research and Control Corp. and Roland Fink. (Incorporated
herein by reference to Exhibit 10.132 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.)
10.133 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and John Ann Hotchkiss; Warrant to Purchase 291,667 Shares of
Common Stock of Pollution Research and Control Corp. dated June 15, 1996,
issued to John Ann Hotchkiss. (Incorporated herein by reference to Exhibits 4.25
<PAGE>
and 4.26 to the Registration Statement on Form S-3 (Registration No. 33-14133)
of Pollution Research and Control Corp. dated October 15, 1996.)
10.134 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and David Firestone; Warrant to Purchase 166,667 Shares of
Common Stock of Pollution Research and Control Corp. dated June 15, 1996,
issued to David Firestone. (Incorporated herein by reference to Exhibits 4.27 and
4.28 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.135 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Irawan Onggara; Warrant to Purchase 166,667 Shares of
Common Stock of Pollution Research and Control Corp., dated June 15, 1996,
issued to Irawan Onggara.(Incorporated herein by reference to Exhibits 4.29 and
4.30 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.136 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and John M. Liviakis; Warranto to Purchase 66,667 Shares of
Common Stock of Pollution Research and Control Corp. dated June 15, 1996,
issued to John M. Liviakis. (Incorporated herein by reference to Exhibits 4.31 and
4.32 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.137 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Robert S. London; Warrant to Purchase 66,667 Shares of
Common Stock of Pollution Research and Control Corp., dated June 15, 1996,
issued to Robert S. London. (Incorporated herein by reference to Exhibits 4.33 and
4.34 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.138 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Robert B. Prag; Warranto to Purchase 66,667 Shares of
Common Stock of Pollution Research and Control Corp., dated June 15, 1996,
issued to Robert B. Prag. (Incorporated herein by reference to Exhibits 4.35 and
4.36 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.139 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Shawn Cady; Warrant to Purchase 41,667 Shares of Common
Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to
Shawn Cady. (Incorporated herein by reference to Exhibits 4.37 and 4.38 to the
Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution
Research and Control Corp. dated October 15, 1996.)
10.140 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Donald Carstens; Warrant to Purchase 41,667 Shares of
Common Stock of Pollution Research and Control Corp., dated June 15, 1996
issued to Donald Carstens. (Incorporated herein by reference to Exhibits 4.39 and
<PAGE>
4.40 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.141 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Ling Nen Chuan; Warrant to Purchase 41,667 Shares of
Common Stock of Pollution Research and Control Corp., dated June 15, 1996,
issued to Ling Nen Chuan. (Incorporated herein by reference to Exhibits 4.41 and
4.42 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.142 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Sanibel Capital Corporation; Warrant to Purchase 41,667 Shares
of Common Stock of Pollution Research and Control Corp. dated June 15, 1996,
issued to Sanibel Capital Corporation. (Incorporated herein by reference to
Exhibits 4.43 and 4.44 to the Registration Statement on Form S-3 (Registration No.
33-14133) of Pollution Research and Control Corp. dated October 15, 1996.)
10.143 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and
Control Corp. and Donna Sizemore; Warrant to Purchase 8,333 Shares of Common
Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to
Donna Sizemore. (Incorporated herein by reference to Exhibits 4.45 and 4.46 to the
Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution
Research and Control Corp. dated October 15, 1996.)
10.144 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. (Incorporated herein
by reference to Exhibits 4.47 to the Registration Statement on Form S-3
(Registration No. 33-14133) of Pollution Research and Control Corp. dated October
15, 1996.)
10.145 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Paul Richardson; Option Agreement, dated as of August
6, 1996, between Pollution Research and Control Corp. and Paul Richardson.
(Incorporated herein by reference to Exhibit 10.145 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
10.146 Letter Agreement, dated as of September 20, 1996, between Pollution Research
and Control Corp. and Neil C. Sullivan; Warrant to Purchase 300,000 Shares of
Common Stock of Pollution Research and Control Corp. dated September 20, 1996,
issued to Neil C. Sullivan. (Incorporated herein by reference to Exhibits 4.48 and
4.49 to the Registration Statement on Form S-3 (Registration No. 33-14133) of
Pollution Research and Control Corp. dated October 15, 1996.)
10.147 Consulting Agreement dated November 19, 1996, between Pollution Research and
Control Corp. and Fenway Advisory Group. (Incorporated herein by reference to
Exhibit 10.147 to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.)
10.148 Option to Purchase 400,000 Shares of Pollution Research and Control Corp. issued
to Fenway Advisory Group; Option Agreement dated as of November 19, 1996,
between Pollution Research and Control Corp. and Fenway Advisory Group.
(Incorporated herein by reference to Exhibit 10.148 to the Annual Report on Form
10-K for the fiscal year ended December 31, 1996.)
<PAGE>
10.149 Option to purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. dated as of March 3, 1997 issued to
Barry Soltani. (Incorporated herein by reference to Exhibit
10.149 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1997.)
10.150 Option to purchase 50,000 Shares of Common Stock of Pollution
Research and Control Corp. dated as of April 30, 1997 issued
to Jorel Management.(Incorporated herein by reference to
Exhibit 10.150 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997.)
10.151 Employment Agreement, dated June 9, 1997, between Pollution Research and
Control Corp. and Marcia Smith. (Incorporated herein by reference to Exhibit
10.151 to the Annual Report on Form 10-K for the fiscal year ended December 31,
1997.)
10.152 Amended Employment Agreement dated February 9, 1998 between Pollution
Research and Control Corp. and Cindy Gosselin. (Incorporated herein by reference
to Exhibit 10.152 to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.)
10.153 Letter Agreement dated 3-10-98 to annul the acquisition of Logan Research
Limited (LRL) by Logan Medical Devices (LMD). (Incorporated herein by
reference to Exhibit 10.153to the Annual Report on Form 10K for the fiscal year
ended December 31, 1997.)
10.154 Purchase Agreement dated May 8, 1998 between Pollution Research and Control
Corp. and Albert E. Gosselin, Jr. to purchase 400,000 Shares of Preferred
Convertible Stock. (Incorporated herein by reference to Exhibit 10.154 to the
Annual Report on Form 10K for the fiscal year ended December 31, 1998.)
10.155 Purchase Agreement dated May 8, 1998 between Pollution Research and Control
Corp. and Patricia Cudd to purchase 400,000 Shares of Preferred Convertible
Stock. (Incorporated herein by reference to Exhibit 10.155 to the Annual Report on
Form 10K for the fiscal year ended December 31, 1998.)
10.156 Purchase Agreement dated May 8, 1998 between Pollution Research and Control
Corp. and Gary L. Dudley to purchase 80,000 Shares of Preferred Convertible
Stock. (Incorporated herein by reference to Exhibit 10.156 to the Annual Report on
Form 10K for the fiscal year ended December 31, 1998.)
10.157 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and William T. Richey to purchase 20,000 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.157 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.158 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Ronald E. Patterson to purchase 23,190 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.158 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.159 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
<PAGE>
Corp. and Ronald E. Patterson to purchase 68,810 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.159 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.160 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Mayer Zarchi to purchase 20,000 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.160 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.161 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Fred J. Zalokar to purchase 23,000 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.161 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.162 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Frank T. Anaya to purchase 9,174 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.162 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.163 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Donald A. Carstens to purchase 9,082 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.163 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.164 Purchase Agreement dated June 19, 1998 between Pollution Research and Control
Corp. and Alan L. Talesnick to purchase 18,000 shares of Common Stock.
(Incorporated herein by reference to Exhibit 10.164 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.165 Option to purchase 23,125 Shares of Pollution Research and Control Corp. issued
to Phoenix Alliance, Inc.; Option Agreement dated June 19, 1998 between Pollution
Research and Control Corp. and Phoenix Alliance, Inc. (Incorporated herein by
reference to Exhibit 10.165 to the Annual Report on Form 10K for the fiscal year
ended December 31, 1998.)
10.166 Agreement to purchase a technician service center in Macau
from PIC Computers, Ltd. Agreement dated as of June 24, 1998
between Pollution Research and Control Corp. and PIC
Computers, Ltd. (Incorporated herein by reference to Exhibit
10.166 to the Annual Report on Form 10K for the fiscal year
ended December 31, 1998.)
10.167 Option to purchase 13,750 Shares of Common Stock issued to Marcia Smith;
Option Agreement dated as of December 14, 1998 between Pollution Research and
Control Corp. and Marcia Smith. (Incorporated herein by reference to Exhibit
10.167 to the Annual Report on Form 10K for the fiscal year ended December 31,
1998.)
10.168 Option to purchase 12,500 Shares of Common Stock issued to Cindy Gosselin;
Option Agreement dated as of December 14, 1998 between Pollution Research and
Control Corp. and Cindy Gosselin. (Incorporated herein by reference to Exhibit
10.168 to the Annual Report on Form 10K for the fiscal year ended December 31,
1998.)
10.169 Promissory Note dated as of January 27, 1999 between Pollution Research and
<PAGE>
Control Corp. and Mark S. Rose. (Incorporated herein by reference to Exhibit
10.169 to the Annual Report on Form 10K for the fiscal year ended December 31,
1998.)
10.170 Option to purchase 48,000 Shares of Common Stock issued to Mark S. Rose;
OptionAgreement dated as of January 27, 1999 between Pollution Research and
Control Corp. and Mark S. Rose. (Incorporated herein by reference to Exhibit
10.170 to the Annual Report on Form 10K for the fiscal year ended December 31,
1998.)
10.171 Finder's Agreement dated January 27, 1999 between Pollution Research and
Control Corp. and Rosemary Althaus. (Incorporated herein by reference to Exhibit
10.171 to the Annual Report on Form 10K for the fiscal year ended December 31,
1998.)
10.172 Option to purchase 5,000 Shares of Common Stock of Pollution Research and
Control Corp.; Option Agreement dated as of January 27, 1999 between Pollution
Research and Control Corp. and Rosemary Althaus. (Incorporated herein by
reference to Exhibit 10.172 to the Annual Report on Form 10K for the fiscal year
ended December 31, 1998.)
10.173 Purchase Agreement to purchase 25,000 units consisting of
25,000 shares of Common Stock and 25,000 Warrants to purchase
Common Stock dated as of February 25, 1999 between Pollution
Research and Control Corp. and William T. Richey.
(Incorporated herein by reference to Exhibit 10.173 to the
Annual Report on Form 10K for the fiscal year ended December
31, 1998.)
10.174 Purchase Agreement to purchase 133,333 units consisting of 133,333 shares of
Common Stock and 133,333 Warrants to purchase Common Stock dated as of
February 25, 1999 between Pollution Research and Control Corp. and Ronald E.
Patterson. (Incorporated herein by reference to Exhibit 10.174 to the Annual Report
on Form 10K for the fiscal year ended December 31, 1998.)
10.175 Purchase Agreement to purchase 66,666 units consisting of
66,666 shares of Common Stock and 66,666 Warrants to purchase
Common Stock dated as of February 25, 1999 between Pollution
Research and Control Corp. and Phillip Huss. (Incorporated
herein by reference to Exhibit 10.175 to the Annual Report on
Form 10K for the fiscal year ended December 31, 1998.)
10.176 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Anthony Reneau;Option Agreement dated as of February
25, 1999 between Pollution Research and Control Corp. and Anthony Reneau.
(Incorporated herein by reference to Exhibit 10.176 to the Annual Report on Form
10K for the fiscal year ended December 31, 1998.)
10.177 Purchase Agreement to purchase 14,000 units consisting of 14,000 shares of
Common Stock and 14,000 Warrants to purchase Common Stock dated as of
February 25, 1999 between Pollution Research and Control Corp and Alan L.
Talesnick. (Incorporated herein by reference to Exhibit 10.177 to the Annual Report
on Form 10K for the fiscal year ended December 31, 1998.)
10.178 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 33,333 units consisting of 33,333 shares of Common Stock and 33,333
<PAGE>
warrants to purchase Common Stock, dated as of February 25, 1999, between
Pollution Research and Control Corp. and Maria Molinsky. (Incorporated herein
by reference to Exhibit 4.11 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28,1999.)
10.179 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 9,333 units consisting of 9,333 shares of Common Stock and 9,333
warrants to purchase Common Stock, dated as of February 25, 1999, between
Pollution Research and Control Corp. and Jennifer S. Jauregui. (Incorporated herein
by reference to Exhibit 4.14 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.180 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 6,666 units consisting of 6,666 shares of Common Stock and 6,666
warrants to purchase Common Stock, dated as of February 25, 1999, between
Pollution Research and Control Corp. and Cynthia L. Gosselin. (Incorporated herein
by reference to Exhibit 4.15 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.
10.181 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 133,333 shares of Common Stock dated May 19, 1999, between
Pollution Research and Control Corp. and The Investor Resource Services, Inc..
(Incorporated herein by reference to Exhibit 4.16 to the Registration Statement on
Form S-1, File #333-87965 of Pollution Research and Control Corp. dated
September 28, 1999.
10.182 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 66,667 shares of Common Stock dated May 19, 1999, between Pollution
Research and Control Corp. and Trautman Wasserman & Company, Inc.
(Incorporated herein by reference to Exhibit 4.17 to the Registration Statement on
Form S-1, File #333-87965 of Pollution Research and Control Corp. dated
September 28, 1999.)
10.183 18% Subordinated Convertible Debenture Due December 1, 1999, between
Pollution Research and Control Corp. and The Venezuela Recovery Fund, N.V.
(Incorporated herein by reference to Exhibit 4.18 to the Registration Statement on
Form S-1, File #333-87965 of Pollution Research and Control Corp. dated
September 28, 1999.)
10.184 Financial Consulting and Services Agreement dated May 20, 1999, between
Pollution Research and Control Corp. and Premiere Equities, Inc.(Incorporated
herein by reference to Exhibit 4.19 to the Registration Statement on Form S-1, File
#333-87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.185 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 100,000 shares of Common Stock dated May 27, 1999, between
Pollution Research and Control Corp. and Blagoja Samakoski. (Incorporated
herein by reference to Exhibit 4.20 to the Registration Statement on Form S-1, File
#333-87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.186 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 80,000 shares of Common Stock dated July 16, 1999, between Pollution
Research and Control Corp. and Ronald E. Patterson. (Incorporated herein by
<PAGE>
reference to Exhibit 4.21 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.187 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 30,000 shares of Common Stock dated July 16, 1999, between Pollution
Research and Control Corp. and Phillip T. Huss. (Incorporated herein by reference
to Exhibit 4.22 to the Registration Statement on Form S-1, File #333-87965 of
Pollution Research and Control Corp. dated September 28, 1999.)
10.188 Lock-up Agreement, dated August 12, 1999, between Pollution Research and
Contnrol Corp. and Mr. ALbert E. Gosselin, Jr. (Incorporated herein by reference
to Exhibit 4.23 to the Registration Statement on Form S-1, File #333-87965 of
Pollution Research and Control Corp. dated September 28, 1999.)
10.189 Compromise, Settlement and Release Agreement dated August 12, 1999, between
Pollution Research and Control Corp. and Fidelity Funding. (Incorporated herein
by reference to Exhibit 4.24 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.190 Escrow Agreement dated August 12, 1999, among Pollution Research and Control
Corp., Fidelity Funding, Inc., and American Escrow Company. (Incorporated
herein by reference to Exhibit 4.25 to the Registration Statement on Form S-1, File
#333-87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.191 12% Subordinated Convertible Debenture Due June 1, 2000, dated September 1,
1999, between Pollution Research and Control Corp. and Spiga Limited.
(Incorporated herein by reference to Exhibit 4.26 to the Registration Statement on
Form S-1, File #333-87965 of Pollution Research and Control Corp. dated
September 28, 1999.)
10.192 12% Subordinated Convertible Debenture Due June 1, 2000, dated September 1,
1999, between Pollution Research and Control Corp. and Spiga Limited.
(Incorporated herein by reference to Exhibit 4.27 to the Registration Statement on
Form S-1, File #333-87965 of Pollution Research and Control Corp. dated
September 28, 1999.)
10.193 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 50,000 shares of Common Stock dated September 13, 1999, between
Pollution Research and Control Corp. and Matis Molinsky. (Incorporated herein
by reference to Exhibit 4.28 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.194 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 50,000 shares of Common Stock dated September 13, 1999, between
Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by
reference to Exhibit 4.29 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.195 Investment Letter and Memorandum of Subscription/Purchase Agreement to
purchase 50,000 shares of Common Stock dated September 13, 1999, between
Pollution Research and Control Corp. and Steven Sion. (Incorporated herein by
reference to Exhibit 4.30 to the Registration Statement on Form S-1, File #333-
87965 of Pollution Research and Control Corp. dated September 28, 1999.)
10.196* Warrant to purchase 75,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to IIG Capital LLC; Warrant Agreement dated as of June 1,
1999 between Pollution Research and Control Corp. and IIG Capital LLC.
10.197* Warrant to purchase 30,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Astor Capital; Warrant Agreement dated as of June 1, 1999
between Pollution Research and Control Corp. and Astor Capital.
<PAGE>
10.198* Warrant to purchase 22,500 Shares of Common Stock of Pollution Research and
Control Corp. issued to Spiga Limited; Warrant Agreement dated as of September
1, 1999 between Pollution Research and Control Corp. and Spiga Limited.
10.199* Warrant to purchase 18,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Astor Capital; Warrant Agreement dated as of September
1, 1999 between Pollution Research and Control Corp. and Astor Capital.
10.200* Warrant to purchase 22,500 Shares of Common Stock of Pollution Research and
Control Corp. issued to Spiga Limited; Warrant Agreement dated as of September
1, 1999 between Pollution Research and Control Corp. and Spiga Limited.
10.201* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to IIG Capital LLC; Warrant Agreement dated as of
December 1, 1999 between Pollution Research and Control Corp. and IIG Capital
LLC.
10.202* Warrant to purchase 20,475 Shares of Common Stock of Pollution Research and
Control Corp. issued to Phillip T. Huss; Warrant Agreement dated as of July 16,
1999 between Pollution Research and Control Corp. and Phillip T. Huss.
10.203* Warrant to purchase 54,525 Shares of Common Stock of Pollution Research and
Control Corp. issued to Ronald E. Patterson; Warrant Agreement dated as of July
16, 1999 between Pollution Research and Control Corp. and Ronald E. Patterson.
10.204* Warrant to purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Fidelity Funding; Warrant Agreement dated as of August
12, 1999 between Pollution Research and Control Corp. and Fidelity Funding.
10.205* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Maria Molinsky; Warrant Agreement dated as of
September 13, 1999 between Pollution Research and Control Corp. and Maria
Molinsky.
10.206* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Lee Sion; Warrant Agreement dated as of September 13,
1999 between Pollution Research and Control Corp. and Lee Sion.
10.207* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Steven Sion; Warrant Agreement dated as of September 13,
1999 between Pollution Research and Control Corp. and Steven Sion.
10.208* Registration Rights Agreement, dated June 1, 1999 between Pollution Research and
Control Corp. and Venezuela Recovery Fund.
<PAGE>
10.209* Registration Rights Agreement, Dated September 1, 1999 between Pollution
Research and Control Corp. and Spiga Limited.
10.210 12% Subordinated Convertible Debenture Due February 23, 2001, Dated February
16, 2000, between Pollution Research and Control Corp. and Britannica Associates
Limited (Incorporated herein by reference to Exhibit 4.1 of the Post-Effective
Amendment No. 1 to Form S-3 Registration Statement #333-87965.)
10.211* Warrant to purchase 200,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Britannica Associates Limited; Warrant Agreement dated
as of February 23, 2000.
10.212* Warrant to purchase 100,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Britannica Associates Limited; Warrant Agreement dated
as of February 23, 2000.
10.213* Warrant to purchase 20,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Astor Capital; Warrant Agreement dated as of February 23,
2000.
10.214* Registration Rights Agreement, Dated February 23, 2000 between Pollution
Research and Control Corp. and Britannica Associates Limited.
10.215* Promissory Note due March 21, 2000 dated as of January 21, 2000 between
Pollution Research and Control Corp. and Britannica Associates, Ltd.
10.216* Amendment to Compromise and Settlement Agreement between Fidelity Funding,
Inc. and Pollution Research and Control Corp. dated March 24, 2000.
10.217* Warrant to purchase 87,141 Shares of Common Stock of Pollution Research and
Control Corp. issued to Phillip T. Huss. Warrant Agreement dated as of March 31,
2000.
10.218* Warrant to purchase 187,858 Shares of Common Stock of Pollution Research and
Control Corp. issued to Ronald E. Patterson. Warrant Agreement dated as of March
31, 2000.
10.219* Warrant to purchase 46,875 Shares of Common Stock of Pollution Research and
Control Corp. issued to Lee Sion. Warrant Agreement dated as of March 31, 2000.
10.220* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Steven Sion. Warrant Agreement dated as of March 31,
2000.
0.221* Warrant to purchase 10,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Patricia Cudd. Warrant Agreement dated as of March 31,
2000.
10.222* Warrant to purchase 14,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to Alan Talesnick. Warrant Agreement dated as of March 31,
2000.
10.223* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and
Control Corp. issued to William Richey. Warrant Agreement dated as of March 31,
2000.
10.224* Warrant to purchase 33,333 Shares of Common Stock of Pollution Research and
Control Corp. issued to Maria Molinsky. Warrant Agreement dated as of March 31,
2000.
21* List of Subsidiaries
*Filed herewith
</TABLE>
EXHIBIT 10.196
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires June 1, 2002
Date of Issuance: June 1, 1999 Number of Shares: 75,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
IIG Capital LLC, or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 75,000 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $1.50 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (June 1, 2002, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
<PAGE>
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
<PAGE>
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges created by or through the Issuer. The Issuer further covenants and
agrees that during the period within which this Warrant may be exercised, the
Issuer will at all times have authorized and reserved for the purpose of the
issue upon exercise of this Warrant a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.
<PAGE>
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such
authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
<PAGE>
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but, in
connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other
Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other
Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
<PAGE>
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the contrary,
the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, and continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of the subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to delivery upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this Warrant
has exercised its right as provided in clause (y) of subparagraph (i) of this
subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that
as a condition to the consummation of any such Triggering Event the Issuer shall
secure such right of Holder to sell this Warrant to the Person continuing after
or surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the amounts of
cash, property and/or Securities required under such clause (y) are delivered to
the Holder of this Warrant. The obligation of the Issuer to secure such right of
the Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of this
Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of
<PAGE>
so subdividing, as at the applicable record date, whichever is earlier) to
reflect the increase in the total number of shares of Common Stock outstanding
as a result of such subdivision, or (ii) in the case of a combination of shares,
the Warrant Price shall be proportionately increased (as at the effective date
of such combination or, if the Issuer shall take a record of Holders of its
Common Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
<PAGE>
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
<PAGE>
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
<PAGE>
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
<PAGE>
"Original Issue Date" means June 1, 1999.
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
<PAGE>
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall
<PAGE>
be deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Parker Chapin
Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036,
Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
<PAGE>
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature ____________________
Address ____________________
--------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature _________________________
Address _________________________
-------------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature ________________________
Address ________________________
------------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.197
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires June 1, 2002
Date of Issuance: June 1, 1999 Number of Shares: 30,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
Astor Capital, Inc, or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 30,000 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $1.50 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (June 1, 2002, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
<PAGE>
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
<PAGE>
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the Issuer
shall not be the continuing or surviving corporation of such consolidation
or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but, in
connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other
Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets to
any other Person, or
(d) effect a capital reorganization or reclassification of its Capital
Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the contrary,
the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, and continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of the subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to delivery upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this Warrant
has exercised its right as provided in clause (y) of subparagraph (i) of this
subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that
as a condition to the consummation of any such Triggering Event the Issuer shall
secure such right of Holder to sell this Warrant to the Person continuing after
or surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the amounts of
cash, property and/or Securities required under such clause (y) are delivered to
the Holder of this Warrant. The obligation of the Issuer to secure such right of
the Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of this
Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the
<PAGE>
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether
<PAGE>
general or limited) in any Person which is a partnership, (iii) all
membership interests or limited liability company interests in any limited
liability company, and (iv) all equity or ownership interests in any Person
of any other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means June 1, 1999.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Parker Chapin
Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036,
Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
<PAGE>
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature _______________________
Address _______________________
-----------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature ___________________
Address ___________________
-------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature ___________________
Address ___________________
-------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.198
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires September 1, 2002
Date of Issuance: September 1, 1999 Number of Shares: 22,500
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
SPIGA LIMITED, or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 22,500 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $2.25 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (September 1, 2002, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under
<PAGE>
any federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
<PAGE>
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a
"Triggering Event"):
(a) consolidate with or merge into any other Person and the Issuer
shall not be the continuing or surviving corporation of such consolidation
or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but, in
connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other
Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets to
any other Person, or
(d) effect a capital reorganization or reclassification of its Capital
Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to
the consummation thereof, each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant,
(A) the obligations of the Issuer under this Warrant (and if the Issuer
shall survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release the Issuer from, and
continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such shares of Securities, cash or
property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person,
which counsel shall be reasonably satisfactory to such holder, stating that
this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of the
subsection (a)) shall be applicable to the Securities, cash or property
which such Person may be required to delivery upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of subparagraph
(i) of this subsection (a) to sell this Warrant or a portion thereof, the
Issuer agrees that as a condition to the consummation of any such
Triggering Event the Issuer shall secure such right of Holder to sell this
Warrant to the Person continuing after or surviving such Triggering Event
and the Issuer shall not effect any such Triggering Event unless upon or
prior to the consummation thereof the amounts of cash, property and/or
Securities required under such clause (y) are delivered to the Holder of
this Warrant. The obligation of the Issuer to secure such right of the
Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of
this Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares,
<PAGE>
the Warrant Price shall be proportionately increased (as at the effective date
of such combination or, if the Issuer shall take a record of Holders of its
Common Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or
make any other distribution to its stockholders (without consideration therefor)
or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date
the Issuer shall take a record of the Holders of the Issuer's Capital Stock for
the purpose of receiving such dividend or other distribution (or if no such
record is taken, as at the date of such payment or other distribution), to that
price determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to such
payment of other distribution), by a fraction (1) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution, and (2) the denominator of which shall be the
total number of shares of Common Stock outstanding immediately after such
dividend or distribution (plus in the event that the Issuer paid cash for
fractional shares, the number of additional shares which would have been
outstanding had the Issuer issued fractional shares in connection with said
dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received
by the Issuer shall be deemed to be the following: to the extent that
any Additional Shares of Common Stock or any Common Stock Equivalents
shall be issued for a cash consideration, the consideration received by
the Issuer therefor, or if such Additional Shares of Common Stock or
Common Stock Equivalents are offered by the Issuer for subscription,
the subscription price, or, if such Additional Shares of Common Stock
or Common Stock Equivalents are sold to underwriters or dealers for
public offering without a subscription offering, the public offering
price, in any such case excluding any amounts paid or receivable for
accrued interest or accrued dividends and without deduction of any
compensation, discounts, commissions, or expenses paid or incurred by
the Issuer for or in connection with the underwriting thereof or
otherwise in connection with the issued thereof; to the extent that
such issuance shall be for a consideration other than cash, then,
except as herein otherwise expressly provided, the fair market value of
such consideration at the time of such issuance as determined in good
faith by the Board. The consideration for any Additional Shares of
common Stock issuable pursuant to any Common Stock Equivalents shall be
the consideration received by the Issuer for issuing such Common Stock
Equivalents, plus the additional consideration payable to the Issuer
upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional
Shares of Common Stock or Common Stock Equivalents in payment or
satisfaction of any dividend upon any class of Capital Stock of the
Issuer other than Common Stock, the Issuer shall be deemed to have
received for such Additional Shares of Common Stock or Common Stock
Equivalents a consideration equal to the amount of such dividend so
paid or satisfied. In any case in which the consideration to be
received or paid shall be other than cash, the Board shall notify the
Holder of this Warrant of its determination of the fair market value of
such consideration prior to payment or accepting receipt thereof. If,
within thirty days after receipt of said notice, the Majority Holders
shall notify the Board in writing of their objection to such
determination, a determination of the fair market value of such
consideration shall be made by an Independent Appraiser selected by the
Majority Holders with the approval of the Board (which approval shall
not be unreasonable withheld), whose fees and expenses shall be paid by
the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means September 1, 1999.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Parker Chapin
Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036,
Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature _______________________
Address _______________________
-----------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature ________________________
Address ________________________
------------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature ______________________
Address ______________________
----------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.199
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires September 1, 2002
Date of Issuance: September 1, 1999 Number of Shares: 18,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
Astor Capital, Inc, or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 18,000 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $2.25 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (September 1, 2002, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
<PAGE>
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
<PAGE>
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of
the following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but,
in connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the contrary,
the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, and continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of the subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to delivery upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this Warrant
has exercised its right as provided in clause (y) of subparagraph (i) of this
subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that
as a condition to the consummation of any such Triggering Event the Issuer shall
secure such right of Holder to sell this Warrant to the Person continuing after
or surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the amounts of
cash, property and/or Securities required under such clause (y) are delivered to
the Holder of this Warrant. The obligation of the Issuer to secure such right of
the Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of this
Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
<PAGE>
result of such subdivision, or (ii) in the case of a combination of shares, the
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means September 1, 1999.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of
<PAGE>
any Common Stock Equivalents or Convertible Securities or other rights; or (c)
there shall be any reclassification of the Capital Stock of the Issuer; or (d)
there shall be any capital reorganization by the Issuer; or (e) there shall be
any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or
other disposition of all or substantially all of the Issuer's property, assets
or business (except a merger or other reorganization in which the Issuer shall
be the surviving corporation and its shares of Capital Stock shall continue to
be outstanding and unchanged and except a consolidation, merger, sale, transfer
or other disposition involving a wholly-owned Subsidiary); or (f) there shall be
a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer
or any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Parker Chapin
Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036,
Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature ________________________
Address ________________________
------------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature __________________
Address __________________
------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature ___________________
Address ___________________
-------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.200
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires September 1, 2002
Date of Issuance: September 1, 1999 Number of Shares: 22,500
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
SPIGA LIMITED, or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 22,500 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $2.25 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (September 1, 2002, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
<PAGE>
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
<PAGE>
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of
the following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but,
in connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to
the consummation thereof, each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant,
(A) the obligations of the Issuer under this Warrant (and if the Issuer
shall survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release the Issuer from, and
continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such shares of Securities, cash or
property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person,
which counsel shall be reasonably satisfactory to such holder, stating that
this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of the
subsection (a)) shall be applicable to the Securities, cash or property
which such Person may be required to delivery upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of subparagraph
(i) of this subsection (a) to sell this Warrant or a portion thereof, the
Issuer agrees that as a condition to the consummation of any such
Triggering Event the Issuer shall secure such right of Holder to sell this
Warrant to the Person continuing after or surviving such Triggering Event
and the Issuer shall not effect any such Triggering Event unless upon or
prior to the consummation thereof the amounts of cash, property and/or
Securities required under such clause (y) are delivered to the Holder of
this Warrant. The obligation of the Issuer to secure such right of the
Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of
this Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the
<PAGE>
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means September 1, 1999.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Parker Chapin
Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036,
Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature ______________________
Address ______________________
----------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature _________________
Address _________________
-----------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature _________________
Address _________________
-----------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.201
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM DECEMBER 1, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON DECEMBER 1, 2001
This certifies that, IIG Capital LLC 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 fifty cents ($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 December 10, 2001.
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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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
<PAGE>
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 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.
<PAGE>
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.
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: December 1, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President
and Chief Executive Officer
<PAGE>
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.(City,
State, Zip)
EXHIBIT 10.202
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 20,475 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JULY 16, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JULY 16, 2002
This certifies that, Phillip T. 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 Seventy Five Cents ($.75) 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 July 16, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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 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.
<PAGE>
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.
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: July 16, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President
and Chief Executive Officer
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.203
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 54,525 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM JULY 16, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JULY 16, 2002
This certifies that, Ronald E. Patterson 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 Seventy Five Cents ($.75) 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 July 16, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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 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.
<PAGE>
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.
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: July 16, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President
and Chief Executive Officer
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.204
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 20,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM AUGUST 12, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON AUGUST 12, 2002
This certifies that, Fidelity Funding Inc. 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 Seventy Five Cents ($.75) 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 August 12, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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
<PAGE>
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 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.
<PAGE>
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.
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: August 13, 1999 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
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.205
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM SEPTEMBER 13, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002
This certifies that, Maria Molinsky 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 Two Dollars and 40 cents ($2.40) 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 13, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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 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.
<PAGE>
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.
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 13, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
-------------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.206
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM SEPTEMBER 13, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002
This certifies that, Lee Sion 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 Two Dollars and 40 cents ($2.40) 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 13, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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 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.
<PAGE>
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.
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 13, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
------------------------------------
Albert E. Gosselin, Jr., President
and Chief Executive Officer
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.207
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM SEPTEMBER 13, 1999
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002
This certifies that, Steven Sion 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 Two Dollars and 40 cents ($2.40) 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 13, 2002, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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 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.
<PAGE>
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.
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 13, 1999 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
---------------------------------------
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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.(City, State, Zip)
EXHIBIT 10.208
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 1, 1999, between Pollution Research and Control Corp., a
California corporation (the "Company") and The Venezuela Recovery Fund (the
"Purchaser").
This Agreement is being entered into pursuant to the Debenture, dated
as of the date hereof, issued by the Company in favor of the Purchaser.
The Company and the Purchaser hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(o).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section 3(n).
"Board" shall have the meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Effectiveness Date" means with respect to the Registration Statement
the 180th day following the Closing Date (as that term is defined in the
Purchase Agreement).
"Effectiveness Period" shall have the meaning set forth in Section 2.
<PAGE>
"Event" shall have the meaning set forth in Section 7(e)(i).
"Event Date" shall have the meaning set forth in Section 7(e)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means the 90th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means the Common Stock issuable upon
conversion of the Debenture (the "Common Stock") and the shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any
stock split, stock dividend, recapitalization or similar event with respect to
such Common Stock or Warrant Shares. Notwithstanding anything contained herein
to the contrary, if the actual number of shares of Common Stock issuable upon
exercise of the Warrants exceeds 100% of the number of shares of Common Stock
issuable upon exercise of the Warrants based upon a computation as at the
Closing Date or the Filing Date, the terms "Registrable Securities" shall be
deemed to include such additional shares of Common Stock.
"Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2(a), including (in
<PAGE>
each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post- effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any special counsel to the Holder, for which
the Holder will be reimbursed by the Company pursuant to Section 4.
2. Shelf Registration.
On or prior to the Filing Date the Company shall prepare and file with
the Commission a "shelf" Registration Statement covering all Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall (i) not permit any securities other than
the Registrable Securities to be included in the Registration Statement and (ii)
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the Effectiveness Date, and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period"). If the Company is notified orally or in writing by the
Commission that the Commission has no comments with respect to the Registration
Statement (the "Commission Notice"), the Company shall use its best efforts to
cause the Registration Statement to be declared effective no later than five (5)
business days after receipt of the Commission Notice. If an additional
Registration Statement is required to be filed because the actual number of
shares of Common Stock into which the Warrants are exercisable exceeds the
number of shares of Common Stock initially registered in respect of the
Conversion Shares and the Warrant Shares based upon the computation on the
<PAGE>
Closing Date, the Company shall have twenty (20) Business Days to file such
additional Registration Statement, and the Company shall use its best efforts to
cause such additional Registration Statement to be declared effective by the
Commission as soon as possible, but in no event later than forth-five (45) days
after filing.
3. Registration Procedures.
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith) in
accordance with the method or methods of distribution thereof as specified by
the Holders (except if otherwise directed by the Holders), and cause the
Registration Statement to become effective and remain effective as provided
herein; provided, however, that not less than five (5) Business Days prior to
the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to the Holders
and any Special Counsel, copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be subject to
the review of such Holders and such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or any Special Counsel shall reasonably object in writing within
three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post- effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
<PAGE>
(c) Notify the Holders of Registrable Securities to be sold and any
Special Counsel as promptly as possible (and, in the case of (i)(A) below, not
less than five (5) Business Days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) Use its best efforts to avoid the issuance of, or if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(f) Furnish to each Holder and any Special Counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
<PAGE>
(g) Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
any Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request at least
two (2) Business Days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(k) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on the Nasdaq Small Cap Market and
any other securities exchange, quotation system, market or over-the-counter
bulletin board, if any, on which similar securities issued by the Company are
then listed as and when required pursuant to the Purchase Agreement.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions os Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
<PAGE>
fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) The Company may require each selling Holder to furnish to the
Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration
Statement, and the Company may exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until Such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend its
obligation under this Section 3(n) for more than 45 days in the aggregate during
any 12 month period (each, a "Blackout Period"); provided, however, that no such
postponement or suspension shall be permitted for consecutive 20 day periods,
arising out of the same set of facts, circumstances or transactions.
4. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings
required to be made with the Commission, (C) with respect to filings required to
be made under Nasdaq SmallCap Market Rules and (C) in compliance with state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $10,000, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
<PAGE>
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, which information was reasonably relied on by
the Company for use therein or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto. The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated
by this Agreement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party and
shall survive the transfer of the Registrable Securities by the Holders.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in the Registration
Statement or such Prospectus and that such information was reasonably relied
upon by the Company for use in the Registration Statement, such Prospectus or
such form of prospectus or to the extent that such information relates to such
Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus. Notwithstanding anything to the contrary contained herein, the
Holder shall be liable under this Section 5(b) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment
<PAGE>
of counsel reasonably satisfactory to the Indemnified Party and the payment of
all fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within then (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or result of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
<PAGE>
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party, or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable or required to contribute under this Section 5(c) for only that amount as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Rule 144.
As long as any Holder owns Common Stock, Warrants or Warrant Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Holders with true and complete copies
of all such filings. As long as any Holder owns Common Stock, Warrants or
Warrant Shares, if the Company is not required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Holders and make publicly available in accordance with Rule 144(c) promulgated
under the Securities Act annual and quarterly financial statements, together
with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to
have been made under the Exchange Act. The Company further covenants that it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell Common Stock and
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions referred to in the
Purchase Agreement. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.
<PAGE>
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Without limiting the generality
of the foregoing, without the written consent of the Holders of a majority of
the then outstanding Registrable Securities, the Company shall not grant to any
Person the right to request the Company to register any securities of the
Company under the Securities Act unless the right so granted are subject in all
respects to the prior rights in full of the Holders set forth herein, and are
not otherwise in conflict with the provisions of this Agreement, or the
Registration Rights Agreement has been declared effective by the SEC.
(c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto and
the Persons listed on Schedule 7(c) hereto) may include securities of the
Company in the Registration Statement, and the Company shall not after the date
hereof enter into any agreement providing such right to any of its security
holders, unless the right so granted is subject in all respects to the prior
rights in full of the Holders set forth herein, and is not otherwise in conflict
with the provisions of this Agreement.
(d) Piggy-Back Registrations. If at any time when there is not an
effective Registration Statement covering (i) the Shares of Common Stock or (ii)
the Warrant Shares, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each holder of Registrable Securities
written notice of such determination and, if within thirty (30) days after
receipt of such notice, any such holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
the Purchasers), the Company will cause the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the holder, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to
<PAGE>
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 7(d) that are eligible for sale
pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company).
(e) Failure to File Registration Statement and Other Events. The
Company and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Time or if
certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to the
Filing Date, (or is not declared effective by the Commission on or prior to the
Effectiveness Date or in the event an additional Registration Statement is filed
because the actual number of shares of Common Stock into which the Warrants are
exercisable exceeds the number of shares of Common Stock initially registered is
not filed and declared effective within the time periods set forth in Section
2(a)), or (ii) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act
within five (5) Business Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be "reviewed," or not subject to further review, or (iii) the
Registration Statement is filed with and declared effective by the Commission
<PAGE>
but thereafter ceases to be effective as to all Registrable Securities at any
time prior to the expiration of the Effectiveness Period, without being
succeeded immediately by a subsequent Registration Statement filed with and
declared effective by the Commission, and such cessation continues for a period
of thirty days after written notice thereof to the Company, or (iv) trading in
the Common Stock shall be suspended or if the Common Stock is delisted from the
Nasdaq SmallCap Market for any reason for more than three Business Days in the
aggregate, and such suspension or delisting continues for a period of fourteen
days after written notice thereof to the Company, or (v) the Company breaches in
a material respect any covenant or other material term or condition to this
Agreement, Purchase Agreement (other than a representation or warranty contained
therein) or any other agreement, document, certificate or other instrument
delivered in connection with the transactions contemplated hereby and thereby,
and such breach continues for a period of thirty days after written notice
thereof to the Company, or (vii) the Company has breached Section 3(n) of this
Agreement (any such failure or breach being referred to as an ("Event"), the
Company shall pay in cash as liquidated damages for such failure and not as a
penalty to each Holder an amount equal to 2% of such Holder's pro rata share of
the purchase price paid by all Holders for all shares of Common Stock purchased
and then outstanding pursuant to the Purchase Agreement for each thirty (30) day
period until the applicable Event has been cured, which shall be pro rated for
such periods less than thirty (30) days (the "Periodic Amount"). Payments to be
made pursuant to this Section 7(e) shall be due and payable in cash immediately
upon demand. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of damages that may be incurred by the Holders if the Registration
Statement is not filed on or prior to the Filing Date or has not been declared
effective by the Commission on or prior to the Effectiveness Date and maintained
in the manner contemplated herein during the Effectiveness Time or if any other
Event as described herein has occurred.
(f) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Registration Rights Agreement or the Purchase Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Registration
Rights Agreement or the Purchase Agreement and to enforce specifically the terms
and provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.
(ii) Each of the Company and the Purchasers (i) hereby
irrevocably submits to the jurisdiction of the United States District Court
sitting in the Southern District of New York for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement or the
Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is improper.
Each of the Company and the Purchasers consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(f) shall affect or limit any right to serve
process in any other manner permitted by law.
<PAGE>
(g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each of the Holders. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(h) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern standard time,
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to each Holder at its address set forth under its name on Schedule
A attached hereto, or with respect to the Company, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
Attention: ____________________
Facsimile: ____________________
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Company shall be sent to
________________________, Attention:____________________, Facsimile
No.:__________________. Copies of notices to any Holder shall be sent to Parker
Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York
10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288.
(i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.
The Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder. Each Purchaser
<PAGE>
may assign its rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.
(j) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by the Holder to any transferee of such Holder of all
or a portion of the shares of Common Stock or the Registrable Securities if: (i)
the Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement, and (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement. In
addition, each Holder shall have the right to assign its rights hereunder to any
other Person with the prior written consent of the Company, which consent shall
not be unreasonably withheld. The rights to assignment shall apply to the
Holders (and to subsequent) successors and assigns.
(l) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof.
(m) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provision, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
(p) Shares Held by the Company and its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
<PAGE>
or its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(q) Within two (2) business days after the Registration Statement
which includes the Registrable Securities is ordered effective by the
Commission, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Holders whose Registrable Securities are included in such
Registration Statement) confirmation that the Registration Statemtn has been
declared effective by the Commission in the form attached hereto as Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
POLLUTION RESEARCH AND CONTROL CORP.
By: /s/ Albert E. Gosselin
-------------------------------------------
Albert E. Gosselin
President
THE VENEZUELA RECOVERY FUND, N.V.
By: /s/ Tony Hurley
------------------------------------------
Tony Hurley
VP/SEC
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:__________________
Re: Pollution Research and Control Corp.
------------------------------------
Ladies and Gentlemen:
We are counsel to Pollution Research and Control Corp., a California
corporation (the "Company"), and have represented the Company in connection with
(i) that certain Debenture (the "Debenture") issued by the Company in favor of
The Venezuela Recovery Fund, N.V. (the "Holder") which Debenture is convertible
into shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common
Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered
into a Registration Rights Agreement with the Holder (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined the Registration Rights
Agreement), including the shares of Common Stock issuable upon exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on _______ __, 1999, the Company filed a Registration Statement on
Form S-3 (File No. 333-____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
By:_______________________________
cc: The Venezuela Recovery Fund, N.V.
EXHIBIT 10.209
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of September 1, 1999, between Pollution Research and Control
Corp., a California corporation (the "Company") and Spiga Limited (the
"Purchaser").
This Agreement is being entered into pursuant to the Debenture, dated
as of the date hereof, issued by the Company in favor of the Purchaser.
The Company and the Purchaser hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(o).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section 3(n).
"Board" shall have the meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Effectiveness Date" means with respect to the Registration Statement
the 180th day following the Closing Date (as that term is defined in the
Purchase Agreement).
"Effectiveness Period" shall have the meaning set forth in Section 2.
<PAGE>
"Event" shall have the meaning set forth in Section 7(e)(i).
"Event Date" shall have the meaning set forth in Section 7(e)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means the 90th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means the Common Stock issuable upon
conversion of the Debenture (the "Common Stock") and the shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any
stock split, stock dividend, recapitalization or similar event with respect to
such Common Stock or Warrant Shares. Notwithstanding anything contained herein
to the contrary, if the actual number of shares of Common Stock issuable upon
exercise of the Warrants exceeds 100% of the number of shares of Common Stock
issuable upon exercise of the Warrants based upon a computation as at the
Closing Date or the Filing Date, the terms "Registrable Securities" shall be
deemed to include such additional shares of Common Stock.
"Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2(a), including (in
<PAGE>
each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post- effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any special counsel to the Holder, for which
the Holder will be reimbursed by the Company pursuant to Section 4.
2. Shelf Registration.
On or prior to the Filing Date the Company shall prepare and file with
the Commission a "shelf" Registration Statement covering all Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall (i) not permit any securities other than
the Registrable Securities to be included in the Registration Statement and (ii)
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the Effectiveness Date, and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period"). If the Company is notified orally or in writing by the
Commission that the Commission has no comments with respect to the Registration
Statement (the "Commission Notice"), the Company shall use its best efforts to
cause the Registration Statement to be declared effective no later than five (5)
business days after receipt of the Commission Notice. If an additional
Registration Statement is required to be filed because the actual number of
shares of Common Stock into which the Warrants are exercisable exceeds the
number of shares of Common Stock initially registered in respect of the
Conversion Shares and the Warrant Shares based upon the computation on the
<PAGE>
Closing Date, the Company shall have twenty (20) Business Days to file such
additional Registration Statement, and the Company shall use its best efforts to
cause such additional Registration Statement to be declared effective by the
Commission as soon as possible, but in no event later than forth-five (45) days
after filing.
3. Registration Procedures.
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith) in
accordance with the method or methods of distribution thereof as specified by
the Holders (except if otherwise directed by the Holders), and cause the
Registration Statement to become effective and remain effective as provided
herein; provided, however, that not less than five (5) Business Days prior to
the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to the Holders
and any Special Counsel, copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be subject to
the review of such Holders and such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or any Special Counsel shall reasonably object in writing within
three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post- effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
<PAGE>
(c) Notify the Holders of Registrable Securities to be sold and any
Special Counsel as promptly as possible (and, in the case of (i)(A) below, not
less than five (5) Business Days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) Use its best efforts to avoid the issuance of, or if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(f) Furnish to each Holder and any Special Counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
<PAGE>
(g) Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
any Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request at least
two (2) Business Days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(k) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on the Nasdaq Small Cap Market and
any other securities exchange, quotation system, market or over-the-counter
bulletin board, if any, on which similar securities issued by the Company are
then listed as and when required pursuant to the Purchase Agreement.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions os Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
<PAGE>
fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) The Company may require each selling Holder to furnish to the
Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration
Statement, and the Company may exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until Such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend its
obligation under this Section 3(n) for more than 45 days in the aggregate during
any 12 month period (each, a "Blackout Period"); provided, however, that no such
postponement or suspension shall be permitted for consecutive 20 day periods,
arising out of the same set of facts, circumstances or transactions.
4. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings
required to be made with the Commission, (C) with respect to filings required to
be made under Nasdaq SmallCap Market Rules and (C) in compliance with state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $10,000, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
<PAGE>
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, which information was reasonably relied on by
the Company for use therein or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto. The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated
by this Agreement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party and
shall survive the transfer of the Registrable Securities by the Holders.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in the Registration
Statement or such Prospectus and that such information was reasonably relied
upon by the Company for use in the Registration Statement, such Prospectus or
such form of prospectus or to the extent that such information relates to such
Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus. Notwithstanding anything to the contrary contained herein, the
Holder shall be liable under this Section 5(b) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
<PAGE>
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within then (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or result of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
<PAGE>
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party, or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable or required to contribute under this Section 5(c) for only that amount as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Rule 144.
As long as any Holder owns Common Stock, Warrants or Warrant Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Holders with true and complete copies
of all such filings. As long as any Holder owns Common Stock, Warrants or
Warrant Shares, if the Company is not required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Holders and make publicly available in accordance with Rule 144(c) promulgated
under the Securities Act annual and quarterly financial statements, together
with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to
have been made under the Exchange Act. The Company further covenants that it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell Common Stock and
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions referred to in the
Purchase Agreement. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.
<PAGE>
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Without limiting the generality
of the foregoing, without the written consent of the Holders of a majority of
the then outstanding Registrable Securities, the Company shall not grant to any
Person the right to request the Company to register any securities of the
Company under the Securities Act unless the right so granted are subject in all
respects to the prior rights in full of the Holders set forth herein, and are
not otherwise in conflict with the provisions of this Agreement, or the
Registration Rights Agreement has been declared effective by the SEC.
(c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto and
the Persons listed on Schedule 7(c) hereto) may include securities of the
Company in the Registration Statement, and the Company shall not after the date
hereof enter into any agreement providing such right to any of its security
holders, unless the right so granted is subject in all respects to the prior
rights in full of the Holders set forth herein, and is not otherwise in conflict
with the provisions of this Agreement.
(d) Piggy-Back Registrations. If at any time when there is not an
effective Registration Statement covering (i) the Shares of Common Stock or (ii)
the Warrant Shares, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each holder of Registrable Securities
written notice of such determination and, if within thirty (30) days after
receipt of such notice, any such holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
the Purchasers), the Company will cause the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the holder, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to
<PAGE>
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 7(d) that are eligible for sale
pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company).
(e) Failure to File Registration Statement and Other Events. The
Company and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Time or if
certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to the
Filing Date, (or is not declared effective by the Commission on or prior to the
Effectiveness Date or in the event an additional Registration Statement is filed
because the actual number of shares of Common Stock into which the Warrants are
exercisable exceeds the number of shares of Common Stock initially registered is
not filed and declared effective within the time periods set forth in Section
2(a)), or (ii) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act
within five (5) Business Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be "reviewed," or not subject to further review, or (iii) the
Registration Statement is filed with and declared effective by the Commission
<PAGE>
but thereafter ceases to be effective as to all Registrable Securities at any
time prior to the expiration of the Effectiveness Period, without being
succeeded immediately by a subsequent Registration Statement filed with and
declared effective by the Commission, and such cessation continues for a period
of thirty days after written notice thereof to the Company, or (iv) trading in
the Common Stock shall be suspended or if the Common Stock is delisted from the
Nasdaq SmallCap Market for any reason for more than three Business Days in the
aggregate, and such suspension or delisting continues for a period of fourteen
days after written notice thereof to the Company, or (v) the Company breaches in
a material respect any covenant or other material term or condition to this
Agreement, Purchase Agreement (other than a representation or warranty contained
therein) or any other agreement, document, certificate or other instrument
delivered in connection with the transactions contemplated hereby and thereby,
and such breach continues for a period of thirty days after written notice
thereof to the Company, or (vii) the Company has breached Section 3(n) of this
Agreement (any such failure or breach being referred to as an ("Event"), the
Company shall pay in cash as liquidated damages for such failure and not as a
penalty to each Holder an amount equal to 2% of such Holder's pro rata share of
the purchase price paid by all Holders for all shares of Common Stock purchased
and then outstanding pursuant to the Purchase Agreement for each thirty (30) day
period until the applicable Event has been cured, which shall be pro rated for
such periods less than thirty (30) days (the "Periodic Amount"). Payments to be
made pursuant to this Section 7(e) shall be due and payable in cash immediately
upon demand. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of damages that may be incurred by the Holders if the Registration
Statement is not filed on or prior to the Filing Date or has not been declared
effective by the Commission on or prior to the Effectiveness Date and maintained
in the manner contemplated herein during the Effectiveness Time or if any other
Event as described herein has occurred.
(f) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Registration Rights Agreement or the Purchase Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Registration
Rights Agreement or the Purchase Agreement and to enforce specifically the terms
and provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.
(ii) Each of the Company and the Purchasers (i) hereby
irrevocably submits to the jurisdiction of the United States District Court
sitting in the Southern District of New York for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement or the
Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is improper.
Each of the Company and the Purchasers consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(f) shall affect or limit any right to serve
process in any other manner permitted by law.
<PAGE>
(g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each of the Holders. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(h) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern standard time,
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to each Holder at its address set forth under its name on Schedule
A attached hereto, or with respect to the Company, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
Attention: ____________________
Facsimile: ____________________
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Company shall be sent to
________________________, Attention:____________________, Facsimile
No.:__________________. Copies of notices to any Holder shall be sent to Parker
Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York
10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288.
(i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.
The Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder. Each Purchaser
<PAGE>
may assign its rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.
(j) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by the Holder to any transferee of such Holder of all
or a portion of the shares of Common Stock or the Registrable Securities if: (i)
the Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement, and (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement. In
addition, each Holder shall have the right to assign its rights hereunder to any
other Person with the prior written consent of the Company, which consent shall
not be unreasonably withheld. The rights to assignment shall apply to the
Holders (and to subsequent) successors and assigns.
(l) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof.
(m) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provision, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
(p) Shares Held by the Company and its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
<PAGE>
or its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(q) Within two (2) business days after the Registration Statement
which includes the Registrable Securities is ordered effective by the
Commission, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Holders whose Registrable Securities are included in such
Registration Statement) confirmation that the Registration Statemtn has been
declared effective by the Commission in the form attached hereto as Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
POLLUTION RESEARCH AND CONTROL CORP.
By: /s/ Albert E. Gosselin
--------------------------------------
Albert E. Gosselin
President
THE VENEZUELA RECOVERY FUND, N.V.
By: /s/ Tony Hurley
-------------------------------------
Tony Hurley
VP/SEC
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:__________________
Re: Pollution Research and Control Corp.
Ladies and Gentlemen:
We are counsel to Pollution Research and Control Corp., a California
corporation (the "Company"), and have represented the Company in connection with
(i) that certain Debenture (the "Debenture") issued by the Company in favor of
The Venezuela Recovery Fund, N.V. (the "Holder") which Debenture is convertible
into shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common
Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered
into a Registration Rights Agreement with the Holder (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined the Registration Rights
Agreement), including the shares of Common Stock issuable upon exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on _______ __, 1999, the Company filed a Registration Statement on
Form S-3 (File No. 333-____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
By:_______________________________
cc: Spiga Limited
EXHIBIT 10.211
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires February 23, 2003
Date of Issuance: February 23, 2000 Number of Shares:200,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
Britannica Associates Limited, or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
200,000 shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Common Stock of the
Issuer, at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The initial exercise price of this warrant is $4.50 per
share (subject to adjustment as hereinafter provided). Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (Febriaru 23, 2003, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
<PAGE>
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would adversely
affect in any way the powers, preferences or relative participating,
optional or other special rights of the Common Stock or which would
adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances
and restrictions (other than as provided herein) upon the exercise of this
Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
<PAGE>
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but,
in connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the contrary,
the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, and continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of the subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to delivery upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this Warrant
has exercised its right as provided in clause (y) of subparagraph (i) of this
subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that
as a condition to the consummation of any such Triggering Event the Issuer shall
secure such right of Holder to sell this Warrant to the Person continuing after
or surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the amounts of
cash, property and/or Securities required under such clause (y) are delivered to
the Holder of this Warrant. The obligation of the Issuer to secure such right of
the Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of this
Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares,
<PAGE>
the Warrant Price shall be proportionately increased (as at the effective date
of such combination or, if the Issuer shall take a record of Holders of its
Common Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such purchase, redemption or acquisition. For the purposes of this
<PAGE>
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means February 23, 2000.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Astor Capital,
9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature _________________
Address _________________
-----------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature ________________
Address ________________
----------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature _____________________
Address _____________________
---------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.212
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires February 23, 2003
Date of Issuance: February 23, 2000 Number of Shares:100,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
Britannica Associates Limited, or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
100,000 shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Common Stock of the
Issuer, at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The initial exercise price of this warrant is $2.25 per
share (subject to adjustment as hereinafter provided). Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (February 23, 2003, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
<PAGE>
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to
exceed the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would
adversely affect in any way the powers, preferences or relative
participating, optional or other special rights of the Common Stock or
which would adversely affect the rights of the Holders of the
Warrants,
(iii) take all such action as may be reasonably necessary in
order that the Issuer may validly and legally issue fully paid and
nonassessable shares of Common Stock, free and clear of any liens,
claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be reasonably necessary to enable the
Issuer to perform its obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
<PAGE>
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but,
in connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to
the consummation thereof, each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant,
(A) the obligations of the Issuer under this Warrant (and if the Issuer
shall survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release the Issuer from, and
continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such shares of Securities, cash or
property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person,
which counsel shall be reasonably satisfactory to such holder, stating that
this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of the
subsection (a)) shall be applicable to the Securities, cash or property
which such Person may be required to delivery upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of subparagraph
(i) of this subsection (a) to sell this Warrant or a portion thereof, the
Issuer agrees that as a condition to the consummation of any such
Triggering Event the Issuer shall secure such right of Holder to sell this
Warrant to the Person continuing after or surviving such Triggering Event
and the Issuer shall not effect any such Triggering Event unless upon or
prior to the consummation thereof the amounts of cash, property and/or
Securities required under such clause (y) are delivered to the Holder of
this Warrant. The obligation of the Issuer to secure such right of the
Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of
this Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares,
<PAGE>
the Warrant Price shall be proportionately increased (as at the effective date
of such combination or, if the Issuer shall take a record of Holders of its
Common Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means February 23, 2000.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Astor Capital,
9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature _____________________
Address _____________________
---------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature __________________
Address __________________
------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature __________________
Address __________________
------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.213
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
POLLUTION RESEARCH AND CONTROL CORP.
Expires February 23, 2003
Date of Issuance: February 23, 2000 Number of Shares:20,000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Pollution Research and Control Corp., a California corporation
(together with its successors and assigns, the "Issuer"), hereby certifies that
Astor Capital, Inc. or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to 20,000 shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non- assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The initial exercise price of this warrant is $2.25 per share (subject to
adjustment as hereinafter provided). Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue
date (February 23, 2003, such period being the "Term").
2. Method of Exercise Payment: Issuance of New Warrant: Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
<PAGE>
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such holder's election (i) by certified or official bank
check or (ii) wire transfer.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the Shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Purchaser without the consent of the Company. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will
not offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing share of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
<PAGE>
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been effectively registered under the Securities Act, (B) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonable
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under state securities laws is not required/
Whenever such restrictions shall cease and terminate as to any such
securities, the Holder thereof shall be entitled to receive from the Issuer
(or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares
of Warrant Stock, new certificates) of like tenor not not bearing the
applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid:Reservation and Listing of Shares:Covenants.
(a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through the Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
<PAGE>
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will:
(i) not permit the par value, if any, of its Common Stock to
exceed the then effective Warrant Price,
(ii) no amend or modify an provision of the Certificate of
Incorporation or by-laws of the Issuer in any manner that would
adversely affect in any way the powers, preferences or relative
participating, optional or other special rights of the Common Stock or
which would adversely affect the rights of the Holders of the
Warrants,
(iii) take all such action as may be reasonably necessary in
order that the Issuer may validly and legally issue fully paid and
nonassessable shares of Common Stock, free and clear of any liens,
claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be reasonably necessary to enable the
Issuer to perform its obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the
<PAGE>
Issuer will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holder listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the
Issuer and the Issuer shall be the continuing or surviving Person but,
in connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or
(c) transfer all or substantially all of its properties or assets
to any other Person, or
(d) effect a capital reorganization or reclassification of its
Capital Stock,
then, and in the case of each such Triggering Event, proper provision shall be
made so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, or is
redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
<PAGE>
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date of
closing of any such Triggering Event (the "Event Consideration"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the contrary,
the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, and continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of the subsection (a))
shall be applicable to the Securities, cash or property which such Person may be
required to delivery upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this Warrant
has exercised its right as provided in clause (y) of subparagraph (i) of this
subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that
as a condition to the consummation of any such Triggering Event the Issuer shall
secure such right of Holder to sell this Warrant to the Person continuing after
or surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the amounts of
cash, property and/or Securities required under such clause (y) are delivered to
the Holder of this Warrant. The obligation of the Issuer to secure such right of
the Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of customary
representations and warranties to the purchaser in connection with any such
sale. Prior notice of any Triggering Event shall be given to the Holder of this
Warrant in accordance with Section 12 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares,
<PAGE>
the Warrant Price shall be proportionately increased (as at the effective date
of such combination or, if the Issuer shall take a record of Holders of its
Common Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) or, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the Holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then immediately prior to
such payment of other distribution), by a fraction (1) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (2) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution (plus in the event that the
Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares
in connection with said dividends); or
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer, or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value then in effect,
then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
<PAGE>
after such purchase, redemption or acquisition. For the purposes of this
subsection (f), the date as of which the Per Share Market Value shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (f), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.
(e) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issued thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of Common Stock or Common Stock Equivalents in payment or satisfaction of
any dividend upon any class of Capital Stock of the Issuer other than
Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a
consideration equal to the amount of such dividend so paid or satisfied. In
any case in which the consideration to be received or paid shall be other
than cash, the Board shall notify the Holder of this Warrant of its
determination of the fair market value of such consideration prior to
payment or accepting receipt thereof. If, within thirty days after receipt
of said notice, the Majority Holders shall notify the Board in writing of
their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser
selected by the Majority Holders with the approval of the Board (which
approval shall not be unreasonable withheld), whose fees and expenses shall
be paid by the Issuer.
<PAGE>
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock or other Securities which are or may
be at any time convertible into or exchangeable for shares of Common Stock
or Other Common Stock.
(f) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
<PAGE>
(h) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty days after submission to it
of such dispute. Such opinion shall be final and binding on the parties hereto.
The fees and expenses of such accounting firm shall be paid by the Issuer.
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon
exercise of existing stock options issued under any employee incentive
stock option and/or any qualified stock option plan adopted by the Issuer.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participation or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
<PAGE>
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Pollution Research and Control Corp., a California
corporation, and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq Small Cap Market System.
"Original Issue Date" means February 23, 2000.
<PAGE>
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on Nasdaq or the
over-the-counter market, as applicable, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices at
the close of business on such date or a registered national stock exchange
on which the Common Stock is then listed or if there is no such price on
such date, then the closing bid price on such exchange or quotation system
on the date nearest preceding such date, or (b) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Ping Sheet" quotes for the
relevant conversion period, as determined in good faith by the holder, or
(c) if the Common Stock is not then publicly traded the fair market value
of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent Appraiser, in
which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further
that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The Issuer shall pay all costs and
expenses of each Independent Appraiser. The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
Nasdaq, the over-the-counter market or any registered national stock
exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the Common Stock is not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $2.25, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time, (a) the Issuer shall make any
distributions to the holders of Common Stock; or (b) the Issuer shall authorize
the granting to all holders of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of any Common Stock
<PAGE>
Equivalents or Convertible Securities or other rights; or (c) there shall be any
reclassification of the Capital Stock of the Issuer; or (d) there shall be any
capital reorganization by the Issuer; or (e) there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which the Issuer shall be
the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned Subsidiary); or (f) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or
any partial liquidation of the Issuer or distribution to holders of Common
Stock; then, in each of such cases the Issuer shall give written notice to the
Holder of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or (ii)
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in questions and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., pacific standard time,
<PAGE>
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m. pacific standard time, on any
date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to
_________________________________________ Attn:___________, Facsimile no.:
______________. Copies of notices to the Holder shall be sent to Astor Capital,
9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662.
12. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
14. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
15. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
Pollution Research and Control Corp.
By: /s/ Albert E. Gosselin
President
<PAGE>
EXERCISE FORM
[NAME OF ISSUER]
The undersigned __________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase ______ shares of Common Stock of
________________________________ covered by the within Warrant.
Dated:___________________ Signature ________________________
Address ________________________
------------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated:________________________ Signature ___________________
Address ___________________
-------------------
<PAGE>
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _______________________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with all rights
therein, and does irrevocably constitute and appoint _____________________,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated:________________________ Signature___________________
Address ___________________
-------------------
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of _______, _____ shares of Common Stock issued therefor in the name of
_______________________, Warrant No. W- ________ issued for _______ shares of
Common Stock in the name of ------------------------------.
EXHIBIT 10.214
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of February 23, 2000, between Pollution Research and Control Corp., a
California corporation (the "Company") and Britannica Associates Limited (the
"Purchaser").
This Agreement is being entered into pursuant to the Debenture, dated as of
the date hereof, issued by the Company in favor of the Purchaser.
The Company and the Purchaser hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(o).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section 3(n).
"Board" shall have the meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Effectiveness Date" means with respect to the Registration Statement
the 180th day following the Closing Date (as that term is defined in the
Purchase Agreement).
"Effectiveness Period" shall have the meaning set forth in Section 2.
<PAGE>
"Event" shall have the meaning set forth in Section 7(e)(i).
"Event Date" shall have the meaning set forth in Section 7(e)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means the 90th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means the Common Stock issuable upon
conversion of the Debenture (the "Common Stock") and the shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any
stock split, stock dividend, recapitalization or similar event with respect to
such Common Stock or Warrant Shares. Notwithstanding anything contained herein
to the contrary, if the actual number of shares of Common Stock issuable upon
exercise of the Warrants exceeds 100% of the number of shares of Common Stock
issuable upon exercise of the Warrants based upon a computation as at the
Closing Date or the Filing Date, the terms "Registrable Securities" shall be
deemed to include such additional shares of Common Stock.
"Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2(a), including (in
each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post- effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement.
<PAGE>
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any special counsel to the Holder, for which
the Holder will be reimbursed by the Company pursuant to Section 4.
2. Shelf Registration.
On or prior to the Filing Date the Company shall prepare and file with
the Commission a "shelf" Registration Statement covering all Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall (i) not permit any securities other than
the Registrable Securities to be included in the Registration Statement and (ii)
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the Effectiveness Date, and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period"). If the Company is notified orally or in writing by the
Commission that the Commission has no comments with respect to the Registration
Statement (the "Commission Notice"), the Company shall use its best efforts to
cause the Registration Statement to be declared effective no later than five (5)
business days after receipt of the Commission Notice. If an additional
Registration Statement is required to be filed because the actual number of
shares of Common Stock into which the Warrants are exercisable exceeds the
number of shares of Common Stock initially registered in respect of the
Conversion Shares and the Warrant Shares based upon the computation on the
Closing Date, the Company shall have twenty (20) Business Days to file such
<PAGE>
additional Registration Statement, and the Company shall use its best efforts to
cause such additional Registration Statement to be declared effective by the
Commission as soon as possible, but in no event later than forth-five (45) days
after filing.
3. Registration Procedures.
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith) in
accordance with the method or methods of distribution thereof as specified by
the Holders (except if otherwise directed by the Holders), and cause the
Registration Statement to become effective and remain effective as provided
herein; provided, however, that not less than five (5) Business Days prior to
the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to the Holders
and any Special Counsel, copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be subject to
the review of such Holders and such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or any Special Counsel shall reasonably object in writing within
three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post- effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
<PAGE>
(c) Notify the Holders of Registrable Securities to be sold and any
Special Counsel as promptly as possible (and, in the case of (i)(A) below, not
less than five (5) Business Days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) Use its best efforts to avoid the issuance of, or if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(f) Furnish to each Holder and any Special Counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
<PAGE>
(g) Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
any Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request at least
two (2) Business Days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(k) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on the Nasdaq Small Cap Market and
any other securities exchange, quotation system, market or over-the-counter
bulletin board, if any, on which similar securities issued by the Company are
then listed as and when required pursuant to the Purchase Agreement.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions os Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
<PAGE>
fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) The Company may require each selling Holder to furnish to the
Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration
Statement, and the Company may exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until Such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend its
obligation under this Section 3(n) for more than 45 days in the aggregate during
any 12 month period (each, a "Blackout Period"); provided, however, that no such
postponement or suspension shall be permitted for consecutive 20 day periods,
arising out of the same set of facts, circumstances or transactions.
<PAGE>
4. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings
required to be made with the Commission, (C) with respect to filings required to
be made under Nasdaq SmallCap Market Rules and (C) in compliance with state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $10,000, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
<PAGE>
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, which information was reasonably relied on by
the Company for use therein or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto. The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated
by this Agreement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party and
shall survive the transfer of the Registrable Securities by the Holders.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in the Registration
Statement or such Prospectus and that such information was reasonably relied
upon by the Company for use in the Registration Statement, such Prospectus or
such form of prospectus or to the extent that such information relates to such
Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus. Notwithstanding anything to the contrary contained herein, the
Holder shall be liable under this Section 5(b) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the
<PAGE>
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within then (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or result of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
<PAGE>
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party, or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable or required to contribute under this Section 5(c) for only that amount as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Rule 144.
As long as any Holder owns Common Stock, Warrants or Warrant Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Holders with true and complete copies
of all such filings. As long as any Holder owns Common Stock, Warrants or
Warrant Shares, if the Company is not required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Holders and make publicly available in accordance with Rule 144(c) promulgated
under the Securities Act annual and quarterly financial statements, together
with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to
have been made under the Exchange Act. The Company further covenants that it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell Common Stock and
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions referred to in the
Purchase Agreement. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.
<PAGE>
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Without limiting the generality
of the foregoing, without the written consent of the Holders of a majority of
the then outstanding Registrable Securities, the Company shall not grant to any
Person the right to request the Company to register any securities of the
Company under the Securities Act unless the right so granted are subject in all
respects to the prior rights in full of the Holders set forth herein, and are
not otherwise in conflict with the provisions of this Agreement, or the
Registration Rights Agreement has been declared effective by the SEC.
(c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto and
the Persons listed on Schedule 7(c) hereto) may include securities of the
Company in the Registration Statement, and the Company shall not after the date
hereof enter into any agreement providing such right to any of its security
holders, unless the right so granted is subject in all respects to the prior
rights in full of the Holders set forth herein, and is not otherwise in conflict
with the provisions of this Agreement.
(d) Piggy-Back Registrations. If at any time when there is not an
effective Registration Statement covering (i) the Shares of Common Stock or (ii)
the Warrant Shares, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each holder of Registrable Securities
written notice of such determination and, if within thirty (30) days after
receipt of such notice, any such holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
the Purchasers), the Company will cause the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the holder, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to
<PAGE>
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 7(d) that are eligible for sale
pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company).
(e) Failure to File Registration Statement and Other Events. The
Company and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Time or if
certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to the
Filing Date, (or is not declared effective by the Commission on or prior to the
Effectiveness Date or in the event an additional Registration Statement is filed
because the actual number of shares of Common Stock into which the Warrants are
exercisable exceeds the number of shares of Common Stock initially registered is
not filed and declared effective within the time periods set forth in Section
2(a)), or (ii) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act
within five (5) Business Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be "reviewed," or not subject to further review, or (iii) the
<PAGE>
Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities at any
time prior to the expiration of the Effectiveness Period, without being
succeeded immediately by a subsequent Registration Statement filed with and
declared effective by the Commission, and such cessation continues for a period
of thirty days after written notice thereof to the Company, or (iv) trading in
the Common Stock shall be suspended or if the Common Stock is delisted from the
Nasdaq SmallCap Market for any reason for more than three Business Days in the
aggregate, and such suspension or delisting continues for a period of fourteen
days after written notice thereof to the Company, or (v) the Company breaches in
a material respect any covenant or other material term or condition to this
Agreement, Purchase Agreement (other than a representation or warranty contained
therein) or any other agreement, document, certificate or other instrument
delivered in connection with the transactions contemplated hereby and thereby,
and such breach continues for a period of thirty days after written notice
thereof to the Company, or (vii) the Company has breached Section 3(n) of this
Agreement (any such failure or breach being referred to as an ("Event"), the
Company shall pay in cash as liquidated damages for such failure and not as a
penalty to each Holder an amount equal to 2% of such Holder's pro rata share of
the purchase price paid by all Holders for all shares of Common Stock purchased
and then outstanding pursuant to the Purchase Agreement for each thirty (30) day
period until the applicable Event has been cured, which shall be pro rated for
such periods less than thirty (30) days (the "Periodic Amount"). Payments to be
made pursuant to this Section 7(e) shall be due and payable in cash immediately
upon demand. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of damages that may be incurred by the Holders if the Registration
Statement is not filed on or prior to the Filing Date or has not been declared
effective by the Commission on or prior to the Effectiveness Date and maintained
in the manner contemplated herein during the Effectiveness Time or if any other
Event as described herein has occurred.
(f) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Registration Rights Agreement or the Purchase Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Registration
Rights Agreement or the Purchase Agreement and to enforce specifically the terms
and provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.
(ii) Each of the Company and the Purchasers (i) hereby
irrevocably submits to the jurisdiction of the United States District Court
sitting in the Southern District of New York for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement or the
Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is improper.
Each of the Company and the Purchasers consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
<PAGE>
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(f) shall affect or limit any right to serve
process in any other manner permitted by law.
(g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each of the Holders. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(h) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern standard time,
on a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to each Holder at its address set forth under its name on Schedule
A attached hereto, or with respect to the Company, addressed to:
Pollution Research and Control Corp.
506 Paula Avenue
Glendale, California 91201
Attention: ____________________
Facsimile: ____________________
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Company shall be sent to
________________________, Attention:____________________, Facsimile
No.:__________________. Copies of notices to any Holder shall be sent to Parker
Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York
10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288.
(i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.
The Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder. Each Purchaser
<PAGE>
(j) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by the Holder to any transferee of such Holder of all
or a portion of the shares of Common Stock or the Registrable Securities if: (i)
the Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement, and (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement. In
addition, each Holder shall have the right to assign its rights hereunder to any
other Person with the prior written consent of the Company, which consent shall
not be unreasonably withheld. The rights to assignment shall apply to the
Holders (and to subsequent) successors and assigns.
(l) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof.
(m) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provision, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
(p) Shares Held by the Company and its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
<PAGE>
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(q) Within two (2) business days after the Registration Statement
which includes the Registrable Securities is ordered effective by the
Commission, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Holders whose Registrable Securities are included in such
Registration Statement) confirmation that the Registration Statemtn has been
declared effective by the Commission in the form attached hereto as Exhibit A.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
POLLUTION RESEARCH AND CONTROL CORP.
By: /s/ Albert E. Gosselin
---------------------------------------
Albert E. Gosselin
President
Britannica Associates Limited
By: /s/ Tony Hurley
--------------------------------------
Tony Hurley
VP/SEC
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:__________________
Re: Pollution Research and Control Corp.
------------------------------------
Ladies and Gentlemen:
We are counsel to Pollution Research and Control Corp., a California
corporation (the "Company"), and have represented the Company in connection with
(i) that certain Debenture (the "Debenture") issued by the Company in favor of
Britannica Associates Limited (the "Holder") which Debenture is convertible into
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common
Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered
into a Registration Rights Agreement with the Holder (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined the Registration Rights
Agreement), including the shares of Common Stock issuable upon exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on _______ __, 1999, the Company filed a Registration Statement on
Form S-3 (File No. 333-____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
By:_______________________________
cc: Britannica Associates Limited
EXHIBIT 10.215
PROMISSORY NOTE
Glendale, California
$75,000.00 January 21, 2000
FOR VALUE RECEIVED, the undersigned, Dasibi China, Inc., a California
corporation (hereinafter referred to as the "Maker"), with its address at 506
Paula Avenue, Glendale, California 91201, agrees and promises to pay to the
order of Britannica Associates, Ltd. (hereinafter referred to as the "Holder"),
at 3rd Floor, Omar Hodge Building, Wickhams, #362, Rhodestown Tortola, British
Virgin Islands, or such other place as the Holder may designate in writing, in
coin or currenty of the United States of America, which at the time of payment
is legal tender for the payment of public and private debts, the principal sum
of seventy five thousand dollars ($75,000), together with interest thereon at
the ten per cent (10%) per annum, from the date herof until maturity, as
hereinafter provided. The principal balance of this Promissory Note (hereinafter
referred to as the "Note"), together with all interest then accrued and unpaid,
shall be due and payable on the date sixty days from the date hereof.
This Note, and the payment hereof, is guaranteed by Pollution Research and
Control Corp., 506 Paula Avenue, Glendale, California 91201, owner of record and
beneficially of all of the issued and outstanding shares of common stock, $.01
par value per share, of the Maker.
The Maker may prepay any part or all of this Note at any time without
penalty. Each payment or pre-payment made by the Maker hereunder shall be
applied first to the payment or rep- payment of accrued and unpaid interest, if
any, due on the unpaid principal balance of this Note and the remainder of each
payment or pre-payment made by the Maker shall be applied to the reduction of
the unpaid principal balance hereof.
If default is made in the payment of this Note, as and when the same is or
becomes due the Holder may, after notice and failure to cure as hereinafter
provided, without additional notice or demand, declare the entire unpaid
principal balance hereof and accrued and unpaid interst, if any, at once due and
payable.
Except as otherwise specifically set out herein, the Maker waives demand
and presentment for payment, notice of non-payment, protest, notice of protest,
notice of acceleration of the indebtedness due hereunder, and agrees that the
time of payments hereof may be extended without notice at any time and from
time-to-time, and for periods of time for a term or terms in excess of the
original term without notice or consideration to, or consent from the Maker
without same constituting a waiver of the Holder's rights under this Note.
If payment is not received by the tenth day after it is due, then the
Holder agrees to give written notice of such to the Maker. If payment is not
received within five days of said notice then the Holder may at his election
accelerate this Note. The Holder may charge a late charge of two per cent (2%)
of the amount of the payment received after the tenth day such payment is due.
<PAGE>
If the entire outstanding principal balance becomes due, the Maker agrees
to pay the Holder's reasonable costs (including reasonable attorney's fees and
court costs) in collecting this Note, including the reasonable costs of
obtaining and enforcing a judgment for any balance due on this Note.
This Note has been executed in the City identified in the heading and
delivered to the Holder at the address stated herein. It is to be performed, in
whole or in part, in the State of California, and the laws of such state shall
govern the validity, construction, enforcement and interpretation of this Note.
Jurisdiction and venue for any action hereunder shall be in the County of the
City identified in the heading.
The Maker represents that it is duly authorized and empowered to enter
into, deliver, perform and be fully bound by all of the terms, provisions and
conditions of this Note. The Maker also represents that the making and delivery
of this Note, and the performance of any agreement or instrument made in
connection herewith, does not conflict with or violate any other agreement to
which the Maker is a party.
No provision of this Note shall require the payment or permit the
collection of interest in excess of the maximum permitted by law, and in the
event of any such excess, neither the Maker nor its successors or assigns shall
be obligated to pay any such excess to the extent that it is more than the
amount permitted by law. If an excess amount is received, charged, collected or
applied as interest, it shall automatically be made so as to reduce the rate to
that permitted by law and any excess interest then received, charged or
collected shall be applied to reduce the amount of any collateral to which the
Holder is entitled.
In the event that any word, phrase, clause, sentence or other provision
hereof shall violate any applicable statute, ordinance or rule of law in any
jurisdiction in which it is used, such provision shall be ineffective to the
extent of such violation without invalidating any other provision hereof.
IN WITNESS HEREOF, this Note is executed on the date and year above
written.
DASIBI CHINA, INC.
By: /s/ Albert E. Gosselin, President
EXHIBIT 10.216
AMENDMENT TO COMPROMISE AND SETTLEMENT AGREEMENT
This Amendment to Compromise and Settlement Agreement (the "Agreement") is
made and entered into on the date entered below by and between Fidelity Funding,
Inc. ("Fidelity") and Pollution Research and Control Corporation ("Pollution
Research"). Fidelity and Pollution Research are referred to herein singularly as
a "Party" and collectively as the "Parties."
WHEREAS, on or about April 7, 1998 Fidelity filed suit in the 44th Judicial
District Court of Dallas County, Texas against Pollution Research in a case
styled Fidelity Funding, Inc. v. Pollution Research and Control Corporation and
numbered 98-02820-B (the "Lawsuit")' and,
WHEREAS, on or about June 22, 1998 a Default Judgment was entered in the
Lawsuit in favor of Fidelity in the amount of $766,708.77 together with
attorneys' fees in the amount of $1,322.50, pre-judgment interest from and after
June 9, 1998 at the per diem rate of $326.42, costs and post-judgment interest
at the rate of 15% per annum (the "Judgment"); and,
WHEREAS, pursuant to a Compromise Settlement and Release Agreement dated as
of August 12, 1999 certain agreements were reached between the Parties regarding
the Judgment and related matters (the "Original Settlement Agreement"); and
WHEREAS, the Parties are desirous of modifying the Original Settlement
Agreement as set forth herein;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties,
Fidelity and Pollution Research agree as follows:
1. Fidelity and Pollution Research agree and acknowledge that Fidelity has
incurred attorneys' fees from and after February 1, 2000 with its Texas and
California counsel in the aggregate amount not to exceed $5,000.00 (the
"Attorneys Fees"), and Pollution Research agrees to pay the Attorneys' Fees.
2. Fidelity and Pollution Research agree and acknowledge that the total
outstanding amount of the Judgment as of March 23, 2000 is $483,949.27 (the
"Judgment Amount"), and that the outstanding portion of the Judgment Amount
shall accrue interest from and after March 23, 2000 at the rate of 15% per
annum. The Judgment Amount and Attorneys' Fees together with any interest
accruing on the Judgment Amount is referred to herein as the "Settlement
Amount".
3. Contemporaneously with the execution of this Agreement and in no event
later than 5:00 p.m. on March 24, 2000, Pollution Research shall pay to Fidelity
the sum of $200,000.00 to be applied to the Settlement Amount as of the date of
receipt.
<PAGE>
4. In consideration for such payment, for a period of 14 days from and
after the date hereof (the "Forbearance Period"), Fidelity shall forbear from
taking any affirmative action to collect and enforce the Judgment including, but
not limited to, execution, levy, garnishment, or attachment. In the event that
the Settlement Sum is not paid in full, immediately upon the expiration of the
Forbearance Period, Fidelity shall be fully entitled to enforce and collect the
unpaid portion of the Judgment and to pursue any and all remedies available to
it under applicable law to collect the unpaid portion of the Judgment and
Attorneys' Fees.
5. Fidelity shall commence efforts to sell the Settlement Consideration
Shares (as that term is defined in the Original Settlement Agreement) and shall
deliver the Settlement Consideration Shares to Fred Ott together with documents
requested by Ott which are necessary to transfer the shares within three days
from the date hereof and in the event that the Settlement Consideration Shares
are sold during the Forbearance Period for an amount sufficient to satisfy the
outstanding balance of the Settlement Amount, any and all sale proceeds
remaining following the satisfaction of the outstanding balance of the
Settlement Amount and any unsold shares comprising the Settlement Consideration
Shares shall be returned to Pollution Research. If, however, the Settlement
Consideration Shares are sold and the proceeds from the sale are insufficient to
satisfy the outstanding balance of the Settlement Amount, Pollution Research
shall pay the shortfall together with any accrued but unpaid interest thereon.
Further, in the event that the Settlement Consideration Shares are sold
following the expiration of the Forbearance Agreement for an amount in excess of
the Settlement Amount, Fidelity shall be entitled to retain any such excess. For
purposes of this Agreement, the sale shall be deemed to be completed upon a
transfer of the shares provided, however, that the proceeds are distributed to
Fidelity within 10 days of such transfer.
6. The Parties expressly agree and acknowledge that the Warrants (as that
term is defined in the Original Settlement Agreement) are expressly excluded
from the Settlement Consideration Shares. Pollution Research hereby agrees that
unless the Warrants are sold by Fidelity prior to such registration, Pollution
Research shall include the shares represented by the Warrants in its next
registration of shares. Pollution Research shall use its best efforts to
register the shares represented by the Warrants as soon as possible, and in any
event shall cause the shares represented by the Warrants to be registered on or
before the sixth month anniversary of this Agreement. Notwithstanding the
foregoing, Fidelity shall have the right but not the obligation to sell the
Warrants at any time during the six month period or thereafter.
7. Upon payment in full of the Settlement Amount, Fidelity shall execute a
release of the Judgment.
8. This Agreement shall be governed by and construed in accordance with the
laws of the state of Texas.
9. All Parties to this Agreement have had the benefit of counsel of their
choice and have been afforded an opportunity to review this Agreement with their
chosen counsel.
<PAGE>
10. This Agreement may be executed in a number of counterparts all of which
together shall for all purposes constitute one agreement, binding on all of the
Parties, notwithstanding that all of the Parties have not signed the same
counterpart, and it shall not be necessary to produce more than one counterpart
of this Agreement for evidentiary purposes.
11. This Agreement may be modified by written instrument only, signed by
all Parties.
SIGNED this 24th day of March, 2000.
FIDELITY FUNDING, INC.
By: /s/ Roger Marshall
POLLUTION RESEARCH AND CONTROL
CORPORATION
By: /s/ Albert E. Gosselin
President
EXHIBIT 10.217
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 87,141 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Phillip T. 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
E
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
<PAGE>
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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.
EXHIBIT 10.218
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 187,858 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Ronald E. Patterson 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
<PAGE>
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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.
EXHIBIT 10.219
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 46,875 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Lee Sion 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 Three Dollars and 10/100 ($3.10) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
<PAGE>
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
---------------------------------------
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
-------------------------------------------
Address:
-------------------------------------------
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.
EXHIBIT 10.220
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Steven Sion 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 Three Dollars and 10/100 ($3.10) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
<PAGE>
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
Address: ---------------------------------------------
---------------------------------------------
EXHIBIT 10.221
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 10,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Patricia Cudd 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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.
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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,
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
<PAGE>
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/S/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
------------------------------------------
Address:
------------------------------------------
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.
EHXIBIT 10.222
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 14,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Alan L. Talesnick 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
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 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
<PAGE>
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.
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /S/ Albert E. Gosselin
----------------------------------------
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
-------------------------------------------
Address:
-------------------------------------------
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.
EXHIBIT 10.223
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 25,000 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, William T. Richey 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
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 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.
<PAGE>
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY: /s/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
-------------------------------------------
Address:
-------------------------------------------
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.
EXHIBIT 10.224
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 33,333 SHARES OF COMMON STOCK OF
POLLUTION RESEARCH AND CONTROL CORP.
FROM MARCH 31, 2000
VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003
This certifies that, Maria Molinsky 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 Four Dollars ($4.00) 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 March 31, 2003, 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.
1.2 "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.
<PAGE>
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 its 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 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
<PAGE>
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, 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
<PAGE>
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 of involuntary dissolution, liquidation, or winding up of the
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
<PAGE>
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.
(a) 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.
(b) The Company shall use its best efforts, on or before October 1, 2000,
to file with the Securities and Exchange Commission (the "SEC"), a registration
statement on the appropriate Form under the Securities Act of 1933, covering the
sale by the Warrant holders in the open market of the shares of Common Stock
issuable upon exercise of the Warrants as well as other shares of the Company's
Common Stock owned by the Warrant holder. The Company also will undertake
reasonable best efforts to cause the registration statement to become effective
with the SEC as soon as possible after its filing. In addition, the Warrant
holder will have piggyback registration rights on any registration statement
filed by the Company (except on Forms S-8, S-4 or other non- applicable forms)
with respect to the shares underlying the Warrants.
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 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.
<PAGE>
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.
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: March 31, 2000 The Company:
POLLUTION RESEARCH AND CONTROL
CORP., a California corporation
BY:/S/ Albert E. Gosselin
Albert E. Gosselin, Jr., President and
Chief Executive Officer
<PAGE>
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)
-------------------------------------------
Address:
-------------------------------------------
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.
EXHIBIT 21
LIST OF SUBSIDIARIES
Dasibi Environmental Corp.
506 Paula Avenue
Glendale, CA 91201
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 214,216
<SECURITIES> 0
<RECEIVABLES> 1,101,690
<ALLOWANCES> 0
<INVENTORY> 1,387,711
<CURRENT-ASSETS> 3,106,416
<PP&E> 410,281
<DEPRECIATION> 207,129
<TOTAL-ASSETS> 5,892,077
<CURRENT-LIABILITIES> 1,760,205
<BONDS> 0
0
0
<COMMON> 7,840,920
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,802,077
<SALES> 7,314,975
<TOTAL-REVENUES> 7,328,475
<CGS> 5,142,575
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 370,106
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 336,675
<INCOME-PRETAX> (1,533,363)
<INCOME-TAX> 2,659,000
<INCOME-CONTINUING> 1,125,637
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,125,637
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
