-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZqC7NCw50LZv49/5lwNzbEtNp6ABST8ycGPF3xiIhSZi9AFVm3ENVqXaRHdpusP qqj7ZhuLD24wz2q9SvcXCA== 0000950150-96-001121.txt : 19961016 0000950150-96-001121.hdr.sgml : 19961016 ACCESSION NUMBER: 0000950150-96-001121 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 42 FILED AS OF DATE: 19961015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLLUTION RESEARCH & CONTROL CORP /CA/ CENTRAL INDEX KEY: 0000763950 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 952746949 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-14133 FILM NUMBER: 96643511 BUSINESS ADDRESS: STREET 1: 506 PAULA AVENUE CITY: GLENDALE STATE: CA ZIP: 91201 BUSINESS PHONE: 8182477601 MAIL ADDRESS: STREET 1: 506 PAULA AVE CITY: GLENDALE STATE: CA ZIP: 91201 FORMER COMPANY: FORMER CONFORMED NAME: DASIBI ENVIRONMENTAL CORP DATE OF NAME CHANGE: 19900529 S-3 1 FORM S-3 1 As filed with the Securities and Exchange Commission on October 15, 1996 Registration No. _________ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------- Pollution Research and Control Corp. ------------------------------------------------------ (Exact name of registrant as specified in its charter) California -------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) 95-2746949 ------------------------------------ (I.R.S. Employer Identification No.) 506 Paula Avenue, Glendale, California 91201 (818) 247-7601 ------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Albert E. Gosselin, Jr. 506 Paula Avenue, Glendale, California 91201 (818) 247-7601 --------------------------------------------------------- (Name, address, including zip code, and telephone number, including area code, of agent for service) Please send copies of all correspondence to: PATRICIA CUDD, ESQ. Patricia Cudd & Associates 50 South Steele Street, Suite #222 Denver, Colorado 80209 Telephone: (303) 394-2197 Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] 1 2
CALCULATION OF REGISTRATION FEE =============================================================================================================== PROPOSED PROPOSED MAXI- TITLE OF EACH MAXIMUM MUM AGGREGATE AMOUNT OF CLASS OF SECURITIES AMOUNT TO OFFERING PRICE OFFERING REGISTRATION TO BE REGISTERED BE REGISTERED PER SHARE (1) PRICE (1) FEE Common Stock, no par value, underlying Options (2,815,500 Options) (2) 1,875,000 $1.25 $2,343,750 $ 808.19 Common Stock, no par value, underlying Warrants (1,365,003 Warrants) (2) 1,365,003 $1.25 $1,706,254 $ 588.36 Common Stock, no par value 1,375,003 $1.25 $1,718,754 $ 592.67 TOTAL 4,615,006 $5,768,758 $1,989.22
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. Pursuant to Rule 457 (c), based upon 1,875,000 shares and 1,365,003 shares of Common Stock underlying Options and Warrants, respectively, 1,375,003 shares of Common Stock being offered by Selling Shareholders and the average of the high and low sales prices of the Common Stock on the NASDAQ SmallCap Market System on September 19, 1996, of $1.25. (2) Issuable upon exercise of the Options or Warrants. Pursuant to Rule 416, the number of shares of Common Stock issuable upon exercise of the Options and Warrants is subject to adjustment in accordance with the anti-dilution provisions of such Options and Warrants. The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. DOCUMENTS INCORPORATED BY REFERENCE: Certain exhibits to this Registration Statement on Form S-3 as set forth in the Exhibit Index located at page 30. 2 3 PROSPECTUS 4,615,006 SHARES OF COMMON STOCK, NO PAR VALUE POLLUTION RESEARCH AND CONTROL CORP. This Prospectus relates to an aggregate of 3,240,003 shares of common stock, no par value per share (the "Common Stock"), underlying the outstanding options (collectively, the "Options") and warrants (collectively, the "Warrants" and, individually, a "Warrant") of Pollution Research and Control Corp. (the "Company") which may be issued upon exercise by the holders of all of the Options and Warrants on or prior to the various expiration dates thereof commencing on June 30, 1997, through January 6, 2002. The Options and the Warrants are exercisable to purchase a total of 1,875,000 shares and 1,365,003 shares of Common Stock, respectively. This Prospectus also relates to a total of 1,375,003 shares of Common Stock; 1,000,003 of which shares were purchased collectively by eleven of the fourteen Warrantholders as part of units (collectively, the "Units" and, individually, a "Unit"), each Unit consisting of one share of Common Stock and one Warrant exercisable to purchase one share of Common Stock, 350,000 of which shares were acquired simultaneously with Warrants by the holder of Warrants exercisable to purchase an aggregate of 300,000 shares of Common Stock and 25,000 of which shares were issued upon the exercise of warrants by a former warrantholder. The holders of Options or Warrants who exercise such Options or Warrants, the Warrantholders who received shares of Common Stock as part of the Units, one Warrantholder who also purchased shares of Common Stock and one shareholder who received shares upon the exercise of warrants previously, are hereinafter collectively referred to as the "Selling Shareholders." Information regarding the Selling Shareholders is set forth in this Prospectus under "Selling Security Holders." Information regarding the holders of the Options and Warrants and the circumstances under which they may exercise their respective Options and Warrants so as to acquire the underlying shares of Common Stock, are set forth herein under "Description of Securities." The Options are exercisable by the holders thereof at prices ranging from $.55 to $1.50 and the Warrants are exercisable by the holders thereof at prices in a range from $1.00 to $2.00. The Options and Warrants were issued by the Company on various dates commencing in May 1991 through September 1996. After the exercise of the Options and the Warrants and with respect to the shares of Common Stock included in the Units and received by two shareholders, one of whom purchased shares of Common Stock and Warrants together and the other of whom exercised his warrants previously, said shares of Common Stock may be offered and sold to the public from time to time by the Selling Shareholders, or by pledgees, donees, transferees or other successors to the Selling Shareholders, in each case in open market transactions, in private or negotiated transactions or in a combination of such methods of sale, at fixed prices, at prices then prevailing on the NASDAQ SmallCap Market System at the time of sale, at prices related to such prevailing market prices or at negotiated prices. To the extent required at the time of a particular offer of Common Stock by the Selling Shareholders, a supplement to this Prospectus will be distributed which will set forth the number of shares of Common Stock being offered and the terms of the offering, including the name or names of any underwriters, dealers, brokers or agents, the purchase price paid by any underwriter for shares of Common Stock purchased from the Selling Shareholders, any discounts, commissions and other items constituting compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or re-allowed to dealers, including the proposed selling price to the public. The Selling Shareholders reserve the sole right to accept and, together with any agent of the Selling Shareholders, to reject in whole or in part any proposed purchase of the shares of Common Stock. The Selling Shareholders will pay any sales commissions or other seller's compensation applicable to such transactions. The Selling Shareholders and agents who execute orders on their behalf may be deemed to be underwriters as that term is defined in Section 2(11) of the Securities Act of 1933, as amended (the "Securities Act"), and a portion of any proceeds of sales and discounts, commissions or other seller's compensation may be deemed to be underwriting compensation for purposes of the Securities Act. (See "Plan of Distribution.") This Prospectus also covers such additional shares of Common Stock as may be issuable to the Selling Shareholders in the event of a stock dividend, stock split, recapitalization or other similar change in the Common Stock. The Company will not receive any of the proceeds from the sale of the shares of Common Stock by the Selling Shareholders. Prior to such sale of 3,240,003 shares of Common Stock, however, the Company will have received up to a maximum of $1,828,800 ($.55 to $1.50 per share) from the exercise of 3 4 the Options and up to a maximum of $1,562,003 ($1.00 to $2.00 per share) from the exercise of the Warrants referred to above. If all of the Options and Warrants are exercised on or before their respective expiration dates on June 30, 1997, through January 6, 2002, the Company would receive gross proceeds aggregating $3,390,803 in cash. The Company has agreed to pay all costs of the registration of the shares of Common Stock underlying the Options and Warrants and otherwise being offered by the Selling Shareholders. Such costs, fees and disbursements are estimated to be approximately $31,075. SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE SHARES OF COMMON STOCK. The Company's Common Stock is traded over-the-counter and is quoted on the NASDAQ SmallCap Market System under the symbol "PRCC." On September 19, 1996, the last sale price of the Common Stock on the NASDAQ SmallCap Market System was $1.25. __________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. __________ The date of this Prospectus is October , 1996. 4 5 TABLE OF CONTENTS
Page ---- Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 5 The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
AVAILABLE INFORMATION The Company is subject to the informational and reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed with the Commission by the Company may be inspected and copied at the public reference facilities maintained by the Commission at its principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of these materials can also be obtained at prescribed rates from the Public Reference Section of the Commission at its principal offices in Washington, D.C., set forth above. Additional information with respect to this offering may be provided in the future by means of supplements or "stickers" to the Prospectus. The Company has filed a Registration Statement on Form S-3 (including all amendments and supplements thereto, the "Registration Statement") with the Commission under the Securities Act with respect to the shares of Common Stock underlying the Options and Warrants and otherwise being offered hereby by the Selling Shareholders. This Prospectus, which forms a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the Exhibits filed therewith, certain parts of which have been omitted in accordance with the rules and regulations of the Commission. Statements contained herein concerning the provisions of such documents are not necessarily complete and, in each instance, reference is made to the Registration Statement or to the copy of such document filed as an Exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. Copies of the Registration Statement and the Exhibits thereto can be obtained upon payment of a fee prescribed by the Commission or may be inspected free of charge at the public reference facilities and regional offices referred to above. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1995, the Company's Quarterly Reports on Form 10-QSB for the quarters ended March 31 and June 30, 1996, and the Current Reports on Form 8-K dated May 31 and June 19, 1996, as amended, which were previously filed with the Commission (File No. 0-14266), are incorporated by reference in this Prospectus and the Registration Statement of which it is a part. 5 6 All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the shares of Common Stock, shall be deemed to be incorporated by reference herein and to be part hereof from the respective dates of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and the Registration Statement of which it is a part to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or the Registration Statement of which it is a part. The Company will furnish without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon the written or verbal request of such person, a copy of any or all of the documents incorporated herein by reference, other than exhibits to such documents. Requests should be addressed to: Secretary, Pollution Research and Control Corp., 506 Paula Avenue, Glendale, California 91201; telephone number (818) 247-7601. THE COMPANY The Company primarily designs, manufactures and markets electronic analytical instruments used to detect and measure various types of air pollution, such as "acid rain," "ozone depletion" and "smog episodes" through its wholly-owned subsidiary, Dasibi Environmental Corp. The Company's products are generally used to measure air pollution levels in geographic areas which range in size from small industrial sites to entire states or countries. The Company also supplies computer-controlled calibration systems that verify the accuracy of its instruments, data loggers to collect and manage pollutant information and final reporting software for remote centralized applications. The Company's instruments have been sold during the past three years to over 300 customers worldwide, including industrial manufacturers; federal, state, city, local and foreign governmental agencies; major industrial companies; and educational and research institutions in over 30 countries. These customers use the Company's products principally for environmental protection compliance programs. The Company intends to continue its sales growth by adapting its existing technologies for new pollution measurement applications and acquiring or developing new related technologies. The Company intends to expand its market share by concentrating a large portion of its marketing efforts in foreign countries, particularly the Peoples' Republic of China. In June 1996, the Company acquired all of the issued and outstanding common stock of two private companies, one of which, Nutek, Inc. ("Nutek"), a Florida corporation, has been engaged in the design, manufacture and marketing of electrical and instrument control panels used in utility plant and pulp and paper mill automation and other industrial process applications for approximately twenty-five years and the other of which, Logan Medical Devices, Inc. ("LMD"), is a start-up Colorado corporation which applies the Company's technology to the design and manufacture of non-invasive medical instrumentation used in asthma diagnostic and treatment applications. Although LMD intends to seek, it does not at this time have, clearance from the U.S. Food and Drug Administration for full-scale marketing of its medical instrumentation in the United States. The Company presently derives approximately 30% and 5% of its total revenue from sales of Nutek's and LMD's products, respectively. The Company's principal executive offices are located at 506 Paula Avenue, Glendale, California 91201, and its telephone number is (818) 247-7601. The Company's Common Stock is traded in the over-the-counter market and reported on the NASDAQ SmallCap Market System under the symbol "PRCC." THE OFFERING Being Offered by Selling Shareholders . . . . . . . . 4,615,006 shares of Common Stock Upon Exercise of the Options . . . . . . . . . . . 1,875,000 shares of Common Stock Upon Exercise of the Warrants . . . . . . . . . . . 1,365,003 shares of Common Stock
6 7 USE OF PROCEEDS The Company will receive no proceeds from the sale of the shares of Common Stock underlying the Options and the Warrants and otherwise being offered by the Selling Shareholders, but will receive proceeds upon the exercise of the Options and Warrants. If all of the outstanding Options and Warrants are exercised at exercise prices in a range from $.55 to $2.00 per Option or Warrant, the proceeds to the Company will be approximately $3,390,803. The Company will use the proceeds from the exercise of the Options and Warrants for the following purposes:
Application Amount Percent ------------------------- ---------- ------- Working Capital $1,390,803 41.0% Research and Development* 1,000,000 29.5% Marketing 1,000,000 29.5% ---------- ------ $3,390,803 100.0%
_________________ *To be used to accelerate two research and development projects, one of which, the development of an innovative continuous emission monitoring system, is in the prototype stage and the other of which involves the development of a flue gas purification system. RISK FACTORS Prospective investors should consider carefully, in addition to the other information contained in and incorporated into this Prospectus and the Registration Statement of which it is a part, the following factors before purchasing the shares of Common Stock offered hereby. 1. Liquidity. The Company has experienced cash shortages from time to time preventing it from paying its operating expenses on a timely basis or forcing management to raise funds from private sources for equity or debt financing or, if available, bank loans. The Company has historically financed operations through bank borrowings and the issuance of Common Stock in both public and private offerings. Working capital, on a consolidated basis, at June 30, 1996, was $2,927,595 for the Company and its wholly-owned subsidiaries, Nutek and LMD, acquired in June 1996. The Company has no sources of financing presently except the proceeds of this offering and its bank line of credit in the amount of $300,000. Any amounts borrowed bear interest at the prime rate plus 2% per annum and are due and owing on June 3, 1997. The sum of $250,000 is outstanding as of the date hereof. While the Company is presently seeking to increase its bank line of credit, there can be no assurance that such an increase can be obtained when and if the Company experiences working capital shortages in the future. The sum of $1,390,803, representing 41.0% of the maximum amount of the proceeds which may be received by the Company upon the exercise of the Options and Warrants by the Selling Shareholders, has been allocated for working capital for general corporate purposes. This funding, which is not assured, will result in the dilution of the equity of existing shareholders upon the issuance of shares of Common Stock to the Selling Shareholders who exercise their Options or Warrants. If additional funding is required, it may not be available upon terms acceptable to the Company and/or the Company may be required to forego a substantial interest in its revenues or further dilute the equity of existing shareholders. 2. Increase in Net Loss and Net Loss Per Share. While the Company's net revenue increased marginally (approximately 7.0%) from $5,128,527 for fiscal 1994 to $5,515,505 for fiscal 1995, the Company's net loss ($(597,318)) and net loss per share ($(.09)) for fiscal 1995 increased 7 8 significantly as compared to the net loss ($(101,737)) and net loss per share ($(.01)) for fiscal 1994. These increases in the Company's net loss were principally attributable to an approximate 7% decrease in gross margin, an approximate 5% increase in selling, general and administrative expenses and the $164,605 loss on the Company's joint venture with LMD. The results of the Company's operations from its primary business of designing, manufacturing and marketing automated continuous monitoring instruments used in the detection and measurement of air pollution and, particularly, the gross margin on its products, continue to be adversely affected by competitive price pressures in the air pollution instrumentation industry. The Company's gross profit margin has continued to decrease from 45% to 41% to 34% of net revenues in each of fiscal years 1993, 1994 and 1995, respectively. In response to these significant, continuous competitive price pressures for the Company's instruments, the Company has been forced to continue its policy of lowering its domestic and foreign bids, thus reducing the profit margin on the bids awarded to the Company. Further, the Company's efforts, commenced in the third quarter of fiscal 1994, to implement certain measures to reduce its operating expenses, suspend major new product development and scale back the improvement or modification of existing technologies have continued in response to these unabated competitive price pressures. Further measures to reduce fixed expenses were implemented by the Company in March 1996 in the form of its participation in the Mexican Maquiladora program, initially, for all production labor associated with the Company's backlog. The Company realized a significant increase in net revenues in the amount of $1,929,848 and net income in the sum of $221,646 for the quarter ended June 30, 1996, as compared to $1,434,302 in net revenues and $19,519 in net income for the quarter ended June 30, 1995, and net revenues in the sum of $3,558,894 and net income in the amount of $480,801 for the six months ended June 30, 1996, as compared to $2,903,344 in net revenues and $155,510 in net income for the six months ended June 30, 1995. Although the Company experienced a significant improvement in revenues and profits in the three- and six-month periods ended June 30, 1996, primarily because of the acquisition of Nutek, there can be no assurance that revenues and profits will not decline in the future. 3. Significant Additional Debt Resulting From Recent Acquisitions of Nutek and LMD; Profitability of Acquisitions Not Assured. Effective as of June 19, 1996, the Company acquired all of the issued and outstanding shares of common stock, $1.00 par value per share, of Nutek, a privately-held Florida corporation, and effective as of June 25, 1996, the Company acquired all of the issued and outstanding shares of common stock, $.01 par value per share, of LMD which, in turn, acquired all of the issued and outstanding one pound ordinary shares of Logan Research Ltd. ("LRL"), a private United Kingdom company limited by shares. The purchase price for Nutek, an approximately twenty-five year old manufacturer of electrical and instrument control panels for utility plant and pulp and paper mill automation and other industrial process control applications, was approximately $1,929,669, approximately $315,184 (inclusive of acquisition costs) of which was paid by the Company in cash, approximately $1,285,069 of which represented asset-based financing based on Nutek's assets by an unaffiliated lender, $150,000 of which was financed by the sellers and the balance of which purchase price was miscellaneous debt incurred or assumed by the Company. Additionally, the Company granted options exercisable to purchase an aggregate of 340,000 shares of Common Stock of the Company at an exercise price minimally above the bid price for the Common Stock on the date of grant, in connection with the acquisition of Nutek. LMD, a Colorado corporation, is essentially a start-up company engaged in the manufacture of medical instrumentation for non-invasive asthma diagnostic applications. The Company's and LMD's acquisitions of LMD and LRL, respectively, involved the payment by the Company of approximately $284,000 in cash (inclusive of acquisition costs), $250,000 of which was received by LMD; LMD's issuance of promissory notes aggregating $300,000 in principal amount to the former shareholders of LRL; and the issuance by the Company of options exercisable to purchase an aggregate of 600,500 shares of the Company's Common Stock in exchange for the shares of common stock of LMD not already owned by the Company. While the Company reported its acquisition of Nutek on the Current Report on Form 8-K, as amended, dated June 19, 1996, the balance sheet and operating results of LMD and LRL were not deemed to be material to the consolidated financial position or operations of the Company. There can be no assurance that the above-described acquisitions by the Company of Nutek and LMD will prove to be profitable or that the Company will be capable of operating the combined entities in a manner so as to ensure timely service of the sizable debt totaling approximately $1,614,485 and $300,000 incurred and/or assumed by the Company and LMD, respectively, in order to effect the business combinations. 4. Reliance on One Product Line; Dependence on Major Types of Customers. Approximately 29% of the Company's revenues are derived from the sale of its line of ozone monitors, a decrease of approximately 16% since the Company's purchase of Nutek and LMD. Any substantial decrease in demand for this product could have a material adverse effect upon the business of the Company. During the fiscal years ended December 31, 1995 and 1994, sales to one and two multi-customer overseas distributors represented 16% and 24% of net sales, respectively. While there has been no significant change in recent years in the percentage of revenue contributed by foreign and domestic government agencies (approximately 45%), foreign distributors (approximately 45%) and industrial companies and research facilities (10%), a significant loss in the number of government agencies, industrial companies or research agencies which typically purchase the Company's instruments could have a material adverse effect on the Company. 5. Risks of New Product Line. As part of its expansion strategy, the Company intends to enter the market for continuous emission monitoring systems ("CEMS"), or air pollution instrumentation systems, although it is extremely competitive and the Company's competitors in such market have substantially greater experience and financial resources than the Company. Until recently, the Company's products were not applicable to the source instrumentation market. However, because of new governmental regulations requiring greater accuracy and dilution conditioning as a standard (reducing pollution concentrations to the parts per billion level) for source instrumentation involving a CEMS, the Company's products are now applicable. The Company is not currently able to offer customers a CEMS because it does not manufacture the additional equipment needed to complete the system. The Company commenced a research and development program in July 1992 for the purpose of developing an innovative CEMS which is currently in the prototype stage of development. The sum of $1,000,000 (29.5%) of the proceeds which may be received by the Company from the exercise by the Selling Shareholders of their Options or Warrants, the receipt of which funding is not assured, has been allocated by the Company for the continuation of the development of an innovative CEMS or any other research and development activities. While the Company does not require EPA approval of any of its instruments in order to complete a CEMS, there can be no assurance that the Company's efforts to enter the CEMS market will be successful. 6. Governmental Approval. The Company must obtain approval by the U.S. Environmental Protection Agency ("EPA") of new air pollution monitoring instruments it produces before such instruments can be sold in the United States. Currently, all air pollution monitoring instruments that the Company sells in the United States have received EPA approval. However, if the Company were to invest in the development of new air pollution monitoring instruments in the future that did not receive approval of the EPA, the Company would not be able to sell such instruments in the United States and such inability could have an adverse effect on the Company's business. With the exception of West Germany, no foreign country requires governmental 8 9 approval of air pollution monitoring instruments. While the Company's ozone and carbon monoxide monitors have received the approval of the West German equivalent of the EPA, the sulfur dioxide monitor is currently being tested. The failure to receive such approval for the Company's other air pollution monitoring instrument(s) would have a material adverse effect on the Company's business efforts in West Germany. The U.S. Food and Drug Administration ("FDA") regulates the development, testing, manufacture and marketing of medical devices, including the non-invasive medical device used in asthma diagnostic and treatment applications presently being manufactured and marketed outside the United States by LMD. Full-scale marketing of this device within the United States therefore must be preceded by clearance from the FDA following successful completion of clinical evaluation programs. Compliance with FDA regulations is expected to consume substantial amounts of time, may be expensive and may preclude LMD from operating profitably or without additional financial assistance from the Company. Further, there can be no assurance that LMD will ultimately be successful in obtaining FDA clearance for its medical instrumentation. 7. Dependence On Legislation and Regulation. The majority of the products developed and manufactured by the Company monitor air pollutants in accordance with standards established generally by federal, state, local and foreign governmental agencies. Changes in legislation or regulations or a relaxation of standards determined by such agencies could adversely affect the market for the Company's products. In 1982 and 1983, the Company experienced a decrease in demand for its products which it attributes to a relaxation in such standards by the federal government. 8. Competition. Management believes that the Company is the smallest competitor in the ambient air pollution instrumentation market. There are other established firms in the same field, both in the United States and in foreign countries, which have substantially greater experience and financial and personnel resources than does the Company. Furthermore, unlike a number of its principal competitors, the Company is presently unable to offer its customers a CEMS. Therefore, it is subject to the effects of better-financed competitors and their research and development efforts, and price discounting. The Company competes on the basis of technical advances in its products and its reputation among customers as a quality provider of products and services and, to a lesser extent, on the basis of price. Although the Company is not aware of any other company that competes with it in all of its product lines, all of its competitors have resources substantially greater than those of the Company. There are also smaller companies that specialize in a limited number of the types of products manufactured by the Company. The Company's primary competitors in the domestic market are Thermo Instrument Systems, Inc. ("Thermo Instrument Systems"), and Monitor Labs, Inc. ("Monitor Labs"). In the foreign market, the Company's primary competitors are Thermo Instrument Systems, Monitor Labs and Kimoto Instruments Co. of Japan. All of the Company's competitors also offer a wider range of equipment, monitoring additional pollutants, than does the Company. Although Nutek has engaged in business for the past approximately twenty-five years prior to its acquisition by the Company in June 1996, the Company expects that Nutek will face intense competition from the numerous well-established, large and mid-sized suppliers of the electrical and instrument control panels and other products, such as electronic and graphic display systems, sheetmetal enclosures and printed circuit boards, which it manufactures. The Company further anticipates that LMD will encounter competition from one or more competitors, any of which are likely to be far better capitalized than LMD, in the event that it succeeds, no assurance of which can be made, in obtaining clearance from the U.S. Food and Drug Administration for its non-invasive medical device used in asthma diagnostic and treatment applications. 9. Technological Obsolescence; Limited Research and Development. The markets served by the Company are characterized by rapid technological advances, downward price pressure in the marketplace as technologies mature, changes in customer requirements and frequent new product enhancements. The Company's business requires substantial ongoing research and development efforts and expenditures, and its future success will depend on its ability to enhance its current products, reduce product costs and develop and introduce new products that keep pace with technological developments in response to evolving customer requirements. The Company's failure to anticipate or respond adequately to technological development or introduction could result in a loss of anticipated future revenues and impair the Company's competitiveness. In the past, the Company has actively engaged in research and development in order to produce new products. A total of 29.5% of the proceeds to be received by the Company upon the exercise of the Options and Warrants, of which there is no assurance, has been allocated for the continuation of the Company's two ongoing research and development projects involving the development of an innovative CEMS and a flue gas purification system. The Company spent only $79,898 of its own funds on research and development, including the foregoing projects, in the six-month period ended June 30, 1996, as compared to $117,983 spent during the identical period in fiscal 1995 (an approximate one-third decrease). Research and development costs were $238,345 in 1995 as compared to $235,953 in 1994. 9 10 10. Risks of Foreign Sales. During the last three fiscal years, foreign sales have represented approximately 55% to 70% of the Company's total revenue and are expected to represent a significant portion of the Company's future sales, including sales of Nutek's and LMD's products. Foreign sales are subject to numerous risks, including political and economic instability in foreign markets, restrictive trade policies of foreign governments, inconsistent product regulation by foreign agencies or governments, the imposition of product tariffs and the burdens of complying with a wide variety of international and U.S. export laws and differing regulatory requirements. To date, the Company's foreign sales have been transacted in U.S. dollars only. To the extent, however, that future foreign sales are transacted in a foreign currency, the Company would be subject to the risk of losses due to foreign currency fluctuations and difficulties associated with accounts receivable collection. 11. Reliance on Certain Suppliers. While the Company manufactures many components and subsystems for use in its products and, with the acquisition of Nutek, the Company will no longer be dependent upon outside sources for printed circuit boards, other components, including packaging materials, integrated circuits, microprocessors and minicomputers, are purchased from unaffiliated suppliers. The Company is generally not dependent upon any one supplier for any raw material or component which it purchases, and currently there are available alternative sources for such raw materials and components. The Company is currently dependent, however, on a limited number of vendors with respect to the availability and quality of certain key instrument components, such as lamps. A vendor's inability to supply these components to the Company in a timely fashion, or to the Company's satisfaction, can affect the Company's ability to deliver its instruments on time. 12. Limited Marketing Capability. The Company's success depends in large part upon its ability to identify and adequately penetrate the markets for its products. As compared to the Company, most of its competitors have much larger budgets for marketing, advertising and promotion. Proceeds in the amount of $1,000,000 (29.5%) from the exercise of Options or Warrants by the Selling Shareholders, the receipt of which cannot be assured, has been allocated for marketing. This amount of additional funding would nevertheless be insufficient to enable the Company to undertake a comprehensive national or foreign marketing and advertising campaign. The Company has historically lacked the financial, personnel and other resources required to compete with its larger, better-financed competitors in marketing its instruments. While the Company expects to realize certain economics of scale in areas such as marketing through its recent acquisitions of Nutek and LMD, management nevertheless anticipates that the results of the operations of Nutek and LMD may also be adversely affected by the Company's limited marketing capability. 13. Dependence on Key Personnel. Management believes that the Company's success depends in part upon its ability to attract and/or retain highly skilled management, technical and marketing personnel. Loss of the services of Albert E. Gosselin, Jr., President, Chief Executive Officer and Chairman of the Board of Directors of the Company, could adversely affect the development of the Company's business and its ability to realize or sustain profitable operations. Further, loss of the services of Ronald Bruce Logan-Sinclair, President and Chief Executive Officer of LMD and LRL, could cause the loss to the Company of the approximately $284,000 paid in June 1996 in connection with the acquisitions of LMD and LRL. However, Mr. Gosselin, together with Cynthia L. Gosselin, the Company's Chief Financial Officer, have employment contracts with the Company and Mr. Logan-Sinclair has an employment agreement with LMD and LRL. The Company does not maintain key-man life insurance on any of its personnel. 14. Limited Protection of Intellectual Property and Proprietary Rights. The Company regards all or portions of the designs and technologies incorporated into its products as proprietary and attempts to protect them with a combination of trademark and trade secret laws, employee and third-party nondisclosure agreements and similar means. It has generally been the Company's policy to proceed without patent protection since it is management's belief that the disclosure requirements of the federal patent laws provide competitors with easy access to the secrets of rapidly changing technology. Despite these precautions, it may be possible for unauthorized third parties to copy certain portions of the Company's products or to "reverse engineer" or otherwise obtain and use to the Company's detriment information which the Company regards as proprietary. Moreover, the laws of some foreign countries do not afford the same protection to the Company's proprietary rights as do U.S. laws. There can be no assurance, therefore, that any of these 10 11 protections will be adequate or that the Company's competitors will not independently develop technologies that are substantially equivalent or superior to the Company's technologies. 15. Absence of Products Liability Insurance. The Company does not maintain products liability insurance since it does not perceive a risk of liability to which it may be exposed. Management has no present intention of modifying this policy despite the recent acquisitions of LMD or LRL because the activities of these companies are presently limited to the manufacture and marketing of a medical device used in non-invasive asthma diagnostic applications which, in any event, will require clearance from the U.S. Food and Drug Administration prior to full-scale commercial marketing within the U.S. The Company has never had a products liability claim; however, in the event that the Company experiences a material liability as a result of a products liability claim, such a liability could have a material adverse effect on the Company. 16. Possible Volatility of Stock Price. The trading price of the Company's Common Stock has from time to time fluctuated widely and in the future may be subject to similar fluctuations in response to quarter-to-quarter variations in the Company's operating results, announcements of technological innovations or new products by the Company or its competitors, general conditions in the air pollution monitoring industry in which the Company competes and other events or factors. In addition, in recent years broad stock market indices, in general, and the securities of technology companies, in particular, have experienced substantial price fluctuations. Such broad market fluctuations also may adversely affect the future trading price of the Common Stock. In addition, sales of substantial amounts of shares of Common Stock in the public market following this offering could adversely affect the future trading price of the Common Stock. (See "MARKET INFORMATION.") 17. Possible Dilutive Effect of Outstanding Warrants and Options. As of the date hereof, there are an aggregate of 3,240,003 shares of Common Stock reserved for issuance upon the exercise of outstanding Options and Warrants currently exercisable at prices in a range from $.55 to $2.00. To the extent that the trading price of the Common Stock at the time of the exercise of any such Options and Warrants exceeds the exercise price, such exercise will have a dilutive effect on the Company's shareholders. In connection with the purchase by Neil C. Sullivan of 350,000 shares of the Company's Common Stock and a warrant exercisable to purchase 300,000 shares of Common stock at an exercise price of $1.00 per share through September 20, 1999 (see "DESCRIPTION OF SECURITIES - Miscellaneous Warrants"), the Company has undertaken to amend this Prospectus, as required, in order to maintain an effective registration statement to cover the offer and sale of the Common Stock issued to Mr. Sullivan or issuable upon the exercise of the Warrant granted to him, during the period of three years from the effective date of the Registration Statement of this Prospectus forms a part. The cost to the Company of maintaining such registration could be substantial and could adversely affect the Company's ability to obtain financing. 18. Dividend Policy. The Company plans to retain earnings for the purpose of expanding business opportunities and does not believe it will pay dividends to its shareholders in the foreseeable future. Investors should refrain from purchasing the shares of Common Stock offered hereby if they anticipate the need for immediate or future income from dividends. (See "DESCRIPTION OF SECURITIES - Capital Stock - Common Stock.") 11 12 PLAN OF DISTRIBUTION The shares of Common Stock may be offered and sold from time to time by the Selling Shareholders or by pledgees, donees, transferees or other successors in interest. The Selling Shareholders will act independently of the Company in making determinations with respect to the timing, manner and size of each offer or sale. Such sales may be made on the over-the-counter market or otherwise at prices and at terms then prevailing or at prices related to the then current market prices, or in negotiated transactions. The Selling Shareholders may sell shares of Common Stock in any of the following ways: (i) through dealers; (ii) through agents; or (iii) directly to one or more purchasers. The distribution of the shares of Common Stock may be effected from time to time in one or more transactions (which may involve crosses or block transactions) in the over-the-counter market. Any such transaction may be effected at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices. The Selling Shareholders may effect such transactions by selling shares of Common Stock to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from Selling Shareholders and/or commissions from purchasers of shares of Common Stock for whom they may act as agent. The Selling Shareholders and any broker-dealers or agents which participate in the distribution of Common Stock by them might be deemed to be underwriters and any discounts, commissions or concessions received by any such broker-dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act. In offering the shares of Common Stock, the Selling Shareholders and any broker-dealers and any other participating broker-dealers which execute sales for the Selling Shareholders may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales, and any profits realized by the Selling Shareholders and the compensation of such broker-dealers may be deemed to be underwriting discounts and commissions. In addition, any shares of Common Stock covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. Rule 10b-2 under the Exchange Act prohibits persons who are participating in or financially interested in a distribution of securities from making payments to another person for the solicitation of a third party to purchase the securities that are the subject of the distribution, except that Rule 10b-2 does not apply, among other exceptions, to brokerage transactions not involving the solicitation of customer orders. Rule 10b-6 under the Exchange Act prohibits participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Rule 10b-7 governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. The public offering of the Common Stock by the Selling Shareholders will terminate on the date on which all shares of Common Stock offered hereby have been sold by the Selling Shareholders, or on such earlier date on which the Company files a post-effective amendment which de-registers all shares of Common Stock then remaining unsold. The Company will pay certain expenses incidental to the offering and sale of the shares of Common Stock to the public estimated to be approximately $31,075. The Company will not pay 12 13 for, among other expenses, selling expenses, underwriting discounts or fees and expenses of counsel for the Selling Shareholders. To the extent required at the time a particular offer of Common Stock by the Selling Shareholders is made, a supplement to this Prospectus will be distributed which will set forth the number of shares of Common Stock being offered and the terms of the offering, including the name or names of any underwriters, dealers, brokers or agents, the purchase price paid by any underwriter for shares of Common Stock purchased from the Selling Shareholders, any discounts, commissions and other items constituting compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or re-allowed to dealers, including the proposed selling price to the public. The Company will not receive any of the proceeds from the sale of shares of Common Stock by the Selling Shareholders. MARKET INFORMATION The Company's Common Stock is traded over-the-counter and reported on the NASDAQ SmallCap Market System under the symbol "PRCC." Set forth below are the high and low closing bid quotations in the over-the-counter market for the Common Stock as reported by the relevant market makers for fiscal years 1995 and 1994 and the quarters ended March 31 and June 30, 1996. The high closing bid quotation (which was identical to the low closing bid quotation) in the over-the-counter market reported by the relevant market makers on September 19, 1996, was $1.25 for the Common Stock. Quotations represent inter-dealer quotations, without adjustment for retail mark-ups, mark-downs or commissions, and may not necessarily represent actual transactions.
Fiscal 1996 Fiscal 1995 Fiscal 1994 Quarter Ended High Bid Low Bid High Bid Low Bid High Bid Low Bid - ------------- ------------------- ------------------- ------------------- Common Stock: March 31 $ .69 $ .62 $ .69 $.62 $2.38 $1.50 June 30 1.67 1.44 .91 .59 1.95 1.25 September 30 1.22 .62 1.25 .75 December 31 .88 .56 .78 .44
As of September 19, 1996, the approximate number of shareholders of record of the Company's Common Stock was 1,100. The Company has never paid or declared any dividends on its Common Stock and does not anticipate paying dividends in the foreseeable future. The Company cannot predict the market price for the Common Stock upon the commencement or the completion of this offering. Since the market for the Company's Common Stock is thinly traded, the exercise of the Warrants and Options and sales of the underlying shares of Common Stock could cause the Common Stock to trade at levels lower than would otherwise be anticipated. 13 14 SELLING SECURITY HOLDERS Of the 4,615,006 shares of Common Stock being offered hereby, 2,000,006 shares of Common Stock, including 1,000,003 shares underlying Warrants exercisable at an exercise price of $1.00 per share through June 14, 1999, are being offered collectively by eleven individuals who purchased Units, each Unit consisting of one share and one Warrant, in the Company's private placement completed in June 1996. An additional 1,300,000 shares of Common Stock underlying options exercisable during the period from January 31, 1997, through May 29, 2000, at exercise prices of $.94 or $1.25 per share may be offered by Liviakis Financial Communications, Inc., an affiliate of one Unitholder, and Robert B. Prag, another Unitholder who serves as an officer of Liviakis Financial Communications, Inc. Of the balance of 1,315,000 shares of Common Stock being offered, (i) 650,000 shares of Common Stock, including 300,000 shares underlying Warrants exercisable through September 20, 1999, at an exercise price of $1.50 per share, are being offered by Neil C. Sullivan; (ii) 465,000 shares of Common Stock underlying options exercisable at exercise prices of $4.55 or $1.10 during exercise periods through May 31, 2000 or May 20, 2001, are being offered collectively by five of the six executive officers and/or directors of the Company, a 7.2% shareholder of the Company and the Company President's mother-in-law; (iii) a total of 75,000 shares of Common Stock underlying three options exercisable at an exercise price of $1.38 per share as to 25,000 shares each through June 30, 1997, 1998 and 1999, respectively, are being offered by Randy Foy, an employee of the Company; (iv) an aggregate of 25,000 shares underlying options exercisable through June 28, 2000, at an exercise price of $.63 per share are being offered by three Company employees, including Kimberly Chiu, Mike Chu and Tolly Smith; and (v) 10,000 shares of Common Stock underlying options exercisable through March 31, 1999, at an exercise price of $.68 per share are being offered by Phil Huss, a Company consultant. The balance of a total of 90,000 shares of Common Stock being offered, including 60,000 shares underlying Warrants exercisable on or prior to August 31, 1998, at an exercise price of $1.70 per share may be offered by The Equity Group, Inc., 5,000 shares of Common Stock underlying Warrants exercisable at an exercise price of $2.00 per share through November 7, 1998, may be offered by Edward G. Lowell and 25,000 shares are being offered by Michael Young, a shareholder who exercised his Warrants previously. The Company will not receive any of the proceeds of the offering of such shares of Common Stock by Selling Shareholders; however, the Company will have received proceeds of up to a maximum of $3,390,803 from the exercise of all of the Options and Warrants prior to the sale of an aggregate of 3,240,003 underlying shares of Common Stock. The table below indicates the name of each Selling Shareholder, any material relationship he or she has had to the Company within the last three years, the number and percentage of shares of Common Stock owned by the Selling Shareholder prior to this offering, the number of shares being offered for sale by the shareholder and the number of shares of Common Stock and the percentage of the total shares of Common Stock outstanding that will be held if all shares offered are sold. (See "Description of Securities - Options" and "- Private Placement Warrants" and "Miscellaneous Warrants.")
Shares Shares Owned Shares Owned Relationship Prior to Being After Selling Shareholders to Company Offering Per Cent Offered Offering Per Cent - -------------------- ---------- -------- -------- ------- -------- -------- Private Placement Warrantholders - -------------- John Ann Hochkiss . . . . . 583,334(1) 6.6 583,334 -0- -0- David Firestone . . . . . . 333,334(1) 3.8 333,334 -0- -0- Irawan Onggara . . . . . . 333,334(1) 3.8 333,334 -0- -0- John M. Liviakis . . . . . 133,335(1)(2) 1.5 133,334 -0- -0-
14 15
Shares Shares Owned Shares Owned Relationship Prior to Being After Selling Shareholders to Company Offering Per Cent Offered Offering Per Cent - -------------------- ---------- -------- -------- ------- -------- -------- Robert B. Prag . . . . . . 133,334(1)(3) 1.5 133,334 -0- -0- Robert S. London . . . . . 133,334(1) 1.5 133,334 -0- -0- Shawn Cady . . . . . . . . 83,334(1) * 83,834 -0- -0- Donald Carstens . . . . . . 83,334(1) * 83,334 -0- -0- Ling Nen Chuan . . . . . . 83,334(1) * 83,334 -0- -0- Sanibel Capital Corporation 83,334(1) * 83,334 -0- -0 Donna Sizemore . . . . . . 16,666(1) * 16,666 -0- -0- Michael Young . . . . . . . 25,000 * 25,000 -0- -0- Miscellaneous Warrantholders - -------------- Neil C. Sullivan . . . . . 650,000(4) 7.3 650,000 -0- -0- The Equity Group, Inc. . . 60,000(5) * 60,000 -0- -0- Edward G. Lowell . . . . . 5,000(6) * 5,000 -0- -0- Optionholders - ------------- Albert E. Gosselin, Jr. . . President, Chief Executive 551,335(7) 6.3 170,000 381,335 3.2 Officer, Chairman of the Board of Directors, Director Gary L. Dudley . . . . . . Director 85,000(8) * 85,000 -0- -0- Lee N. Sion . . . . . . . . 619,000(9) 7.2 50,000 569,000 4.8 Craig E. Gosselin . . . . . Director 45,000(10) * 40,000 5,000 * Cynthia L. Gosselin . . . . Chief Financial Officer 96,305(10) * 40,000 56,305 * Marcia A. Snith . . . . . . Director 101,280(10) 1.2 40,000 61,280 * Margaret Jones . . . . . . 40,000(10) * 40,000 -0- -0- Randy Foy . . . . . . . . . 75,000(11) * 75,000 -0- -0- Kimberly Chiu . . . . . . . 10,000(12) * 10,000 -0- -0- Mike Chu . . . . . . . . . 10,000(12) * 10,000 -0- -0- Phil Huss . . . . . . . . . 10,000(13) * 10,000 -0- -0- Tolly Smith . . . . . . . . 5,000(12) * 5,000 -0- -0-
- --------------- * Indicates ownership of less than one per cent. (1) Fifty per cent of the number of shares of Common Stock shown represents shares underlying Warrants exercisable to purchase one share each through June 14, 1999, at an exercise price of $1.00 per share included in Units, each Unit consisting of one Warrant and one share of Common Stock, purchased by the eleven individuals named in the Company's private placement completed in June 1996. (See "Description of Securities - Private Placement Warrants.") (2) Does not include 750,000 shares and 225,000 shares of Common Stock underlying Warrants exercisable at per share exercise prices of $.94 and $1.25, respectively, during the period from January 31, 1997, through May 29, 2000, granted to Liviakis Financial Communications, Inc., pursuant to the Consulting 15 16 Agreement, as amended, between the Company and Liviakis Financial Communications, Inc. (See "Description of Securities - Options") (3) Does not include 250,000 shares and 75,000 shares of Common Stock underlying Warrants exercisable at per share exercise prices of $.94 and $1.25, respectively, during the period from January 31, 1997, through May 29, 2000, granted to Robert B. Prag, Senior Vice President of Liviakis Financial Communications, Inc., pursuant to the Consulting Agreement, as amended, between the Company and Liviakis Financial Communications, Inc. (See "Description of Securities - Options") (4) Includes 300,000 shares of Common Stock underlying Warrants exercisable at an exercise price of $1.50 per share through September 20, 1999, issued to Neil C. Sullivan together with 350,000 shares of the Company's Common Stock, pursuant to the letter agreement dated September 20, 1996. (See "Description of Securities - Miscellaneous Warrants.") (5) Represents 60,000 shares underlying Warrants exercisable on or prior to August 31, 1998, at an exercise price of $1.70 per share. (See "Description of Securities - Miscellaneous Warrants.") (6) Represents 5,000 shares of Common Stock underlying Warrants exercisable at an exercise price of $2.00 per share through November 7, 1998. (See "Description of Securities - Miscellaneous Warrants.") (7) Includes 50,000 shares of Common Stock underlying options exercisable at an exercise price of $.55 par share through May 28, 2001, and 120,000 shares underlying options exercisable through January 6, 2002, at an exercise price of $1.10 per share; does not include 123,000 shares underlying options exercisable during the four-year period commencing January 7, 1998, through January 6, 2002, at an exercise price of $1.10 per share, granted in connection with the Company's agreement to acquire the common stock of LMD which it did not already own or any of the shares of Common Stock beneficially owned by Mr. Gosselin's adult children, including Cynthia L. and Craig E. Gosselin, as to which he and his wife disclaim beneficial ownership. (See "Description of Securities - Options.") Albert E. Gosselin, Jr., and his wife, Barbara L. Gosselin, Secretary and a director of the Company, hold their shares of the Company's Common Stock as community property and exercise joint voting and investment power with respect to such shares. (8) Includes 45,000 shares of Common Stock underlying options exercisable through May 28, 2001, at an exercise price of $.55 per share and 40,000 shares underlying options exercisable on or prior to January 6, 2002, at an exercise price of $1.10 per share; does not include 20,000 shares underlying options exercisable during the period commencing January 7, 1998, through January 6, 2002, at an exercise price of $1.10 per share granted in connection with the Company's agreement to acquire certain shares of common stock of LMD. (See "Description of Securities - Options.") (9) Includes 50,000 shares of Common Stock underlying options exercisable at an exercise price of $.55 per share on or prior to May 28, 2001; does not include 37,500 shares underlying options, granted in connection with the Company's agreement to acquire certain shares of common stock of LMD, exercisable during the period of four years commencing January 7, 1998, through January 6, 2002, at an exercise price of $1.10 per share. (See "Description of Securities - Options.") 16 17 (10) Includes 40,000 shares underlying options exercisable through May 31, 2000, at an exercise price of $1.10 per share; does not include 20,000 shares underlying options exercisable at an exercise price of $1.10 per share during the period commencing January 7, 1998, through January 6, 2002. (See "Description of Securities - Options.") (11) Represents shares underlying three options to purchase an aggregate of 75,000 shares of the Company's Common Stock at an exercise price of $1.38 per share exercisable as to 25,000 shares each through June 30, 1997, 1998 and 1999, respectively, by Randy Foy, an employee of the Company. (See "Description of Securities - Options.") (12) Represents shares underlying options exercisable through June 28, 2000, at an exercise price of $.63 per share by a Company employee. (13) Represents shares of Common Stock underlying options exercisable at an exercise price of $.68 per share through March 31, 1999, by Phil Huss, a Company consultant. 17 18 DESCRIPTION OF SECURITIES Capital Stock The Company's authorized capital stock consists of 30,000,000 shares of Common Stock, no par value per share (the "Common Stock"), and 20,000,000 shares of preferred stock, $.01 par value per share (the "Preferred Stock"). Common Stock. All shares of Common Stock have equal voting rights and, when validly issued and outstanding, are entitled to one vote per share in all matters to be voted upon by shareholders. The shares of Common Stock have no preemptive, subscription, conversion or redemption rights and may be issued only as fully-paid and nonassessable shares of Common Stock. Cumulative voting in the election of directors is permitted; however, cumulative voting may occur only if a shareholder announces his intention to cumulate his votes prior to the voting, in which case all shareholders may cumulate their votes. In the event of liquidation of the Company, each shareholder is entitled to receive a proportionate share of the Company's assets available for distribution to shareholders after the payment of liabilities and after distribution in full of preferential amounts, if any, to be distributed to holders of the preferred stock. All shares of the Company's Common Stock issued and outstanding are fully-paid and nonassessable. Holders of the shares of Common Stock are entitled to share pro rata in dividends and distributions with respect to the Common Stock, as may be declared by the Board of Directors out of funds legally available therefor. As of September 19, 1996, there were 8,524,565 shares of Common Stock issued and outstanding held of record by 1,100 shareholders. The Common Stock is traded over-the-counter and reported on the NASDAQ SmallCap Market System under the symbol "PRCC." Holders of shares of Common Stock are entitled to share pro rata in dividends and distributions with respect to the Common Stock when, as and if declared by the Board of Directors out of funds legally available therefor. The Company has not paid any dividends on its Common Stock and currently intends to retain earnings, if any, to finance the development and expansion of its business. Future dividend policy is subject to the discretion of the Board of Directors and will depend upon a number of factors, including future earnings, capital requirements and the financial condition of the Company. Preferred Stock Shares of Preferred Stock may be issued from time to time in one or more series as may be determined by the Board of Directors. The voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions thereof shall be established by the Board of Directors, except that no holder of Preferred Stock shall have preemptive rights. The Company has no outstanding Preferred Stock, and the Board of Directors does not plan to issue any for the foreseeable future unless the issuance thereof shall be in the best interests of the Company. 18 19 Options On May 28, 1991, the Company granted options exercisable on or prior to May 28, 2001, to purchase an aggregate of 145,000 shares of Common Stock at an exercise price of $.55 per share to the following individuals, as follows: (i) Lee Sion - 50,000 shares; (ii) Albert E. Gosselin, Jr. - 50,000 shares; and (iii) Gary Dudley - 45,000 shares. Mr. Sion and Mr. Gosselin, together with his wife, are the record owners of approximately 7.2% and 6.3% (including the aforementioned options), respectively, of the issued and outstanding shares of the Company's Common Stock and Messrs. Gosselin and Dudley are executive officers and/or directors of the Company. The terms and conditions of the options are more fully described in the Stock Option Agreements dated May 28, 1991, with the respective optionees named hereinabove, copies of which are incorporated herein by reference to Exhibits 10.13 through 10.15 to the Company's Transition Report on Form 10-K for the transition period ended June 30, 1991. The foregoing brief description of certain provisions of the options is qualified in its entirety by the more detailed provisions of the Stock Option Agreements. On June 29, 1995, the Company granted options exercisable on or prior to June 28, 2000, to purchase an aggregate of 185,000 shares of Common Stock at an exercise price of $.63 per share to the following individuals, as follows: (i) Albert E. Gosselin, Jr. - 40,000 shares; (ii) Cynthia L. Gosselin - 20,000 shares; (iii) Barbara L. Gosselin - 20,000 shares; (iv) Gary L. Dudley - 20,000 shares; (v) Marcia Smith - 20,000 shares; (vi) Craig E. Gosselin - 20,000 shares; (vii) Keith Gosselin - 20,000 shares; (viii) Mike Chu - 10,000 shares; (ix) Kimberly Chiu - 10,000 shares; and (x) Tolly Smith - 5,000 shares. Mr. Craig E. Gosselin and Mesdames Cynthia L. Gosselin, Barbara L. Gosselin and Marcia Smith, in addition to Messrs. Albert E. Gosselin, Jr., and Gary L. Dudley, are all executive offices and/or directors of the Company. Messrs. Keith Gosselin, Chu and Smith and Ms. Chiu are all employees of the Company. On May 31, 1996, the Company cancelled all of the above-described options except for the options granted to Messrs. Chu and Smith and Ms. Chiu. The terms and conditions of the options granted to the aforementioned Company employees, which were not cancelled, are more fully described in the Option Agreements dated June 29, 1995, with Messrs. Chiu and Smith and Ms. Chiu; copies of which are incorporated herein by reference to Exhibits 4.47 through 4.49 to the Company's Registration Statement on Form S-3 (Registration No. 33-60035) filed June 7, 1995. 19 20 The Company has three options outstanding exercisable by Randy Foy, an employee of the Company, at an exercise price of $1.38 per share, to purchase an aggregate of 75,000 shares of Common Stock of the Company. The options, each of which is exercisable to purchase 25,000 shares of Common Stock, expire on June 30, 1997, 1998 and 1999, respectively. The foregoing brief description of these options is qualified in its entirety by reference to the more detailed provisions of each Option and/or Option Agreement, dated as of July 1, 1994, 1995 and 1996, respectively, copies of which are incorporated herein by reference to Exhibits 4.37 and 4.50 to the Company's Registration Statement on Form S-3 (Registration No. 33-60035) filed June 7, 1995, and Exhibit 4.47 to the Registration Statement on Form S-3 of which this Prospectus forms a part. The Company granted an option to Phil Huss on April 1, 1996, exercisable to purchase an aggregate of 10,000 shares of the Company's Common Stock on or prior to March 31, 1999, at an exercise price of $.68 per share. The foregoing brief description of certain provisions of the option is qualified in its entirety by the more detailed provisions of the Option to Purchase 10,000 shares of Common Stock of Pollution Research and Control Corp. and the Option Agreement, copies of which are incorporated herein by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 of which this Prospectus is a part. Effective as of May 30, 1996, the Company entered into the Consulting Agreement, as amended, with Liviakis Financial Communications, Inc., pursuant to which it has granted options to Liviakis Financial Communications, Inc., and Robert B. Prag, Senior Vice President of Liviakis Financial Communications, Inc., exercisable to purchase an aggregate of 1,300,000 shares of the Company's Common Stock during the period from January 31, 1997, through May 29, 2000. Of these options, Liviakis Financial Communications, Inc., holds options exercisable to purchase an aggregate of 750,000 shares, and 225,000 shares, of Common Stock at exercise prices of $.94 and $1.25, respectively, and Mr. Prag holds options exercisable to purchase 250,000 shares and 75,000 shares at exercise prices of $.94 and $1.25, respectively. The terms and conditions of these options are more fully described in the Consulting Agreement, Amendment and Second Amendment to Consulting Agreement, Non-Qualified Stock Option Agreements and Amendments to Non-Qualified Stock Option Agreements, copies of which are incorporated herein by reference to Exhibits 4.12 through 4.18 to this Registration Statement on Form S-3. The more detailed provisions of these agreements and amendments qualify the foregoing brief description of these options in its entirety. 20 21 Effective as of June 1, 1996, the Company granted options exercisable at an exercise price of $1.10 per share through May 31, 2000, to purchase an aggregate of 320,000 shares of its Common Stock to five of the six executive officers and/or directors of the Company and Margaret Jones, the mother-in-law of the Company's President, as follows: (i) Albert E. Gosselin, Jr. - 120,000 shares; (ii) Gary L. Dudley - 40,000 shares; (iii) Craig E. Gosselin - 40,000 shares; (iv) Cynthia L. Gosselin - 40,000 shares; (v) Marcia A. Smith - 40,000 shares; and (vi) Margaret Jones - 40,000 shares. Albert E. Gosselin, Jr., and Cynthia L. Gosselin are executive officers and directors of the Company and Gary L. Dudley, Marcia A. Smith and Craig E. Gosselin are Company directors. The terms and conditions of the options are more fully described in the Options and Option Agreements, dated as of June 1, 1996, with the respective optionees named in this paragraph above, copies of which are incorporated herein by reference to Exhibits 4.19 through 4.24 to the Registration Statement of which this Prospectus forms a part. The more detailed provisions of said Options and Option Agreements qualify in its entirety the foregoing brief description of certain provisions thereof. 21 22 Private Placement Warrants On or about June 15, 1996, the Company completed a private placement to a total of eleven purchasers of an aggregate of 1,000,003 Units, each Unit consisting of one share of Common Stock and one Warrant exercisable to purchase one share of Common Stock at an exercise price of $1.00 per share, during the three year period from June 14, 1996, through June 14, 1999. The seven holders of the Warrants, together with the number of shares of the Company's Common Stock issuable upon the exercise of each Warrant, include the following: (i) John Ann Hotchkiss - 291,667 shares; (ii) David Firestone - 166,667 shares; (iii) Irawan Onggara - 166,667; (iv) John M. Liviakis - 66,667 shares; (v) Robert S. London - 66,667 shares; (vi) Robert B. Prag - 66,667 shares; (vii) Shawn Cady - 41,667 shares; (viii) Donald Carstens - 41,667 shares; (ix) Ling Nen Chuan - 41,667 shares; (x) Sanibel Capital Corporation - 41,667; and (xi) Donna Sizemore - 8,333 shares. The following description of the Warrants is a brief summary of certain provisions of the Warrants and is qualified in its entirety by the more detailed provisions of the Warrant Agreements and Warrants to Purchase Shares of Common Stock of Pollution Research and Control Corp., copies of which are incorporated herein by reference to Exhibits 4.25 through 4.46 to the Form S-3 Registration Statement of which this Prospectus is a part. The Warrants provide that the shares of Common Stock, when issued upon the exercise of the Warrants in accordance with the terms thereof, will be fully-paid and nonassessable. The Warrants contain provisions that protect the holders thereof against dilution by adjustment, among other things, of the exercise price and/or the number of shares of Common Stock and/or other securities or property issuable upon exercise of the Warrants upon the occurrence of certain events, such as a stock or other dividend or distribution, stock split, subdivision or combination, capital reorganization or reclassification or merger, consolidation or sale of the Company's assets 22 23 substantially as an entirety. The holder of a Warrant will not possess any rights as a shareholder of the Company unless and until he exercises his Warrant. Miscellaneous Warrants The Company, on September 20, 1996, sold 350,000 shares of Common Stock and a Warrant exercisable over a period of three years through September 20, 1999, to purchase an aggregate of 300,000 shares of the Company's Common Stock at an exercise price of $1.00 per share, to Neil C. Sullivan. Except for the foregoing, the terms and conditions of the Warrant granted to Mr. Sullivan are identical to those of the Warrants included in the Company's June 1996 private placement of Units, a brief summary of certain provisions of which is set forth under "Description of Securities - Private Placement Warrants" immediately hereinabove. In connection with the sale of the Common Stock and the Warrant to Mr. Sullivan, the Company agreed to an undertaking to amend this Prospectus, as required, in order to maintain an effective registration statement to cover the offer and sale of any of the shares of Common Stock received by him or any shares issued upon the exercise of the Warrant granted to him for a period of three years from the effective date of the Registration Statement of which this Prospectus forms a part. The provisions of Mr. Sullivan's Warrant are set forth in their entirety in the letter agreement and Warrant to Purchase Shares of Common Stock of Pollution Research and Control Corp., copies of which are incorporated herein by reference to Exhibits 4.48 and 4.49 to the Form S-3 Registration Statement of which this Prospectus is a part. The foregoing brief description of Mr. Sullivan's Warrant is qualified in its entirety by the more detailed provisions of the letter agreement and Warrant. On August 31, 1993, the Company granted to The Equity Group Inc., a public relations firm, a warrant exercisable on or prior to August 31, 1998, to purchase 60,000 shares of the Company's Common Stock at an exercise price of $1.70 per share. On November 8, 1993, the Company granted a warrant exercisable on or prior to November 7, 1998, to purchase 5,000 shares of the Company's Common stock at an exercise price of $2.00 per share, to Mr. Edward G. Lowell. The brief descriptions of certain provisions of the warrants set forth hereinabove are qualified in their entirety by the more detailed provisions of the warrants, copies of which are incorporated herein by reference to Exhibits 4.29 and 4.36 to the Company's Registration Statement on Form S-3 (Registration No. 33-60035) filed June 7, 1995. Transfer Agent, Registrar and Warrant Agent OTR, Inc., 1130 Southwest Morrison, Suite #250, Portland, Oregon 97205, is the Transfer Agent and Registrar for the Common Stock and the Warrant Agent for the Warrants. LEGAL MATTERS Certain legal matters in connection with the validity of the issuance of the shares of Common Stock being offered hereby will be passed upon for the Company by Patricia Cudd & Associates, 50 South Steele Street, Suite #222, Denver, Colorado 80209. Patricia Cudd, Esq., sole proprietor of Patricia Cudd & Associates, owns options exercisable to purchase a total of 40,000 shares of the Company's Common Stock at an exercise price of $1.10 per share during the period of four years from January 7, 1998, through January 6, 2002. The shares of Common Stock underlying Ms. Cudd's options are not included in the shares of Common Stock covered by the Registration Statement of which this Prospectus forms a part. EXPERTS The financial statements of the Company are incorporated herein by reference to the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1995. Such financial statements have been audited by Greenberg & Jackson, an Accountancy Corporation, independent auditors, as stated in their report which is incorporated herein by reference. 23 24 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following is an itemized statement of the expenses incurred in connection with this Registration Statement and the issuance and distribution of the shares of Common Stock being registered hereby. All such expenses will be paid by the Company. Securities and Exchange Commission registration fee . . . . . . $ 2,384 NASD fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,191 Legal fees and expenses . . . . . . . . . . . . . . . . . . . . $12,500 Accounting fees and expenses . . . . . . . . . . . . . . . . . . $ 3,000 Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . $ 4,000 Transfer agent fees and expenses . . . . . . . . . . . . . . . . $ 3,000 Printing, electronic filing and engraving expenses . . . . . . . $ 3,000 Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . $ 2,000 ------- TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,075
All of the above items except the Securities and Exchange Commission registration and NASD fees are estimates. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company's Articles of Incorporation, as amended, provide for (i) the elimination of directors' liability for monetary damages for certain breaches of their fiduciary duties to the Company and its shareholders as permitted by California law; and (ii) permit the indemnification by the Company to the fullest extent under California law. At present, there is no pending litigation or proceeding involving a director or officer of the Company as to which indemnification is being sought. Section 317 of the California Corporations Code, as amended, provides for the indemnification of the officers, directors and controlling persons of a corporation as follows: "(a) For the purposes of this section, "agent" means any person who is or was a director officer, employee or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes without limitation attorneys' fees and any expenses of establishing a right to indemnification under subdivision (d) or paragraph (3) of subdivision (e). (b) A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor, an action brought under Section 9243, or an action brought by the Attorney General pursuant to Section 9230) by reason of the fact that such person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such 24 25 person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person believed to be in the best interests of the corporation or that the person had reasonable cause to believe that the person's conduct was unlawful. (c) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the corporation, or brought under Section 9243, or brought by the Attorney General pursuant to Section 9230, to procure a judgment in its favor by reason of the fact that such person is or was an agent of the corporation, against expenses actually and reasonably incurred by such person in connection with the defense or settlement of such action if the person acted in good faith, in a manner in which such person believed to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinary prudent person in a like position would use under similar circumstances. No indemnification shall be made under this subdivision: (1) In respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation in the performance of such person's duty to the corporation, unless and only to the extent that the court in which such proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the expenses which such court shall determine; (2) Of amounts paid in settling or otherwise disposing of a threatened or pending action, with or without court approval; or (3) Of expenses incurred in defending a threatened or pending action which is settled or otherwise disposed of without court approval unless it is settled with the approval of the Attorney General. (d) To the extent that an agent of a corporation has been successful on the merits in defense of any proceeding referred to in subdivision (b) or (c) or in defense of any claim, issue or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. (e) Except as provided in subdivision (d), any indemnification under this section shall be made by the corporation only if authorized in the specific case, upon a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in either subdivision (b) or (c) by: (1) A majority vote of a quorum consisting of directors who are not parties to such proceedings; (2) Approval of the members (Section 5034), with the persons to be indemnified not being entitled to vote thereon; or (3) The court in which such proceeding is or was pending upon application made by the corporation or the agent or the attorney or other person rendering services in connection with the defense, whether or not such application by the agent, attorney or other person is approved by the corporation. (f) Expenses incurred in defending any proceeding may be advanced by the corporation prior to the final disposition of such proceeding upon receipt of an undertaking by or 25 26 on behalf of the agent to repay such amount unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in this section. (g) No provision made by a corporation to indemnify its or its subsidiary's directors or officers for the defense of any proceeding, whether contained in the articles, bylaws, a resolution of members or directors, an agreement or otherwise, shall be valid unless consistent with this section. Nothing contained in this section shall affect any right to indemnification to which persons other than such directors and officers may be entitled by contract or otherwise. (h) No indemnification or advance shall be made under this section, except as provided in subdivision (d) or paragraph (3) of subdivision (e), in any circumstances where it appears that: (1) It would be inconsistent with a provision of the articles, bylaws, a resolution of the members or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (2) It would be inconsistent with any condition expressly imposed by a court in approving a settlement. (i) A corporation shall have power to purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such whether or not the corporation would have the power to indemnify the agent against such liability under the provisions of this section; provided, however, that a corporation shall have no power to purchase and maintain such insurance to indemnify any agent of the corporation for a violation of Section 9243. (j) This section does not apply to any proceeding against any trustee, investment manager or other fiduciary of an employee benefit plan in such person's capacity as such, even though such person may also be an agent as defined in subdivision (a) of the employer corporation. A corporation shall have power to indemnify such trustee, investment manager or other fiduciary to the extent permitted by subdivision (f) or Section 207." ITEM 16. EXHIBITS. The Exhibit Index commences on page 26. ITEM 17. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; 26 27 (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. 27 28 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Glendale, State of California, on September 24, 1996. Date: September 24, 1996 POLLUTION RESEARCH AND CONTROL CORP. By: /s/ Albert E. Gosselin, Jr. ---------------------------------- Albert E. Gosselin, Jr., President, Chief Executive Officer and Chairman of the Board of Directors POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Albert E. Gosselin, Jr., and Cynthia L. Gosselin, or either one of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Date: September 24, 1996 /s/ Albert E. Gosselin, Jr. -------------------------------------------- Albert E. Gosselin, Jr., President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) Date: September 24, 1996 /s/ Cynthia L. Gosselin -------------------------------------------- Cynthia L. Gosselin, Chief Financial Officer (Principal Financial and Accounting Officer) Date: September 24, 1996 /s/ Barbara L. Gosselin -------------------------------------------- Barbara L. Gosselin, Director
28 29 Date: September 24, 1996 /s/ Gary L. Dudley -------------------------------------- Gary L. Dudley, Director Date: September 24, 1996 /s/ Marcia Smith -------------------------------------- Marcia Smith, Director Date: September 24, 1996 /s/ Craig E. Gosselin ------------------------------------- Craig E. Gosselin, Director 29 30 EXHIBIT INDEX The following Exhibits are filed as part of this Registration Statement on Form S-3 or are incorporated herein by reference.
ITEM NUMBER DESCRIPTION - ------ --------------------------------------------------------------- 4.1* Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 10.14 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.) 4.2* Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Albert E. Gosselin, Jr. (Incorporated herein by reference to Exhibit 10.15 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.) 4.3* Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Gary L. Dudley. (Incorporated herein by reference to Exhibit 10.13 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.)
30 31 32 4.4* Pollution Control and Research Corp. Common Stock Purchase Warrant for the Purchase of 60,000 Shares of The Equity Group Inc. dated August 31, 1993. (Incorporated herein by reference to Exhibit 4.29 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.) 4.5* Warrant to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. of Edward G. Lowell dated November 8, 1993. (Incorporated herein by reference to Exhibit 4.36 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.)
31 33 4.6* Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. of Randy Foy dated as of July 4, 1994. (Incorporated herein by reference to Exhibit 4.37 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.) 4.7* Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. of Mike Chu dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.47 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.) 4.8* Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. of Kimberly Chiu dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.48 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.) 4.9* Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. of Tolly Smith dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.49 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.) 4.10* Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. of Randy Foy dated as of July 1, 1995. (Incorporated herein by reference to Exhibit 4.50 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., filed June 7, 1995.)
32 34 4.11 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Phil Huss; Option Agreement, dated as of April 1, 1996, between Pollution Research and Control Corp. and Phil Huss. 4.12 Consulting Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. 4.13 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. 4.14 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Robert B. Prag. 4.15 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. 4.16 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996, between Pollution Research and Control Corp. and Robert B. Prag. 4.17 Amendment to Consulting Agreement dated 5/30/96 between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc., dated July 31, 1996. 4.18 Second Amendment to Consulting Agreement dated 5/30/96 between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc., dated as of August 28, 1996.
33 35 4.19 Option to Purchase 120,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Albert E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Albert E. Gosselin. 4.20 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Gary L. Dudley; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Gary L. Dudley.
34 36 4.21 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Craig E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Craig E. Gosselin. 4.22 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Cynthia L. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Cynthia L. Gosselin. 4.23 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Marcia Smith; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Marcia Smith. 4.24 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Margaret Jones; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Margaret Jones.
35 37 4.25 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and John Ann Hotchkiss. 4.26 Warrant to Purchase 291,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to John Ann Hotchkiss. 4.27 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and David Firestone. 4.28 Warrant to Purchase 166,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to David Firestone. 4.29 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Irawan Onggara. 4.30 Warrant to Purchase 166,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Irawan Onggara. 4.31 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and John M. Liviakis. 4.32 Warrant to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to John M. Liviakis. 4.33 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Robert S. London.
36 38 4.34 Warrant to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Robert S. London. 4.35 Purchase Agreement, dated as of June 14,1996, between Pollution Research and Control Corp. and Robert B. Prag. 4.36 Warrant to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Robert B. Prag. 4.37 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Shawn Cady. 4.38 Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Shawn Cady. 4.39 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Donald Carstens. 4.40 Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued Lo Donald Carstens. 4.41 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Ling Nen Chuan. 4.42 Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Ling Nen Chuan. 4.43 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Sanibel Capital Corporation. 4.44 Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Sanibel Capital Corporation. 4.45 Purchase Agreement, dated as of June 14,1996, between Pollution Research and Control Corp. and Donna Sizemore. 4.46 Warrant to Purchase 8,333 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Donna Sizemore. 4.47 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Randy Foy; Option Agreement, dated as of July 1, 1996, between Pollution Research and Control Corp. and Randy Foy.
37 39 4.48 Letter Agreement, dated as of September 20, 1996, between Pollution Research and Control Corp. and Neil C. Sullivan. 4.49 Warrant to Purchase 300,000 Shares of Common Stock of Pollution Research and Control Corp., dated September 20, 1996, issued to Neil C. Sullivan.
38 40 5.0 Opinion and Consent of Patricia Cudd & Associates. 23.1 Consent of Patricia Cudd & Associates (included in Exhibit 5.0 hereto). 23.2 Consent of Greenberg & Jackson, an Accountancy Corporation, independent auditors. 25.0 Power of Attorney (included on the signature page hereto).
39 41 - ------------------ *Previously filed. 40 EX-4.11 2 OPTION TO PURCHASE 10,000 SHARES COMMON STOCK 1 EXHIBIT 4.11 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 10,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM APRIL 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 1999 This certifies that Phil Huss or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $.68 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on March 31, 1999. Registered Owner: Phil Huss Purchase Price: $.68 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of April 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Phil Huss ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 10,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 10,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $.68 (the "Option Price"), and for purposes of record, the bid market price on this date was $.64. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate three (3) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that he is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) His overall commitment to investments that are not readily marketable is not disproportionate to his net worth, and his investment in PRCC will not cause such overall commitment to become excessive; (d) He has the financial ability to bear the economic risk of his investment, has adequate means of providing for his current needs and personal contingencies, and has no need for liquidity in his investment in PRCC; (e) He either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect his interests in connection with the transaction; 3 4 (f) He has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information he has desired in order to evaluate his investment, and to consult with such attorneys, accountants and other advisors as he has desired; (g) His residence set forth below is his true and correct residence, and he has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, he has relied solely upon independent investigations made by or on behalf of him; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) He understands that all the representations and warranties made by him herein, and all information furnished by him to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that he understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER 4 5 FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Phil Huss Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding 5 6 options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ ALBERT E. GOSSELIN, JR. ----------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ PHIL HUSS -------------------------------- Phil Huss 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of________________ ____________as to_____________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. - ---------------------------------- ------------------------------ (Print Your Name) Signature 7 EX-4.12 3 CONSULTING AGREEMENT DATED MAY 30, 1996 1 EXHIBIT 4.12 CONSULTING AGREEMENT This Consulting Agreement (the "Agreement"), effective as of May 30, 1996 is entered into by and between POLLUTION RESEARCH AND CONTROL CORP., a California corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California corporation (herein referred to as the "Consultant"). RECITALS WHEREAS, Company is a publicly held corporation with its common stock traded on the NASDAQ; and WHEREAS, Consultant has experience in the area of corporate finance, investor communications and financial and investor public relations; and WHEREAS, Company desires to engage the services of Consultant to assist and consult to the Company in matters concerning corporate finance and to represent the Company in investors' communications and public relations with existing shareholders and brokers, dealers and other investment professionals as to the Company's current and proposed activities; NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. Term of Consultancy. Company hereby agrees to retain the Consultant to act in a consulting capacity to the Company, and the Consultant hereby agrees to provide services to the Company, for a term of twelve (12) months commencing on May 30, 1996 and ending on May 29, 1997. 2. Duties of Consultant. The Consultant agrees to provide the following specified consulting services through its officers and employees during the term specified in Section 1. (a) Advise and assist the Company in developing and implementing appropriate plans and materials for presenting the Company and its business plans, strategy and personnel to the financial community, establishing an image for the Company in the financial community, and creating the foundation for subsequent financial public relations efforts; (b) Introduce the Company to the financial community; (c) With the cooperation of the Company, maintain an awareness during the term of this Agreement of the Company's plans, strategy and personnel, as they may evolve during such period, and advise and assist the Company in communicating appropriate information regarding such plans, strategy and personnel to the financial community; (d) Assist and advise the Company with respect to its (i) corporate finance activities, (ii) stockholder and investor relations, (iii) relations with brokers, dealers, analysts and other investment professionals, and (iv) financial public relations generally; 1. 2 (e) Perform the functions generally assigned to investor/stockholder relations and public relations departments in major corporations, including responding to telephone and written inquiries (which may be referred to the Consultant by the Company); preparing or reviewing press releases, reports and other communications with or to shareholders, the investment community and the general public; advising with respect to the timing, form, distribution and other matters related to such releases, reports and communications; and consulting with respect to corporate symbols, logos, names, the presentation of such symbols, logos and names, and other matters relating to corporate image; (f) Disseminate information regarding the Company to shareholders, brokers, dealers, other investment community professionals and the general investment public; (g) Conduct meetings, in person or by telephone, with brokers, dealers, analysts and other investment professionals to advise them of the Company's plans, goals and activities, and assist the Company in preparing for press conferences and other forums involving the media, investment community professionals and the general investment public; (h) At the Company's request, review business plans, strategies, mission statements, budgets, proposed transactions and other plans for the purpose of advising the Company of the investment community implications thereof; (i) Otherwise perform as the Company's financial relations and public relations consultant; and, (j) Make public communications and disclosures regarding the Company only within the scope of the authorizations conferred by the Company and not make any such communications or disclosures of information not provided or authorized by the Company. 3. Allocation of Time and Energies. The Consultant hereby promises to perform and discharge well and faithfully the responsibilities which may be assigned to the Consultant from time to time by the officers and duly authorized representatives of the Company in connection with the conduct of its financial and investor public relations and communications activities, so long as such activities are in compliance with applicable securities laws and regulations. Consultant shall diligently and thoroughly provide the consulting services required hereunder. Although no specific hours-per-day requirement will be required, Consultant and the Company agree that Consultant will perform the duties set forth hereinabove in a diligent and professional manner. At the request of the Company, the Consultant will inform the Company of its specific activities concerning the Company. The parties acknowledge and agree that a disproportionately large amount of the effort to be expended and the costs to be incurred by the Consultant and the benefits to be received by the Company are expected to occur upon and shortly after, and in any event, within four or five months of the effectiveness of this Agreement. 4. Remuneration. As full and complete compensation for services described in this Agreement, the Company shall compensate Consultant as follows: 4.1 For undertaking this engagement and for other good and valuable consideration, the Company agrees to issue and deliver to the Consultant a "Commencement Bonus" payable in the form of 2,000,000 options (the "Options") entitling the Consultant the right to purchase shares of the Company's Common Stock. The form and content of the Option Agreements are attached hereto and by reference incorporated herein as Exhibit "A" and 2. 3 will be acceptable to both the Company and the Consultant. Among other things, the Options will contain the following terms and conditions: 1. 1,000,000 of the Options will be exercisable at a price of ninety-four Cents ($.94); 500,000 of the Options will be exercisable at a price of One Dollar and twenty five Cents ($1.25); and, 500,000 of the Options will be exercisable at a price of Two Dollars ($2.00); 2. the Options will be exercisable any time after November 30, 1996 and for the remainder of the four year period; 3. the Options will contain no call and/or redemption provisions; 4. the shares of common stock issuable upon the exercise of the Options will be included in the next appropriate registration done by the Company, which shall be no later than November 30, 1996. All registration costs shall be borne solely by the Company. This Commencement Bonus shall be issued to the Consultant promptly following execution of this Agreement and shall, when issued and delivered to Consultant, be fully paid and non-assessable. The Company understands and agrees that Consultant has foregone significant opportunities to accept this engagement and that the Company derives substantial benefit from the execution of this Agreement and the ability to announce its relationship with Consultant. The 2,000,000 Options issued as a Commencement Bonus, therefore, constitute payment for Consultant's agreement to represent the Company and are a nonrefundable, non-apportionable, and non- ratable retainer; such Options are not a prepayment for future services. Seventy-five percent (75%) of each of the various Options issued pursuant to this Agreement shall be evidenced by option agreements issued in the name of Liviakis Financial Communications, Inc. and twenty-five percent (25%) of each of the various Options issued pursuant to this Agreement shall be evidenced by option agreements issued in the name of Robert B. Prag ("Prag"). 4.2 Consultant and Prag (hereinafter referred to as "Consultants") acknowledge that both the Options and the shares issuable upon the exercise of the Options to be issued pursuant to this Agreement (the "Shares") have not been registered under the Securities Act of 1933, and accordingly are "restricted securities" within the meaning of Rule 144 of the Act. As such, the Options and the Shares may not be resold or transferred unless the Company has received an opinion of counsel reasonably satisfactory to the Company that such resale or transfer is exempt from the registration requirements of that Act. 4.3 In connection with the acquisition of Options hereunder, the Consultants represent and warrant to the Company as follows: (a) Consultants acknowledge that the Consultants have been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other 3. 4 representatives of the Company concerning an investment in the shares, and any additional information which the Consultants have requested. (b) Consultants' investment in restricted securities is reasonable in relation to the Consultants' net worth, which is in excess of ten (10) times the Consultants' cost basis in the shares. Consultants have had experience in investments in restricted and publicly traded securities, and Consultants have had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Consultants acknowledge that an investment in the Options is speculative and involves the risk of loss. Consultants have the requisite knowledge to assess the relative merits and risks of this investment without the necessity of relying upon other advisors, and Consultants can afford the risk of loss of their entire investment in the Options. Consultants are (i) accredited investors, as that term is defined in Regulation D promulgated under the Securities Act of 1933, and (ii) a purchaser described in Section 25102 (f) (2) of the California Corporate Securities Law of 1968, as amended. (c) Consultants are acquiring the Options for the Consultants' own account for long-term investment and not with a view toward resale or distribution thereof except in accordance with applicable securities laws. 5. Expenses. Consultant agrees to pay for all its expenses (phone, mailing, labor, etc.), other than extraordinary items (travel required by/or specifically requested by the Company, luncheons or dinners to large groups of investment professionals, mass faxing to a sizable percentage of the Company's constituents, investor conference calls, etc.) approved by the Company prior to its incurring an obligation for reimbursement. 6. Indemnification. The Company warrants and represents that all oral communications, written documents or materials, other than those designated by the Company to the Consultant as "confidential" or "Company private", furnished to Consultant by the Company with respect to financial affairs, operations, profitability and strategic planning of the Company are accurate and Consultant may rely upon the accuracy thereof without independent investigation. The Company will protect, indemnify and hold harmless Consultant against any claims or litigation including any damages, liability, cost and reasonable attorney's fees with respect thereto resulting from Consultant's communication or dissemination of any said information, documents or materials not designated by the Company to the Consultant as "confidential" or "Company private", excluding, any such claims or litigation resulting from Consultant's communication or dissemination of information not provided or authorized by the Company. To the extent feasible, the Company agrees to make Consultant an additional insured on any and all commercial liability and directors and officers liability insurance policies and to provide Consultant with current Certificates of Insurance reflecting, the same. 7. Representations. Consultant represents that it is not required to maintain any licenses and registrations under federal or any state regulations necessary to perform the services set forth herein. Consultant acknowledges that, to the best of its knowledge, the performance of the services set forth under this Agreement will not violate any rule or provision of any regulatory 4. 5 agency having jurisdiction over Consultant. Consultant acknowledges that, to the best of his knowledge, Consultant is not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws. Consultant further acknowledges that it is not a securities Broker Dealer or a registered investment advisor. 8. Legal Representation. The Company acknowledges that it has been represented by independent legal counsel in the preparation of this Agreement. Consultant represents that it has consulted with independent legal counsel and/or tax, financial and business advisors, to the extent the Consultant deemed necessary. 9. Status as Independent Contractor. Consultant's engagement pursuant to this Agreement shall be as independent contractor, and not as an employee, officer or other agent of the Company. Neither party to this Agreement shall represent or hold itself out to be the employer or employee of the other. Consultant further acknowledges the consideration provided hereinabove is a gross amount of consideration and that the Company will not withhold from such consideration any amounts as to income taxes, social security payments or any other payroll taxes. All such income taxes and other such payment shall be made or provided for by Consultant and the Company shall have no responsibility or duties regarding such matters. Neither the Company or the Consultant possess the authority to bind each other in any agreements without the express written consent of the entity to be bound. 10. Attorney's Fee. If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs in connection with that action or proceeding, in addition to any other relief to which it or they may be entitled. 11. Waiver. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such other party. 12. Notices. All notices, requests, and other communications hereunder shall be deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the other party at the address as set forth herein below: To the Company: Mr. Albert E. Gosselin Chairman & CEO Pollution Research and Control Corp. 506 Paula Avenue Glendale, CA 91201 5. 6 To the Consultant: Liviakis Financial Communications, Inc. John M. Liviakis, President 2118 "P" Street; Suite C Sacramento, California 95816 It is understood that either party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in the manner set forth in this paragraph. 13. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of California. The parties agree that Sacramento County, CA. will be the venue of any dispute and will have jurisdiction over all parties. 14. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the alleged breach thereof, or relating to Consultant's activities or remuneration under this Agreement, shall be settled by binding arbitration in California, in accordance with the applicable rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator(s) shall be binding on the parties and may be entered in any court having jurisdiction thereof. The provisions of Title 9 of Part 3 of the California Code of Civil Procedure, including section 1283.05, and successor statutes, permitting expanded discovery proceedings shall be applicable to all disputes that are arbitrated under this paragraph. 15. Complete Agreement. This Agreement instrument contains the entire agreement of the parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. AGREED TO: "Company" POLLUTION RESEARCH AND CONTROL CORP. Date: 5/31/96 By: /s/ ALBERT E. GOSSELIN -------------------------------- Mr. Albert E. Gosselin Chairman & CEO "Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC. Date: 5/31/96 By: /s/ JOHN M. LIVIAKIS /s/ ROBERT B. PRAG --------------------- ---------------------- John M. Liviakis Robert B. Prag President Sr. Vice President 6. EX-4.13 4 NON-QUALIFIED STOCK OPTION AGREEMENT 5-30-96 1 EXHIBIT 4.13 EXHIBIT "A" NON-QUALIFIED STOCK OPTION AGREEMENT AGREEMENT, made as of the 30th day of May 1996, by and between Pollution Research and Control Corp., a California corporation having its principal executive offices at 506 Paula Avenue, Glendale, California 91201 (the "Grantor), and Liviakis Financial Communications, Inc., a California corporation having its principal executive offices at 2118 "P" Street, Suite C, Sacramento, California 95816 (the "Optionee"). WITNESSETH: WHEREAS, the Optionee has agreed to perform services for the Grantor; and WHEREAS, the Grantor is desirous that Optionee exert its utmost efforts on behalf of the Grantor. NOW, THEREFORE, in consideration of the Optionee's service to the Grantor, and for other good and valuable consideration, the Grantor hereby grants to the Optionee options to purchase common stock of the Grantor, $.001 par value ("Common Stock"), on the following terms and conditions: 1. Option. The Grantor hereby grants to the Optionee a non-qualified stock option (not qualified as described in Section 422 of the Internal Revenue Code of 1986, as amended, the "Code") to purchase, prior to 5:00 p.m. Glendale time on May 29, 2000, as set forth in Paragraph 3 hereof, up to an aggregate of one million five hundred thousand (1,500,000) fully paid and nonassessable shares of Common Stock (the "Shares"), subject to the terms and conditions set forth below. 2. Exercise Prices. The exercise prices shall be allocated as set forth below: 750,000 options to purchase shares at ninety-four cents ($.94) per Share; 375,000 options to purchase shares at one dollar and twenty-five cents ($1.25) per Share; and 375,000 options to purchase shares at two dollars ($2.00) per Share; The Grantor shall pay all original issue or transfer taxes on the exercise of this option and all other fees and expenses incurred by the Grantor in connection herewith. 3. Exercise of Option. All of the options granted hereby shall first become exercisable on November 30, 1996. Subject to the provisions of Paragraph 4 hereof, such options shall be exercisable in whole or in 1 2 part at any time and from time to time from the date on which they are first exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000. In order to exercise the option granted hereunder in whole or in part, the Optionee shall deliver to the Grantor a written notice substantially in the form of Notice of Exercise of Option to Purchase Shares attached hereto, delivery to be effected by personal delivery, by overnight courier or by registered or certified mail, return receipt requested, addressed to the Grantor at its principal office. Such notice shall specify the number of Shares which Optionee is purchasing under the option herein granted and shall be accompanied by either: (i) payment (in the form of cash or certified or bank cashier's check) for the Shares so being purchased at the exercise price so specified in the form of Notice of Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2 above; or (ii) Optionee's written direction to the Grantor to retain as consideration for the option exercise that number of Shares (rounded upward to the next highest full Share) so being purchased which have an aggregate value equal to the product derived by multiplying (a) the number of Shares so being purchased by (b) the exercise price so specified in the form of Notice of Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2 above, such Shares to be valued for such purposes at the mean between the high and low prices at which Shares trade in the principal market in which Shares trade on the trading day preceding the date on which such notice is delivered to the Grantor. As soon as practicable thereafter but in any event within five (5) business days after Grantor shall cause to be delivered to the Optionee certificates issued in the Optionee's name evidencing (x) in the case payment of the exercise price pursuant to (i) above the full number of Shares as to which this option was exercised by the Optionee or (y) in the case of payment of the exercise price pursuant to (ii) above the number of Shares remaining after subtracting from the full number of Shares as to which this option was exercised by Optionee that number of Shares which Grantor is to retain pursuant to (ii) above. Optionee shall be considered to be the holder and owner of the Shares to be evidenced by such certificates as of the close of business on the date Grantor received the notice of exercise accompanied by payment, as contemplated herein, without regard to the date of actual issuance of the certificate(s) representing such Shares, 4. Divisibility and Non-Assignability of the Option. (a) The Optionee may exercise the option herein granted in whole or in part at any time and from time to time, subject to the provisions of Paragraph 3 above, with respect to any whole number of Shares included therein, but in no event may an option be exercised as to less than ten thousand (10,000) Shares at any time, except for the remaining Shares covered by the option of less than ten thousand (10,000). (b) The Optionee may not give, grant, sell, exchange, transfer legal title, pledge, assign or otherwise encumber or dispose of the options herein granted or any interest therein, and the options herein granted, or any of them, shall be exercisable only by the Optionee or its legal successors. 2 3 5. Stock as Investment. By accepting this option, the Optionee agrees that it is Optionee's intention to purchase Shares hereunder for investment and without any view towards the resale or distribution thereof. In the event Shares to be issued upon exercise of this Option have not been registered at the time of proposed issuance under the Securities Act of 1933, as amended (the "Securities Act"), the Optionee shall deliver to the Grantor at the time of such issuance a written representation that Optionee is acquiring such Shares in good faith for investment purposes only and not for resale or distribution. Grantor may place a "stop transfer" order with respect to such Shares with its transfer agent and place an appropriate restrictive legend on the stock certificate(s) evidencing such Shares, in order to prevent transfers unless such Shares are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is applicable. 6. Conditions to Issuance of Shares. The Grantor shall issue and deliver certificates for Shares purchased upon the exercise of any option granted hereunder, provided each of the following conditions is satisfied, which conditions the Grantor hereby undertakes and agrees to satisfy or cause to be satisfied: (a) the issuance of such Shares shall have been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or counsel to the Grantor shall have given an opinion that such issuance is exempt from the registration requirements of such Act; (b) approval, to the extent required, shall have been obtained from any state regulatory body having jurisdiction thereof; and (c) permission for the listing of such Shares, if required, shall have been given by NASDAQ or any national securities exchange on which Shares are at the time of issuance listed. 7. Registration Rights. (a) If, at any time during the exercise period hereof and the three (3) years following any exercise hereunder, the Grantor proposes to file a registration statement with respect to any class of securities (other than pursuant to a registration statement on Forms S-4 or S-8 or any successor form) under the Securities Act, the Grantor shall notify the Optionee at least twenty (20) days prior to the filing of such registration statement and will offer to include in such registration statement all or any portion of the Shares. In a written notice to be delivered to the Grantor within twenty (20) days after receipt of any such notice from Grantor, the Optionee shall state the number of Shares that it wishes to register for resale and distribution publicly under the proposed registration statement. The Grantor will use its best efforts, through its officers, directors, auditors and counsel in all matters necessary or advisable, to file at least one (1) such registration statement by January 3 1, 1997. The Grantor will also use its best efforts, through its officers, directors, auditors and counsel in all matters necessary or advisable, to include within the coverage of each such registration statement (except as hereinafter provided) the Shares that Optionee has advised Grantor that Optionee wishes to register pursuant to such registration statement for resale and distribution, to prosecute each such registration statement diligently to effectiveness, and to cause such registration statement to become effective as promptly as practicable. In that regard, the Grantor makes no representation or warranties as to its ability to have any registration statement declared effective. 3 4 All registrations requested pursuant to this Paragraph 7 (a) are referred to herein as "Piggyback Registrations." In the event the Grantor is advised by the staff of the SEC, NASDAQ or any self-regulatory or state securities agency that the inclusion of the Shares will prevent, preclude or materially delay the effectiveness of a registration statement filed, the Grantor, in good faith, may amend such registration statement to exclude the Shares without otherwise affecting the Optionee's rights to any other registration statement herein. (i) Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Grantor, and if the underwriter thereof advises the Grantor in writing that in its opinion the number of Shares requested to be included in such registration statement exceeds the number that can be sold in such offering without materially adversely affecting the distribution of such securities by the Grantor, then the Grantor will include in such registration statement first, the securities that the Grantor proposes to sell and second, the securities requested to be included in such registration statement by selling securityholders, such right to inclusion being apportioned pro rata among the Optionee and the other holders of any other securities requesting registration according to the market value of Shares and other securities requested to be registered. Notwithstanding the above, if any such underwriter shall advise the Grantor in writing that the distribution of the Shares being included in the registration statement concurrently with the securities being registered by the Grantor would materially adversely affect the distribution of such securities by the Grantor, then the Optionee shall delay its offering and sale for such period ending on the earliest of (a) 180 days following the effective date of the Grantor's registration statement, (b) the earliest date that, in the opinion of such underwriter, such adverse effect would no longer be caused, or (c) such date as the Grantor, managing underwriter and Optionee shall otherwise agree. In the event of such delay, the Grantor shall file such supplements and post-effective amendments and take any such other actions as may be necessary or appropriate to permit such Optionee to make its proposed offering and sale for a period of at least ninety (90) days commencing immediately following the end of such period of delay. If any party disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Grantor, the underwriter and the Optionee. Notwithstanding the foregoing, the Grantor shall not be required to include Shares within the coverage of a registration statement being filed pursuant to this Paragraph 7(a)(i) if, in the opinion of counsel for both the Grantor and Optionee, all of the Shares proposed to be registered may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act. (ii) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of securities of the Grantor, and the underwriter thereof advises the Grantor in writing that in its opinion the number of Shares requested to be included in such registration statement exceeds the number which can be sold in such offering without materially adversely affecting the distribution of such securities, then the Grantor will include in such registration statement the securities requested to be included in such registration statement by selling securityholders on a pro rata basis, with such rights to inclusion being apportioned among the Optionee and the other holders of any other securities requesting registration according to the market value of Shares and other securities requested by them, respectively, to be registered. Notwithstanding the foregoing, the Grantor shall not be required 4 5 to include Shares within the coverage of a registration statement being filed pursuant to this Paragraph 9(a)(ii) if, in the opinion of counsel for both the Grantor and Optionee, all of the Shares proposed to be registered may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act. (b) If at any time after November 30, 1996 and prior to the third (3rd) anniversary of the earlier of the expiration of the option herein granted and the purchase of the final Shares remaining subject to such option Shares issued or issuable upon exercise of the option herein granted are not then registered under one or more Piggyback Registrations and then covered by a prospectus complying with the requirements of the Securities Act, the Optionee may by written notice to the Grantor require Grantor to file a registration statement under the Securities Act covering such Shares as Optionee may specify in such notice. Optionee shall be entitled so to require Grantor to file a registration statement pursuant to this Paragraph 7(b) on only one (1) occasion. The Grantor will file such a registration statement within ninety (90) days of receipt of such notice; and thereafter will prosecute such registration statement diligently to effectiveness; will cause such registration statement to become effective as promptly as practicable; will promptly file all such supplements and post-effective amendments to such registration statement and take any such other actions as may be necessary or appropriate to make available to Optionee on as continuous a basis as soon as practicable a prospectus meeting the requirements of the Securities Act through the earliest of (a) the date on which the final Shares have been sold and distributed by Optionee, (b) the date on which, in the opinion of counsel for both the Grantor and Optionee, all of the Shares which Optionee then holds may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act, and (c) May 29, 2003. In that regard, the Grantor makes no representations or warranties as to its ability to have any registration statement or post-effective amendment thereto declared effective. (c) In the event of any registration of a security pursuant to this Paragraph 7, the Grantor shall indemnify the Optionee and its officers and directors against all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus (and as amended or supplemented) relating to such registration, or caused by any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they are made unless such statement or omission was made in reliance upon and in conformity with information furnished to the Grantor by the Optionee expressly for use therein. The Optionee shall also indemnify the Grantor, its officers and directors and each underwriter of the Shares so registered with respect to losses, claims, damages and Shares so registered with respect to losses, claims, damages and liabilities caused by an untrue statement or omission made in reliance upon and in conformity with information furnished by the Optionee to the Grantor in writing expressly for use in such registration statement or prospectus. (d) All expenses of any registration referred to in this Paragraph 7, except the fees and disbursement of counsel to the Optionee, underwriting commissions or discounts and any transfer or other taxes applicable to the transfer of Shares by the Optionee, shall be borne by the Grantor. 5 6 (e) Following the exercise of options hereunder, the Optionee shall promptly advise the Grantor when Optionee no longer holds any shares acquired through the exercise of options granted hereunder, and upon the request of the Grantor, the Optionee shall advise the Grantor from time to time of the number of Shares then held by Optionee which were acquired through the exercise of options granted hereunder. 8. Adjustments Upon Changes in Capitalization. (a) In the event of changes in the outstanding Common Stock of the Grantor by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, consolidations, combinations, exchanges of shares, separations, reorganizations, liquidations or any similar events or events having similar consequences, the number and class of Shares as to which the option may be exercised shall be correspondingly adjusted so that for the same aggregate exercise price the Optionee shall be entitled to acquire the securities and other property Optionee would have held if Optionee had exercised the option granted hereunder for the number of Shares under consideration prior to the first of such events to occur and continued to hold such Shares and all other securities and other property issued with respect thereto in connection with such events. No adjustment shall be made with respect to cash dividends or non-liquidating dividends payable in property other than cash, so long as Grantor provides Optionee with written notice of any such proposed dividend at least fifteen (15) days prior to the record date for such dividend. Grantor shall also give Optionee prompt written notice of any event resulting in an adjustment under this Paragraph 8(a), including a detailed computation of such adjustment. (b) Any adjustment in the number and kind of Shares and other securities shall apply proportionately to only the unexercised portion of the option granted hereunder at the time of the event given rise to the adjustment. If fractions of a Share would result from any such adjustment, the adjustment shall be revised to the next higher whole number of Shares so long as such increase does not result in the holder of the option being deemed to own more than 5% of the total combined young power or value of all classes of stock of the Grantor or its subsidiaries, in which case the adjustment shall be revised to the next lower whole number of Shares. 9. Effect of Mergers, Consolidations or Sales of Assets. In the event Grantor should propose to merge or consolidate with, or engage in some other form of business combination with, any other corporation or entity on a basis in which Grantor is not to be the surviving entity, then as a condition precedent to proceeding with such merger, consolidation or other business entity, Grantor agrees to assume and perform all of Grantor's obligations under the right to acquire the same securities and property for the option exercise price specified herein as Optionee would have received if Optionee had exercised the option granted herein immediately prior to such merger, consolidation or other business combination. To the extent the above may be inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall be deemed interpreted so as to comply therewith. 6 7 10. No Rights in Option Stock. Optionee shall have no rights as a shareholder in respect of Shares as to which the option granted hereunder shall not have been exercised and payment made as herein provided. 11. Effect Upon Employment. This Agreement does not give the Optionee any right to employment by, or any other relationship with, the Grantor. 12. Binding Effect. Except as herein otherwise expressly provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors, legal representatives and assigns. 13. Miscellaneous. This Agreement shall be construed under the laws of the State of California applied to agreements made and to be performed entirely within such State. Headings have been included herein for convenience of reference only and shall not be deemed a part of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Pollution Research and Control Corp. By: /s/ ALBERT E. GOSSELIN, JR. ----------------------------- ACCEPTED AND AGREED TO: LIVIAKIS FINANCIAL COMMUNICATIONS, INC. By: /s/ JOHN M. LIVIAKIS -------------------------------- John M. Liviakis, President 7 8 NOTICE OF EXERCISE OF OPTION TO PURCHASE SHARES TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned hereby exercises the option for the purchase of ______________________________ ( _________________) Shares with an exercise price of ___________________________________ ($___________) according to the terms and conditions of that certain Non-Qualified Stock Option Agreement, dated as of May 30, 1996, between Pollution Research and Control Corp. and the undersigned (the "Agreement") and herewith makes payment of the exercise price in full in accordance with the terms of said Agreement by (check one): [ ] (i) payment in the form of cash or certified or bank cashier's check for the Shares so being purchased at the exercise price of __________________($______________) therefor as specified in Paragraph 2 of the Agreement; or [ ] (ii) these written directions to the Grantor to retain as consideration for the option exercise that number of the Shares (rounded upward to the next highest full Share) so being purchased which have an aggregate value (valued for such purpose at the mean between the high and low prices at which Shares traded in the principal market in which Shares trade on the trading day preceding the date on which this Notice is delivered to Pollution Research and Control Corp.) equal to the product derived by multiplying (a) the number of Shares so being purchased by (b) the exercise price therefor as specified in Paragraph 2 of the Agreement. The undersigned is purchasing such Shares for investment purposes only and not with a view to the sale or distribution thereof. Kindly issue the certificate for such Shares in accordance with the instructions given below. ----------------------------- Signature Social Security or Taxpayer I.D. Number: ---------------------- Instructions for issuance of stock: - -------------------------------------------------------------------------------- Name - -------------------------------------------------------------------------------- Street Address - -------------------------------------------------------------------------------- City State Zip Code 8 EX-4.14 5 NON-QUALIFIED STOCK OPTION AGREEMENT 5-30-96 1 EXHIBIT 4.14 EXHIBIT "A" NON-QUALIFIED STOCK OPTION AGREEMENT AGREEMENT, made as of the 30th day of May 1996, by and between Pollution Research and Control Corp., a California corporation having its principal executive offices at 506 Paula Avenue, Glendale, California 91201 (the "Grantor), and Robert B. Prag , whose business address is 2118 "P" Street, Suite C, Sacramento, California 95816 (the "Optionee"). WITNESSETH: WHEREAS, the Optionee has agreed to perform services for the Grantor; and WHEREAS, the Grantor is desirous that Optionee exert its utmost efforts on behalf of the Grantor. NOW, THEREFORE, in consideration of the Optionee's service to the Grantor, and for other good and valuable consideration, the Grantor hereby grants to the Optionee options to purchase common stock of the Grantor, $.001 par value ("Common Stock"), on the following terms and conditions: 1. Option. The Grantor hereby grants to the Optionee a non-qualified stock option (not qualified as described in Section 422 of the Internal Revenue Code of 1986, as amended, the "Code") to purchase, prior to 5:00 p.m. Glendale time on May 29, 2000, as set forth in Paragraph 3 hereof, up to an aggregate of five hundred thousand (500,000) fully paid and nonassessable shares of Common Stock (the "Shares"), subject to the terms and conditions set forth below. 2. Exercise Prices. The exercise prices shall be allocated as set forth below: 250,000 options to purchase shares at ninety-four cents ($.94) per Share; 125,000 options to purchase shares at one dollar and twenty-five cents ($1.25) per Share; and 125,000 options to purchase shares at two dollars ($2.00) per Share: The Grantor shall pay all original issue or transfer taxes on the exercise of this option and all other fees and expenses incurred by the Grantor in connection herewith. 3. Exercise of Option. All of the options granted hereby shall first become exercisable on November 30, 1996. Subject to the provisions of Paragraph 4 hereof, such options shall be exercisable in whole or in part at any time and from time to time from the date on which they are first exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000. 1 2 In order to exercise the option granted hereunder in whole or in part, the Optionee shall deliver to the Grantor a written notice substantially in the form of Notice of Exercise of Option to Purchase Shares attached hereto, delivery to be effected by personal delivery, by overnight courier or by registered or certified mail, return receipt requested, addressed to the Grantor at its principal office. Such notice shall specify the number of Shares which Optionee is purchasing under the option herein granted and shall be accompanied by either: (i) payment (in the form of cash or certified or bank cashier's check) for the Shares so being purchased at the exercise price so specified in the form of Notice of Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2 above; or (ii) Optionee's written direction to the Grantor to retain as consideration for the option exercise that number of Shares (rounded upward to the next highest full Share) so being purchased which have an aggregate value equal to the product derived by multiplying (a) the number of Shares so being purchased by (b) the exercise price so specified in the form of Notice of Exercise of Option to Purchase Shares and therefor as specified in Paragraph 2 above, such Shares to be valued for such purposes at the mean between the high and low prices at which Shares trade in the principal market in which Shares trade on the trading day preceding the date on which such notice is delivered to the Grantor. As soon as practicable thereafter but in any event within five (5) business days after Grantor shall cause to be delivered to the Optionee certificates issued in the Optionee's name evidencing (x) in the case payment of the exercise price pursuant to (i) above the full number of Shares as to which this option was exercised by the Optionee or (y) in the case of payment of the exercise price pursuant to (ii) above the number of Shares remaining after subtracting from the full number of Shares as to which this option was exercised by Optionee that number of Shares which Grantor is to retain pursuant to (ii) above. Optionee shall be considered to be the holder and owner of the Shares to be evidenced by such certificates as of the close of business on the date Grantor received the notice of exercise accompanied by payment, as contemplated herein, without regard to the date of actual issuance of the certificate(s) representing such Shares. 4. Divisibility and Non-Assignability of the Option. (a) The Optionee may exercise the option herein granted in whole or in part at any time and from time to time, subject to the provisions of Paragraph 3 above, with respect to any whole number of Shares included therein, but in no event may an option be exercised as to less than ten thousand (10,000) Shares at any time, except for the remaining Shares covered by the option of less than ten thousand (10,000). (b) The Optionee may not give, grant, sell, exchange, transfer legal title, pledge, assign or otherwise encumber or dispose of the options herein granted or any interest therein, and the options herein granted, or any of them, shall be exercisable only by the Optionee or its legal successors. 2 3 5. Stock as Investment. By accepting this option, the Optionee agrees that it is Optionee's intention to purchase Shares hereunder for investment and without any view towards the resale or distribution thereof. In the event Shares to be issued upon exercise of this Option have not been registered at the time of proposed issuance under the Securities Act of 1933, as amended (the "Securities Act"), the Optionee shall deliver to the Grantor at the time of such issuance a written representation that Optionee is acquiring such Shares in good faith for investment purposes only and not for resale or distribution. Grantor may place a "stop transfer" order with respect to such Shares with its transfer agent and place an appropriate restrictive legend on the stock certificate(s) evidencing such Shares, in order to prevent transfers unless such Shares are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is applicable. 6. Conditions to Issuance of Shares. The Grantor shall issue and deliver certificates for Shares purchased upon the exercise of any option granted hereunder, provided each of the following conditions is satisfied, which conditions the Grantor hereby undertakes and agrees to satisfy or cause to be satisfied: (a) the issuance of such Shares shall have been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or counsel to the Grantor shall have given an opinion that such issuance is exempt from the registration requirements of such Act; (b) approval, to the extent required, shall have been obtained from any state regulatory body having jurisdiction thereof, and (c) permission for the listing of such Shares, if required, shall have been given by NASDAQ or any national securities exchange on which Shares are at the time of issuance listed. 7. Registration Rights. (a) If, at any time during the exercise period hereof and the three (3) years following any exercise hereunder, the Grantor proposes to file a registration statement with respect to any class of securities (other than pursuant to a registration statement on Forms S-4 or S-8 or any successor form) under the Securities Act, the Grantor shall notify the Optionee at least twenty (20) days prior to the filing of such registration statement and will offer to include in such registration statement all or any portion of the Shares. In a written notice to be delivered to the Grantor within twenty (20) days after receipt of any such notice from Grantor, the Optionee shall state the number of Shares that it wishes to register for resale and distribution publicly under the proposed registration statement. The Grantor will use its best efforts, through its officers, directors, auditors and counsel in all matters necessary or advisable, to file at least one (1) such registration statement by January 3 1, 1997. The Grantor will also use its best efforts, through its officers, directors, auditors and counsel in all matters necessary or advisable, to include within the coverage of each such registration statement (except as hereinafter provided) the Shares that Optionee has advised Grantor that Optionee wishes to register pursuant to such registration statement for resale and distribution, to prosecute each such registration statement diligently to effectiveness, and to cause such registration statement to become effective as promptly as practicable. In that regard, the Grantor makes no representation or warranties as to its ability to have any registration statement declared effective. 3 4 All registrations requested pursuant to this Paragraph 7 (a) are referred to herein as "Piggyback Registrations." In the event the Grantor is advised by the staff of the SEC, NASDAQ or any self-regulatory or state securities agency that the inclusion of the Shares will prevent, preclude or materially delay the effectiveness of a registration statement filed, the Grantor, in good faith, may amend such registration statement to exclude the Shares without otherwise affecting the Optionee's rights to any other registration statement herein. (i) Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Grantor, and if the underwriter thereof advises the Grantor in writing that in its opinion the number of Shares requested to be included in such registration statement exceeds the number that can be sold in such offering without materially adversely affecting the distribution of such securities by the Grantor, then the Grantor will include such registration statement first, the securities that the Grantor proposes to sell and second, the securities requested to be included in such registration statement by selling securityholders, such right to inclusion being apportioned pro rata among the Optionee and the other holders of any other securities requesting registration according to the market value of Shares and other securities requested to be registered. Notwithstanding the above, if any such underwriter shall advise the Grantor in writing that the distribution of the Shares being included in the registration statement concurrently with the securities being registered by the Grantor would materially adversely affect the distribution of such securities by the Grantor, then the Optionee shall delay its offering and sale for such period ending on the earliest of (a) 180 days following the effective date of the Grantor's registration statement, (b) the earliest date that, in the opinion of such underwriter, such adverse effect would no longer be caused, or (c) such date as the Grantor, managing underwriter and Optionee shall otherwise agree. In the event of such delay, the Grantor shall file such supplements and post-effective amendments and take any such other actions as may be necessary or appropriate to permit such Optionee to make its proposed offering and sale for a period of at least ninety (90) days commencing immediately following the end of such period of delay. If any party disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Grantor, the underwriter and the Optionee. Notwithstanding the foregoing, the Grantor shall not be required to include Shares within the coverage of a registration statement being filed pursuant to this Paragraph 7(a)(i) if, in the opinion of counsel for both the Grantor and Optionee, ail of the Shares proposed to be registered may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act. (ii) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of securities of the Grantor, and the underwriter thereof advises the Grantor in writing that in its opinion the number of Shares requested to be included in such registration statement exceeds the number which can be sold in such offering without materially adversely affecting the distribution of such securities, then the Grantor will include in such registration statement the securities requested to be included in such registration statement by selling securityholders on a pro rata basis, with such rights to inclusion being apportioned among the Optionee and the other holders of any other securities requesting registration according to the market value of Shares and other securities requested by them, respectively, to be registered. Notwithstanding the foregoing, the Grantor shall not be required 4 5 to include Shares within the coverage of a registration statement being filed pursuant to this Paragraph 9 (a) (ii) if, in the opinion of counsel for both the Grantor and Optionee, all of the Shares proposed to be registered may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act. (b) If at any time after November 30, 1996 and prior to the third (3rd) anniversary of the earlier of the expiration of the option herein granted and the purchase of the final Shares remaining subject to such option Shares issued or issuable upon exercise of the option herein granted are not then registered under one or more Piggyback Registrations and then covered by a prospectus complying with the requirements of the Securities Act, the Optionee may by written notice to the Grantor require Grantor to file a registration statement under the Securities Act covering such Shares as Optionee may specify in such notice. Optionee shall be entitled so to require Grantor to file a registration statement pursuant to this Paragraph 7 (b) on only one (1) occasion. The Grantor will file such a registration statement within ninety (90) days of receipt of such notice; and thereafter will prosecute such registration statement diligently to effectiveness; will cause such registration statement to become effective as promptly as practicable; will promptly file all such supplements and post-effective amendments to such registration statement and take any such other actions as may be necessary or appropriate to make available to Optionee on as continuous a basis as soon as practicable a prospectus meeting the requirements of the Securities Act through the earliest of (a) the date on which the final Shares have been sold and distributed by Optionee, (b) the date on which, in the opinion of counsel for both the Grantor and Optionee, all of the Shares which Optionee then holds may be immediately transferred pursuant to the provisions of Rule 144 under the Securities Act, and (c) May 29, 2003. In that regard, the Grantor makes no representations or warranties as to its ability to have any registration statement or post-effective amendment thereto declared effective. (c) In the event of any registration of a security pursuant to this Paragraph 7, the Grantor shall indemnify the Optionee and its officers and directors against all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus (and as amended or supplemented) relating to such registration, or caused by any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they are made unless such statement or omission was made in reliance upon and in conformity with information furnished to the Grantor by the Optionee expressly for use therein. The Optionee shall also indemnify the Grantor, its officers and directors and each underwriter of the Shares so registered with respect to losses, claims damages and Shares so registered with respect to losses, claims, damages and liabilities caused by an untrue statement or omission made in reliance upon and in conformity with information furnished by the Optionee to the Grantor in writing expressly for use in such registration statement or prospectus. (d) All expenses of any registration referred to in this Paragraph 7, except the fees and disbursement of counsel to the Optionee, underwriting commissions or discounts and any transfer or other taxes applicable to the transfer of Shares by the Optionee, shall be borne by the Grantor. 5 6 (e) Following the exercise of options hereunder, the Optionee shall promptly advise the Grantor when Optionee no longer holds any shares acquired through the exercise of options granted hereunder, and upon the request of the Grantor, the Optionee shall advise the Grantor from time to time of the number of Shares then held by Optionee which were acquired through the exercise of options granted hereunder. 8. Adjustments Upon Changes in Capitalization. (a) In the event of changes in the outstanding Common Stock of the Grantor by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, consolidations, combinations, exchanges of shares, separations, reorganizations, liquidations or any similar events or events having similar consequences, the number and class of Shares as to which the option may be exercised shall be correspondingly adjusted so that for the same aggregate exercise price the Optionee shall be entitled to acquire the securities and other property Optionee would have held if Optionee had exercised the option granted hereunder for the number of Shares under consideration prior to the first of such events to occur and continued to hold such Shares and all other securities and other property issued with respect thereto in connection with such events. No adjustment shall be made with respect to cash dividends or non-liquidating dividends payable in property other than cash, so long as Grantor provides Optionee with written notice of any such proposed dividend at least fifteen (15) days prior to the record date for such dividend. Grantor shall also give Optionee prompt written notice of any event resulting in an adjustment under this Paragraph 8(a), including a detailed computation of such adjustment. (b) Any adjustment in the number and kind of Shares and other securities shall apply proportionately to only the unexercised portion of the option granted hereunder at the time of the event given rise to the adjustment. If fractions of a Share would result from any such adjustment, the adjustment shall be revised to the next higher whole number of Shares so long as such increase does not result in the holder of the option being deemed to own more than 5% of the total combined voting power or value of all classes of stock of the Grantor or its subsidiaries, in which case the adjustment shall be revised to the next lower whole number of Shares. 9. Effect of Mergers, Consolidations or Sales of Assets. In the event Grantor should propose to merge or consolidate with, or engage in some other form of business combination with, any other corporation or entity on a basis in which Grantor is not to be the surviving entity, then as a condition precedent to proceeding with such merger, consolidation or other business entity, Grantor agrees to assume and perform all of Grantor's obligations under the right to acquire the same securities and property for the option exercise price specified herein as Optionee would have received if Optionee had exercised the option granted herein immediately prior to such merger, consolidation or other business combination. To the extent the above may be inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall be deemed interpreted so as to comply therewith. 6 7 10. No Rights in Option Stock. Optionee shall have no rights as a shareholder in respect of Shares as to which the option granted hereunder shall not have been exercised and payment made as herein provided. 11. Effect Upon Employment. This Agreement does not give the Optionee any right to employment by, or any other relationship with, the Grantor. 12. Binding Effect. Except as herein otherwise expressly provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors, legal representatives and assigns. 13. Miscellaneous. This Agreement shall be construed under the laws of the State of California applied to agreements made and to be performed entirely within such State. Headings have been included herein for convenience of reference only and shall not be deemed a part of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Pollution Research and Control Corp. By: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- ACCEPTED AND AGREED TO: By: /s/ ROBERT B. PRAG -------------------------------- Robert B. Prag 7 8 NOTICE OF EXERCISE OF OPTION TO PURCHASE SHARES TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned hereby exercises the option for the purchase of _____________________________ (____________) Shares with an exercise price of ___________________________ ($___________) according to the terms and conditions of that certain Non-Qualified Stock Option Agreement, dated as of May 30, 1996, between Pollution Research and Control Corp. and the undersigned (the "Agreement") and herewith makes payment of the exercise price in full in accordance with the terms of said Agreement by (check one): [ ] (i) payment in the form of cash or certified or bank cashier's check for the Shares so being purchased at the exercise price of ___________________________ ($__________) therefor as specified in Paragraph 2 of the Agreement; or [ ] (ii) these written directions to the Grantor to retain as consideration for the option exercise that number of the Shares (rounded upward to the next highest full Share) so being purchased which have an aggregate value (valued for such purpose at the mean between the high and low prices at which Shares traded in the principal market in which Shares trade on the trading day preceding the date on which this Notice is delivered to Pollution Research and Control Corp.) equal to the product derived by multiplying (a) the number of Shares so being purchased by (b) the exercise price _______________ ($______) therefor as specified in Paragraph 2 of the Agreement. The undersigned is purchasing such Shares for investment purposes only and not with a view to the sale or distribution thereof. Kindly issue the certificate for such Shares in accordance with the instructions given below. ---------------------------------- Signature Social Security or Taxpayer I.D. Number: ___________________________ Instructions for issuance of stock: - ------------------------------------------------------------------------------ Name - ------------------------------------------------------------------------------ Street Address - ------------------------------------------------------------------------------ City State Zip Code 8 EX-4.15 6 AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT 1 EXHIBIT 4.15 AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT This Amendment, dated July 31, 1996 and effective as of July 31, 1996, to the NON-QUALIFIED STOCK OPTION AGREEMENT dated May 30, 1996 granted to LIVIAKIS FINANCIAL COMMUNICATIONS, INC. ("Liviakis") from POLLUTION RESEARCH & CONTROL CORP., a California corporation (herein referred to as the "Company"). RECITALS WHEREAS, Company granted Liviakis a NON-QUALIFIED STOCK OPTION AGREEMENT on May 30, 1996 to purchase 1,500,000 shares of the Company's; and WHEREAS, Company and Liviakis desire to amend such NON-QUALIFIED STOCK OPTION AGREEMENT; NOW THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: The first paragraph of Item 3. is hereby amended as follows: 3. Exercise of Option. All of the options granted hereby shall first become exercisable on January 30, 1997. Subject to the provisions of Paragraph 4 hereof, such options shall be exercisable in whole or in part at any time and from time to time from the date on which they are first exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000. AGREED TO: "Company": POLLUTION RESEARCH & CONTROL CORP. Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR. ------------- ------------------------------ Albert E. Gosselin Chairman and CEO "Liviakis": LIVIAKIS FINANCIAL COMMUNICATIONS, INC. Date: 7/31/96 By: /s/ JOHN M. LIVIAKIS ------------- ------------------------------ John M. Liviakis President EX-4.16 7 AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT 1 EXHIBIT 4.16 AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT This Amendment, dated July 31, 1996 and effective as of July 31, 1996, to the NON-QUALIFIED STOCK OPTION AGREEMENT dated May 30, 1996 granted to ROBERT B. PRAG ("Prag") from POLLUTION RESEARCH & CONTROL CORP., a California corporation (herein referred to as the "Company"). RECITALS WHEREAS, Company granted Prag a NON-QUALIFIED STOCK OPTION AGREEMENT on May 30, 1996 to purchase 1,500,000 shares of the Company's; and WHEREAS, Company and Prag desire to amend such NON-QUALIFIED STOCK OPTION AGREEMENT; NOW THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: The first paragraph of Item 3. is hereby amended as follows: 3. Exercise of Option. All of the options granted hereby shall first become exercisable on January 30, 1997. Subject to the provisions of Paragraph 4 hereof, such options shall be exercisable in whole or in part at any time and from time to time from the date on which they are first exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000. AGREED TO: "Company": POLLUTION RESEARCH & CONTROL CORP. Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR. ------------- ------------------------------ Albert E. Gosselin Chairman and CEO "Prag": ROBERT B. PRAG Date: 7/31/96 By: /s/ ROBERT B. PRAG ------------- ------------------------------ Robert B. Prag EX-4.17 8 AMENDMENT TO CONSULTING AGREEMENT 5-30-96 1 EXHIBIT 4.17 AMENDMENT TO CONSULTING AGREEMENT DATED 5/30/96 This Amendment, dated July 31, 1996 and effective as of July 31, 1996, to the Consulting Agreement dated May 30, 1996 entered into by and between POLLUTION RESEARCH & CONTROL CORP., a California corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California corporation (herein referred to as the "Consultant"). RECITALS WHEREAS, Company and Consultant entered into a Consulting Agreement dated May 30, 1996 (the "Agreement"); and WHEREAS, Company and Consultant desire to amend such Consulting Agreement; NOW THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: Item (2.) of Paragraph 4.1 of the Agreement is hereby amended to read as follows: 2. The Options will be exercisable any time after January 30, 1997 and for the remainder of the four year period. The first paragraph of Item 3. of Exhibit "A" of the Agreement titled "NON-QUALIFIED STOCK OPTION AGREEMENT" is hereby amended as follows: 3. Exercise of Option. All of the options granted hereby shall first become exercisable on January 30, 1997. Subject to the provisions of Paragraph 4 hereof, such options shall be exercisable in whole or in part at any time and from time to time from the date on which they are first exercisable through 5:00 p.m. Glendale, CA time on May 29, 2000. AGREED TO: "Company": POLLUTION RESEARCH & CONTROL CORP. Date: 7/31/96 By: /s/ ALBERT E. GOSSELIN, JR. ------------ ------------------------------ Albert E. Gosselin Chairman and CEO "Consultant": LIVIAKIS FINANCIAL COMMUNICATIONS, INC. Date: 7/31/96 By: /s/ JOHN M. LIVIAKIS By: /s/ ROBERT B. PRAG ------------ ---------------------- ---------------------- John M. Liviakis Robert B. Prag President Sr. Vice President EX-4.18 9 SECOND AMENDMENT TO CONSULTING AGREEMENT 5-30-96 1 Exhibit 4.18 SECOND AMENDMENT TO CONSULTING AGREEMENT DATED 5/30/96 This Second Amendment to the Consulting Agreement dated May 30, 1996 entered into as of and effective August 28, 1996 by and between POLLUTION RESEARCH & CONTROL CORP., a California corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California corporation (herein referred to as the "Consultant"). RECITALS WHEREAS, Company and Consultant entered into a Consulting Agreement dated May 30, 1996 (the "Agreement"); and WHEREAS, the Company and Consultant amended such Agreement effective July 31, 1996; and WHEREAS, Company and Consultant desire to make a second amendment to such Agreement; NOW THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. Section 1. of the Agreement, "Term of Consultancy", is hereby amended to read in full as follows: Company hereby agrees to retain the Consultant to act in a consulting capacity to the Company, and the Consultant hereby agrees to provide services to the Company, for a term of seven (7) months commencing on May 30, 1996 and ending on December 31, 1996. 2. Section 2. of the Agreement, "Duties of the Consultant", is hereby amended by adding subsection (k) to read as follows: (k.) Commencing on October 1, 1996 and for the balance of the term of the Agreement, it is understood and agreed that Consultant in the performance of its duties hereunder will only be required to respond to inquiries regarding the Company, assist the Company in preparing and disseminating its press releases, and arrange for investor conference call presentations, and will not be required to make any proactive initiatives to create sponsorship in the Company's common stock. 3. Subsection 4.1 of the Agreement, "Remuneration", is hereby amended to read in full as follows: 4.1 For undertaking this engagement and for other good and valuable consideration, the Company agrees to issue and deliver to the Consultant a "Commencement Bonus" payable in the form of 1,300,000 options (the "Options") entitling the Consultant the right to purchase shares of the Company's Common Stock. The Option Agreements will be amended as promptly as possible to reflect the terms of this Subsection 4.1 as amended by the Second Amendment to the Agreement. Among other things, the Options will contain the following terms and conditions: 1. 1,000,000 of the Options will be exercisable at a price of ninety-four Cents ($.94); and 300,000 of the Options will be exercisable at a price of One Dollar and twenty five Cents ($1.25); 2. the Options will be exercisable any time after January 31, 1997 and for the remainder of the four year period; 3. the Options will contain no call and/or redemption provisions; 2 PRCC Second Amendment August 28, 1996 Page 2 of 2 4. the shares of common stock issuable upon the exercise of the Options will be included in the next appropriate registration done by the Company, which shall be no later than January 31, 1997. All registration costs shall be borne solely by the Company. 4. The Commencement Bonus shall be issued to the Consultant promptly following execution of this Agreement and shall, when issued and delivered to Consultant, be fully paid and non-assessable. The Company understands and agrees that Consultant has foregone significant opportunities to accept this engagement and that the Company has derived substantial benefit from the execution of this Agreement and the ability to announce its relationship with Consultant. The 1,300,000 Options issued as a Commencement Bonus, therefore, constitute payment for Consultant's agreement to represent the Company and are a nonrefundable, non-apportionable, and non-ratable retainer; such Options are not a prepayment for future services. Seventy-five percent (75%) of each of the various Options issued pursuant to this Agreement shall be evidenced by option agreements issued in the name of Liviakis Financial Communications, Inc. and twenty-five percent (25%) of each of the various Options issued pursuant to this Agreement shall be evidenced by option agreements issued in the name of Robert B. Prag ("Prag"). 5. It is acknowledged by the parties that the proposal to enter into this Second Amendment was solely that of the Company and not that of the Consultant, and that the Consultant has agreed to the terms of this Second Amendment at the request of the Company. Moreover, it is agreed and understood that the Consultant is in good standing with the Company and the Consultant has in no way committed any breach of the Consulting Agreement. Except as specifically modified herein, the Agreement as previously modified by the First Amendment thereto is hereby ratified and confirmed. "Company": POLLUTION RESEARCH & CONTROL CORP. Date: 8/30/96 By: /s/ ALBERT E. GOSSELIN ------- --------------------------- Albert E. Gosselin, Chairman and CEO "Consultant": LIVIAKIS FINANCIAL COMMUNICATIONS, INC. Date: 8/28/96 By: /s/ JOHN M. LIVIAKIS /s/ ROBERT B. PRAG ------- ---------------------- ------------------------ John M. Liviakis Robert B. Prag President Sr. Vice President EX-4.19 10 OPTION TO PURCHASE 120,000 SHARES COMMON STOCK 1 EXHIBIT 4.19 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 120,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000 This certifies that Albert E. Gosselin or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on May 31, 2000. Registered Owner: Albert E. Gosselin Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Albert E. Gosselin ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 120,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 120,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid market price on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that he is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) His overall commitment to investments that are not readily marketable is not disproportionate to his net worth, and his investment in PRCC will not cause such overall commitment to become excessive; (d) He has the financial ability to bear the economic risk of his investment, has adequate means of providing for his current needs and personal contingencies, and has no need for liquidity in his investment in PRCC; (e) He either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are 3 4 unaffiliated with, and not compensated by, PRCC and protect his interests in connection with the transaction; (f) He has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information he has desired in order to evaluate his investment, and to consult with such attorneys, accountants and other advisors as he has desired; (g) His residence set forth below is his true and correct residence, and he has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, he has relied solely upon independent investigations made by or on behalf of him; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) He understands that all the representations and warranties made by him herein, and all information furnished by him to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that he understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: 4 5 "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Albert E. Gosselin Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 5 6 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ Albert E. Gosselin --------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ Albert E. Gosselin ------------------------------------- Albert E. Gosselin 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. ____________________________ ____________________________ (Print Your Name) Signature 7 EX-4.20 11 OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.20 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000 This certifies that Gary L. Dudley or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on May 31, 2000. Registered Owner: Gary L. Dudley Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Gary L. Dudley ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 40,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 40,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid market price on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that he is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) His overall commitment to investments that are not readily marketable is not disproportionate to his net worth, and his investment in PRCC will not cause such overall commitment to become excessive; (d) He has the financial ability to bear the economic risk of his investment, has adequate means of providing for his current needs and personal contingencies, and has no need for liquidity in his investment in PRCC; (e) He either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect his interests in connection with the transaction; 3 4 (f) He has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information he has desired in order to evaluate his investment, and to consult with such attorneys, accountants and other advisors as he has desired; (g) His residence set forth below is his true and correct residence, and he has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, he has relied solely upon independent investigations made by or on behalf of him; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) He understands that all the representations and warranties made by him herein, and all information furnished by him to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that he understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER 4 5 FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Gary L. Dudley Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding 5 6 options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ Albert E. Gosselin ---------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ Gary L. Dudley ------------------------------------- Gary L. Dudley 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. ____________________________ ____________________________ (Print Your Name) Signature 7 EX-4.21 12 OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.21 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000 This certifies that Craig E. Gosselin or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on May 31, 2000. Registered Owner: Craig E. Gosselin Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Craig E. Gosselin ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 40,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 40,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid market price on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that he is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) His overall commitment to investments that are not readily marketable is not disproportionate to his net worth, and his investment in PRCC will not cause such overall commitment to become excessive; (d) He has the financial ability to bear the economic risk of his investment, has adequate means of providing for his current needs and personal contingencies, and has no need for liquidity in his investment in PRCC; (e) He either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect his interests in connection with the transaction; 3 4 (f) He has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information he has desired in order to evaluate his investment, and to consult with such attorneys, accountants and other advisors as he has desired; (g) His residence set forth below is his true and correct residence, and he has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, he has relied solely upon independent investigations made by or on behalf of him; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) He understands that all the representations and warranties made by him herein, and all information furnished by him to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that he understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER 4 5 FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Craig E. Gosselin Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding 5 6 options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ ALBERT E. GOSSELIN ------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ CRAIG E. GOSSELIN ------------------------------------- Craig E. Gosselin ------------------------------------- 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. ______________________________ ______________________________ (Print Your Name) Signature 7 EX-4.22 13 OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.22 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000 This certifies that Cynthia L. Gosselin or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on May 31, 2000. Registered Owner: Cynthia L. Gosselin Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Cynthia L. Gosselin ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 40,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 40,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid market price on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that she is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) Her overall commitment to investments that are not readily marketable is not disproportionate to her net worth, and her investment in PRCC will not cause such overall commitment to become excessive; (d) She has the financial ability to bear the economic risk of her investment, has adequate means of providing for her current needs and personal contingencies, and has no need for liquidity in her investment in PRCC; (e) She either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect her interests in connection with the transaction; 3 4 (f) She has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information she has desired in order to evaluate her investment, and to consult with such attorneys, accountants and other advisors as she has desired; (g) Her residence set forth below is her true and correct residence, and she has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, she has relied solely upon independent investigations made by or on behalf of her; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) She understands that all the representations and warranties made by her herein, and all information furnished by her to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that she understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER 4 5 FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Cynthia L. Gosselin Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding 5 6 options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ ALBERT E. GOSSELIN ------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ CYNTHIA L. GOSSELIN ------------------------------------- Cynthia L. Gosselin ------------------------------------- 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. ______________________________ ______________________________ (Print Your Name) Signature 7 EX-4.23 14 OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.23 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2000 This certifies that Marcia Smith or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on May 31, 2000. Registered Owner: Marcia Smith Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Marcia Smith ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 40,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 40,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid market price on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, 2 3 transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that she is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) Her overall commitment to investments that are not readily marketable is not disproportionate to her net worth, and her investment in PRCC will not cause such overall commitment to become excessive; (d) She has the financial ability to bear the economic risk of her investment, has adequate means of providing for her current needs and personal contingencies, and has no need for liquidity in her investment in PRCC; (e) She either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect her interests in connection with the transaction; 3 4 (f) She has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information she has desired in order to evaluate her investment, and to consult with such attorneys, accountants and other advisors as she has desired; (g) Her residence set forth below is her true and correct residence, and she has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, she has relied solely upon independent investigations made by or on behalf of her; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) She understands that all the representations and warranties made by her herein, and all information furnished by her to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that she understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER 4 5 FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non- assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Marcia Smith Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding 5 6 options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ Albert E. Gosselin ----------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ Marcia Smith -------------------------------------- Marcia Smith ______________________________________ 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. _______________________________ _______________________________ (Print Your Name) Signature 7 EX-4.24 15 OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.24 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 40,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MAY 31, 2002 This certifies that Margaret Jones or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of $1.10 per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on January 6, 2002. Registered Owner: Margaret Jones Purchase Price: $1.10 per share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of June 1, 1996 by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Margaret Jones ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 40,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 40,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.10 (the "Option Price"), and for purposes of record, the bid price of the Company's stock on this date was $.94. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate four (4) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time after the date hereof by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 2 3 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that she is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) Her overall commitment to investments that are not readily marketable is not disproportionate to her net worth, and her investment in PRCC will not cause such overall commitment to become excessive; (d) She has the financial ability to bear the economic risk of her investment, has adequate means of providing for her current needs and personal contingencies, and has no need for liquidity in her investment in PRCC; (e) She either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, 3 4 and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect her interests in connection with the transaction; (f) She has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information she has desired in order to evaluate her investment, and to consult with such attorneys, accountants and other advisors as she has desired; (g) Her residence set forth below is her true and correct residence, and she has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, she has relied solely upon independent investigations made by or on behalf of her; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) She understands that all the representations and warranties made by her herein, and all information furnished by her to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that she understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: 4 5 "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non- assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Margaret Jones 506 Paula Avenue Glendale, CA 91201 Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 5 6 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ Albert E. Gosselin, Jr. --------------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ Margaret Jones ------------------------------------- Margaret Jones _____________________________________ 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of ________________________________as to ____________________________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. ________________________________ ________________________________ (Print Your Name) Signature 7 EX-4.25 16 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.25 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and John Ann Hotchkiss, whose address is 4316 Marina City Drive, #G-104, Marina Del Rey, California 90292 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 291,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 291,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 291,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $175,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that she is able to bear the economic risk of this investment. 1.4 The Purchaser represents that she is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that she has prior investment experience, including investment in non-listed and non-registered securities, or she has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to her and to evaluate the merits and risks of such an investment on her behalf. 2 1.6 The Purchaser hereby represents that she has been furnished by the Company during the course of this transaction with all information regarding the Company which she had requested or desired to know; that all documents which could be reasonably provided have been made available for her inspection and review; that she has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of her investment in the Company, and any additional information which she had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act, The Purchaser represents that the Units, the Shares and the Warrant are being purchased for her own account, for investment, and not for distribution or resale to others. The Purchaser agrees that she will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Units, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon her investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if her representations merely meant that her present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with her representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of her name only when her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by her contained herein or in the Confidential Purchaser Questionnaire completed by her or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for her review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: /s/ JOHN ANN HOTCHKISS - ---------------------------------- POLLUTION RESEARCH AND CONTROL CORP., John Ann Hotchkiss a California corporation - ---------------------------------- 4316 Marina City Drive, #B-104 By: /s/ ALBERT E. GOSSELIN, JR. - ---------------------------------- --------------------------------- (Address) Albert E. Gosselin. Jr., President and Chief Marina Del Rey, California 90292 Executive Officer - ---------------------------------- (City, State, Zip) EX-4.26 17 WARRANT TO PURCHASE 291,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.26 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 291,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, John Ann Hotchkiss or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for her own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.27 18 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.27 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and David Firestone, whose address is 935 W. Duarte, #11, Arcadia, California 91007 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 166,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 166,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $100,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Units, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ DAVID FIRESTONE a California corporation - ---------------------------- David Firestone 935 W. DUARTE, #11 By: /s/ ALBERT E. GOSSELIN, JR. - ---------------------------- -------------------------------- (Address) Albert E. Gosselin, Jr., President and Chief ARCADIA, CALIFORNIA 91007 Executive Officer - ---------------------------- (City, State, Zip) EX-4.28 19 WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.28 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, David Firestone or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination, or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock an exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER, No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.29 20 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.29 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 12th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Irawan Onggara, whose address is Kalisari III/8, Surabaya, Indonesia (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 166,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 166,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $100,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who call afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know, that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ IRAWAN ONGGARA a California corporation - ------------------------ KALISARI III/8 By: /s/ ALBERT E. GOSSELIN, JR. - ------------------------ -------------------------------- (Address) Albert E. Gosselin, Jr., SURABAYA, INDONESIA President and Chief - ------------------------ Executive Officer (City, State, Zip) EX-4.30 21 WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.30 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Irawan Onggara or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same of different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be, any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock Purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.31 22 PURCHASE AGREEMENT DATED JUNE 14, 1996 1 EXHIBIT 4.31 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and John M. Liviakis, whose address is c/o Liviakis Financial Communications, Inc., 2118 "P" Street, Suite C, Sacramento, California 95816 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 166,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: 1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 66,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: John M. Liviakis The Company: /s/ JOHN M. LIVIAKIS POLLUTION RESEARCH AND CONTROL CORP., - ---------------------------- a California corporation c/o Liviakis Financial Communications, Inc. 2118 "P" Street, Suite C - ---------------------------- By: /s/ ALBERT E. GOSSELIN, JR., (Address) ---------------------------- Albert E. Gosselin, Jr., Sacramento, California 95816 President and Chief - ---------------------------- Executive Officer (City, State, Zip) EX-4.32 23 WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.32 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, John M. Liviakis or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: ALBERT E. GOSSELIN, JR. ---------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 8 SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, ________ shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to _______________________________________, whose address is __________________________________________ and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED:____________________ _______________________________ (Signature) Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. 8 EX-4.33 24 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.33 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14 day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Robert S. London, whose address is 212 Aurora Drive, Santa Barbara, California 93108 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 66,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 66,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein, or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (c) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof, Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ ROBERT S. LONDON a California corporation - ------------------------------- Robert S. London By: /s/ ALBERT E. GOSSELIN, JR. 212 Aurora Drive --------------------------------- - ------------------------------- Albert E. Gosselin, Jr., (Address) President and Chief Executive Officer Santa Barbara, California 93108 - ------------------------------- (City, State, Zip) EX-4.34 25 WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.34 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Robert S. London or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. ---------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.35 26 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.35 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Robert B. Prag, whose address is c/o Liviakis Financial Communications, Inc., 2118 "P" Street, Suite C, Sacramento, California 95816 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 66,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 66,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: 1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 66,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $40,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know, that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ ROBERT B. PRAG a California corporation - ---------------------------- Robert B. Prag By: /s/ ALBERT E. GOSSELIN, JR. ------------------------------- c/o Liviakis Financial Albert E. Gosselin, Jr., Communications, Inc. President and Chief 2118 "P" Street, Suite C Executive Officer - ---------------------------- (Address) Sacramento, California 95816 - ---------------------------- (City, State, Zip) EX-4.36 27 WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.36 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 66,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14,1999 This certifies that, Robert B. Prag or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised, In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books, The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise, and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. ------------------------------ Albert E. Gosselin, Jr., President and Chief Executive Officer 7 8 SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: --------------------------- ------------------------------ (Signature) ------------------------------ ------------------------------ Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. 8 EX-4.37 28 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.37 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Shawn Cady, whose address is 3764 Lakeview Boulevard, Lake Oswego, Oregon 97035 (the "Purchaser"). WITNESSETH: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: 1. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 41,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know, that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable, upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2. This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: [SIG] The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ Shawn Cady a California corporation - ------------------------------ 3764 Lakeview Boulevard By: /s/ ALBERT E. GOSSELIN, JR. - ------------------------------ --------------------------------- (Address) Albert E. Gosselin, Jr., President and Chief Lake Oswego, Oregon 97035 Executive Officer - ------------------------------ (City, State, Zip) EX-4.38 29 WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.38 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Shawn Cady or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this, Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation or sale, such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock Purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. --------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.39 30 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.39 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Donald Carstens, whose address is 3 Upper Newport Plaza, Newport Beach, California 92660 (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 41,667 Units and the Company agrees to sell the Unites to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could he reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: /s/ DONALD CARSTENS POLLUTION RESEARCH AND CONTROL CORP., - ------------------------------- a California corporation Donald Carstens 3 Upper Newport Plaza By: /s/ ALBERT E. GOSSELIN, JR. - ------------------------------- ------------------------------ (Address) Albert E. Gosselin, Jr., President and Chief Newport Beach, California 92660 Executive Officer - ------------------------------- (City, State, Zip) 6-16-96 EX-4.40 31 WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.40 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Donald Carstens or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.41 32 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.41 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Ling Nen Chuan, whose address is 4563 Petit Avenue, Encino, California 91436 (the "Purchaser"). W I T N E S S E T H : WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 41,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $25,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved, (c) The Shares and the Warrant included in the Unit have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: POLLUTION RESEARCH AND CONTROL CORP., /s/ LING NEN CHUAN a California corporation - ----------------------------- Ling Nen Chuan 4563 PETIT AVENUE - ----------------------------- By: /s/ ALBERT E. GOSSELIN, JR. (Address) -------------------------------- Albert E. Gosselin, Jr., ENCINO, CA 91436 President and Chief - ----------------------------- Executive Officer (City, State, Zip) EX-4.42 33 WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.42 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Ling Nen Chuan or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant, "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the time number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN JR. -------------------------------- Albert E. Gosselin Jr., President and Chief Executive Officer 7 EX-4.43 34 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.43 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 12th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices at 506 Paula Avenue, Glendale, California 91201 (the "Company") and Sanibel Capital Corporation, whose address is 129 East Wildwood Court, Grapevine, Texas 76051 (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 41,667 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 41,667 shares of Common Stock at an exercise price of $1.00 per share, and the Purchaser desires to acquire each Unit for a purchase price of $0.60. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 41,667 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $25,000 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that he is able to bear the economic risk of this investment. 1.4 The Purchaser represents that he is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to him and to evaluate the merits and risks of such an investment on his behalf. 2 1.6 The Purchaser hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he had requested or desired to know; that all documents which could be reasonably provided have been made available for his inspection and review; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of his investment in the Company, and any additional information which he had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a non-public offering pursuant to Section 4 (2) of the Act. The Purchaser represents that the Unit, the Shares and the Warrant are being purchased for his own account, for investment, and not for distribution or resale to others. The Purchaser agrees that he will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Unit, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if his representations merely meant that his present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer of the Shares or the Warrant out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Confidential Purchaser Questionnaire completed by him or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Unit have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for his review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: The Company: SANIBEL CAPITAL CORPORATION By: /s/ RANDY HOWELL POLLUTION RESEARCH AND CONTROL CORP., -------------------------- a California corporation Randy Howell 129 East Wildwood Court - ----------------------------- By: /s/ ALBERT E. GOSSELIN, JR. (Address) -------------------------------- Albert E. Gosselin, Jr., Grapevine, Texas 76051 President and Chief - ----------------------------- Executive Officer (City, State, Zip) EX-4.44 35 WARRANT TO PURCHASE 41,667 SHARES OF COMMON STOCK 1 EXHIBIT 4.44 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 41,667 OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Sanibel Capital Corporation or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.45 36 PURCHASE AGREEMENT, DATED JUNE 14, 1996 1 EXHIBIT 4.45 PURCHASE AGREEMENT POLLUTION RESEARCH AND CONTROL CORP. THIS PURCHASE AGREEMENT ("Agreement" herein) is entered into as of the 14th day of June 1996, between POLLUTION RESEARCH AND CONTROL CORP., a California corporation with its principal offices 506 Paula Avenue, Glendale, California 91201 (the "Company") and Donna Sizemore, whose address is 47 Blackhawk Club Court, Danville, California 84506 (the "Purchaser"). W I T N E S S E T H : WHEREAS, the Company elects to issue and sell units (the "Units") consisting of (i) 8,333 shares of Common Stock (the "Shares"), and (ii) one warrant (the "Warrant") to purchase up to 8,333 shares of Common Stock at an exercise price of $1.00, and the Purchaser desires to acquire each Unit for a purchase price of $0.60 per share. NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows: I. PURCHASE OF UNITS AND REPRESENTATIONS BY SUBSCRIBER. 1.1 Subject to the terms and conditions hereinafter set forth, the Purchaser hereby purchases 8,333 Units and the Company agrees to sell the Units to the Purchaser for a purchase price of $5,000.00 (the "Sale"). The purchase price is payable by a cashier's check made payable to the Company, or by wire transfer to an account determined by the Company contemporaneously with the execution and delivery of this Agreement. The Shares and the Warrant will be delivered by the Company to the Purchaser within ten (10) days following the execution of the Agreement. 1.2 The Purchaser recognizes that the purchase of the Units involves a high degree of risk in that an investment in the Company is highly speculative and only an investor who can afford to lose its entire investment in the Company should purchase the Units. 1.3 The Purchaser acknowledges that she is able to bear the economic risk of this investment. 1.4 The Purchaser represents that she is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"). 1.5 The Purchaser acknowledges that she has prior investment experience, including investment in non-listed and non-registered securities, or she has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to her and to evaluate the merits and risks of such an investment on her behalf. 2 1.6 The Purchaser hereby represents that she has been furnished by the Company during the course of this transaction with all information regarding the Company which she had requested or desired to know; that all documents which could be reasonably provided have been made available for her inspection and review; that she has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of her investment in the Company, and any additional information which she had requested. 1.7 The Purchaser hereby acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (the "Commission") since this offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act. The Purchaser represents that the Units, the Shares and the Warrant are being purchased for her own account, for investment, and not for distribution or resale to others. The Purchaser agrees that she will not sell or otherwise transfer such securities unless they are registered under the Act or unless an exemption from such registration is available. 1.8 The Purchaser understands that the Units, the Shares and the Warrant have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon her investment intention. In this connection, the Purchaser understands that it is the position of the Commission that the statutory basis for such exemption would not be present if her representations merely meant that her present intention was to hold such securities for a short period, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Purchaser realizes that, in the view of the Commission, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with her representation to the Company, and the Commission might regard such a sale or disposition as a deferred sale to which the exemption is not available. 1.9 The Purchaser consents that the Company may, if it desires, permit the transfer or the Shares or the Warrant out of her name only when her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state "blue sky" laws (collectively, the "Securities Laws"). The Purchaser agrees to hold the Company, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns, harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by her contained herein or in the Confidential Purchaser Questionnaire completed by her or any sale or distribution by the Purchaser in violation of any Securities Laws. 1.10 The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Shares, the Warrant and the Common Stock issuable upon exercise of the Warrant, stating that they have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale thereof. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. 3 REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY. The Company represents and covenants to the Purchaser that: (a) The Company is a corporation duly organized, existing and in good standing under the laws of the State of California which has the corporate power to conduct the business which it conducts and proposes to conduct. (b) The execution, delivery and performance of this Agreement by the Company has been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Shares and the Warrant have been duly taken and approved. (c) The Shares and the Warrant included in the Units have been duly and validly authorized and, when issued and paid for in accordance with the terms hereof, will be validly binding obligations of the Company enforceable in accordance with their respective terms except that the enforceability thereof may be limited by bankruptcy, insolvency, or other laws affecting the rights of creditors generally or by general equitable principles. (d) The Company will at all times during the term of the Warrant have duly authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of such Warrant. (e) The shares of Common Stock issuable upon exercise of the Warrant when issued and paid for in accordance with the terms of the Warrant will be duly and validly issued, fully paid and non-assessable. (f) The Company has obtained all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith. III. REGISTRATION OF SECURITIES. The Company acknowledges that it currently has an effective registration statement on Form S-3 (File No. 33-60035) (the "Registration Statement") on file with the Securities and Exchange Commission. The Company shall deliver to Purchaser at the Company's sole expense a copy of the Registration Statement, and all amendments thereto prior to the consummation of the Sale. In addition, the Company shall use its best efforts to register, at the Company's sole expense, the Shares and the shares of the Company's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares") pursuant to an amendment to the Registration Statement and provide Purchaser with a copy of such amended registration statement for her review prior to the effective date thereof. IV. MISCELLANEOUS. 4.1 Any notice or other communication given hereunder shall be deemed sufficient if in 4 writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at its principal office, 506 Paula Avenue, Glendale, California 91201, Attention: President, with a copy to Patricia Cudd & Associates, Attorney at Law, 50 South Steele Street, Suite #222, Denver, Colorado 80209, Attention: Patricia Cudd, and to the Purchaser at the address listed on the signature page hereof. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received. 4.2 This Agreement shall not be changed, modified or made except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 4.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them. 4.4 This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California, without regard to principles of conflicts of law. 4.5 This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Purchaser: /s/ DONNA M. SIZEMORE The Company: --------------------- POLLUTION RESEARCH AND CONTROL CORP., DONNA M. SIZEMORE a California corporation 42 BLACKHAWK CLUB COURT By: /s/ ALBERT E. GOSSELIN, JR. (Address) ---------------------------- Albert F. Gosselin, Jr. DANVILLE, CALIFORNIA 94506 President and Chief (City, State, Zip) Executive Officer EX-4.46 37 WARRANT TO PURCHASE 8,333 SHARES OF COMMON STOCK 1 EXHIBIT 4.46 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 8,333 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JUNE 15, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 14, 1999 This certifies that, Donna Sizemore or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on June 14, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for her own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: June 15, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-4.47 38 OPTION TO PURCHASE 25,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.47 THE OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. OPTION TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JULY 1, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JUNE 30, 1999 This certifies that Randy Foy or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar and 38/100 ($1.38) per share ("Purchase Price"). This Option is exercisable at any time to and including 5:00 p.m., Los Angeles time, on June 30, 1999. Registered Owner: Randy Foy Purchase Price: $1.38 per Share 1 2 OPTION AGREEMENT This Option Agreement (the "Agreement") is made and entered into effective as of July 1, 1996, by and between Pollution Research and Control Corp., a California corporation ("PRCC") and Randy Foy ("Optionee"). WHEREAS, Optionee has been providing valuable services as recognized by the Company's Board of Directors to PRCC and PRCC is desirous of having Optionee continue to provide such services to it; and WHEREAS, PRCC is willing to grant Optionee an option to purchase up to an aggregate of 25,000 shares of the no par value common stock of PRCC (the "Common Stock") under the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. GRANT OF OPTION. PRCC hereby grants to Optionee, as a matter of separate agreement and not in lieu of other compensation for services, the right and option (the "Option") to purchase on the terms and conditions set forth in this Agreement all or any part of up to an aggregate of 25,000 shares of Common Stock (the "Option Shares"). 2. OPTION PRICE. At any time when shares of Common Stock are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $1.38 (the "Option Price"), and for purposes of record, the bid market price on this date was $1.25. 3. OPTION PERIOD. The option period shall commence on the date of this Agreement (the "Date of Grant") and shall terminate three (3) years from the Date of Grant. 4. EXERCISE OF OPTION. The Option may be exercised in whole or in part at any time by delivering to the Chief Financial Officer of PRCC (a) a Notice and Agreement of Exercise of Option, substantially in the form attached hereto as Exhibit "A," specifying the number of Option Shares with respect to which the Option is exercised, and (b) full payment of the Option Price for such Shares. 5. SECURITIES LAWS REQUIREMENTS. The Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and no Shares may be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance 2 3 with the Act and any other applicable federal and state securities laws. Additionally, the Option and the Option Shares have not been qualified under the California Securities Law of 1968, as amended (the "California Law"). PRCC has no obligation to register the Option Shares under the Act or qualify the Option Shares under the California Law. Optionee acknowledges that he is aware that Rule 144 of the General Rules and Regulations under the Act ("Rule 144") affords a limited exemption from registration for the public resale of registered securities and under the terms of Rule 144 as currently in effect, the Shares received by Optionee may be sold to the public without registration only after a period of two (2) years has elapsed from the exercise date of the Option and then only in compliance with all other requirements of Rule 144 and the Act. Optionee hereby acknowledges, represents, warrants and agrees as follows: (a) That the Option and the Option Shares are not registered under the Act or qualified under the California Law, and the Option Shares shall be acquired solely for the account of Optionee for investment purposes only and with no view to their resale or other distribution of any kind; (b) Neither the Option nor any Option Share shall be sold or otherwise distributed in violation of the Act, the California Law or any other applicable federal or state securities law; (c) His overall commitment to investments that are not readily marketable is not disproportionate to his net worth, and his investment in PRCC will not cause such overall commitment to become excessive; (d) He has the financial ability to bear the economic risk of his investment, has adequate means of providing for his current needs and personal contingencies, and has no need for liquidity in his investment in PRCC; (e) He either: (i) has a preexisting personal or business relationship with PRCC or its officers, directors or controlling persons, or (ii) has evaluated the business of PRCC, the high risks of investing in PRCC, and the competitive nature of the business in which PRCC is engaged, and has the business or financial experience or has business or financial advisors who are unaffiliated with, and not compensated by, PRCC and protect his interests in connection with the transaction; 3 4 (f) He has been given the opportunity to review all books, records and documents of PRCC and to ask questions and receive answers from PRCC concerning PRCC's business, to obtain additional information necessary to verify the accuracy of the information he has desired in order to evaluate his investment, and to consult with such attorneys, accountants and other advisors as he has desired; (g) His residence set forth below is his true and correct residence, and he has no present intention of becoming a resident or domiciliary of any other state or jurisdiction; (h) In making the decision to accept the Option and/or purchase the Option Shares, he has relied solely upon independent investigations made by or on behalf of him; (i) No federal or state agency has made any finding or determination as to the fairness of an investment in PRCC; and (j) He understands that all the representations and warranties made by him herein, and all information furnished by him to PRCC, are true, correct and complete in all respects. 6. Optionee hereby acknowledges that he understands the meaning and legal consequences of the representations, warranties and covenants contained herein and that PRCC has relied on the representations made by Optionee in paragraph 5 hereof in granting this Option, and Optionee agrees to indemnify and hold harmless PRCC and its officers, directors, controlling persons, attorneys, agents and employees from and against any and all loss, damage or liability, together with all costs and expenses (including attorneys' fees and disbursements) which any of them may incur by reason of any breach in any representation, warranty, covenant or agreement contained herein. All representations, warranties, covenants and agreements, and the indemnification contained herein shall survive the grant of the Option and the issuance of the Option Shares by PRCC. 7. LEGEND ON CERTIFICATES. All Option Shares issued pursuant to this Agreement shall be subject to the provisions of this Agreement and the certificates representing such Option Shares shall bear the following legend or language substantially equivalent thereto: 4 5 "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SO REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION EXISTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY." 8. TRANSFERABILITY OF OPTION. The Option shall not be transferable except by the laws of descent and distribution and any attempt to do so shall void the Option. 9. ADJUSTMENT. The Option Price and the number and kind of Option Shares shall be subject to corresponding adjustment in the event of any change in the Common Stock by reason of any reclassification, recapitalization, split-up, combination, exchange of shares, readjustment or stock dividend, in like manner as if such Option Shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence. 10. PRIVILEGE OF OWNERSHIP. Optionee shall not have any of the rights of a shareholder with respect to the Shares covered by the Option except to the extent that one or more certificates for such Shares shall be delivered to him upon one (1) or more exercises of the Option. 11. NOTICES. Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to have been given upon personal delivery or two (2) business days after mailing the notice by postage, registered or certified mail. Such notice shall be addressed to the party to be notified as shown below: PRCC: POLLUTION RESEARCH AND CONTROL CORP. 506 Paula Avenue Glendale, CA 91201 Attn: President OPTIONEE: Randy Foy Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above. 5 6 12. GENERAL PROVISIONS. This Agreement: (a) Contains the entire agreement between PRCC and Optionee regarding options of PRCC to Optionee and supersedes all prior communications, oral or written; (b) Shall not be construed to give Optionee any rights as to PRCC or the Common Stock, except as specifically provided herein; (c) May not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (d) Shall be construed in accordance with, and governed by, the laws of the State of California; and (e) Shall be binding upon and shall inure to the benefit of PRCC and Optionee, and their respective successors and assigns, except that Optionee shall not have the right to assign or otherwise transfer his rights hereunder to any person. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. PRCC: POLLUTION RESEARCH AND CONTROL CORP., a California corporation By: /s/ ALBERT E. GOSSELIN, JR. -------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer OPTIONEE: /s/ RANDY FOY ------------------------------------ Randy Foy ------------------------------------ 6 7 EXHIBIT A To Pollution Research and Control Corp. NOTICE AND AGREEMENT OF EXERCISE OF OPTION I hereby exercise the Option granted to me by POLLUTION RESEARCH AND CONTROL CORP., a California corporation ("PRCC"), dated as of_______________ as to ________________ shares of PRCC's no par value Common Stock. Enclosed are the documents and payment specified in Paragraph 4 of my Agreement regarding the Option. - ---------------------------------- ---------------------------- (Print Your Name) Signature 7 EX-4.48 39 LETTER AGREEMENT, DATED SEPTEMBER 20, 1996 1 EXHIBIT 4.48 NEIL C. SULLIVAN 1901 Avenue of the Stars Suite 2000 Los Angeles, California 90067 September 20, 1996 Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 Re: Purchase of Stock and Warrants ------------------------------ Gentlemen: This will confirm the agreement between Pollution Research and Control Corp., a California corporation (the "Company"), and Neil C. Sullivan, an individual ("Sullivan"), with respect to the purchase by Sullivan of common stock and stock purchase warrants from the Company. In consideration for $300,000 cash, paid by Sullivan to the Company, the Company shall issue and deliver 350,000 shares of common stock (the "Shares") and warrants to purchase 300,000 shares of common stock at a price of $1.50 per share for a period of three years (the "Warrants"). The number of shares purchasable upon exercise of the Warrants (the "Warrant Shares") shall be adjusted to give effect to stock splits, stock dividends, combinations, reclassifications and similar changes affecting the outstanding common stock. The Company shall as soon as possible file a registration statement on Form S-3 under the Securities Act of 1933, as amended, (the "Act"), to register the Shares and the Warrant Shares and the Company shall use its best efforts to cause such registration statement to be declared effective as soon as possible and to maintain the effectiveness of said registration statement for a period of three years from its effective date. The Company shall pay all expenses, other than Sullivan's brokerage commissions or transfer taxes, relating to the registration of the Shares and the Warrant Shares. The Company agrees to indemnify and hold harmless Sullivan against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to which Sullivan may become subject under the Act or otherwise that arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement relating to the Shares and the Warrant Shares or any 2 September 20, 1996 Pollution Research Control Page 2 amendment thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent that any such untrue statement or alleged untrue statement or omission or alleged omission is made in reliance upon and in conformity with written information furnished to the Company by Sullivan expressly for use in such registration statement or any amendment thereto. The Company represents and warrants that (i) the Shares and the Warrant Shares, when issued and paid for, shall be duly authorized, validly issued, fully paid and nonassessable, and (ii) this agreement has been duly authorized by all necessary corporate action and is the valid and binding agreement of the Company, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws affecting creditors rights generally or by the principles governing the availability of equitable remedies. If this letter sets forth our understanding, please execute below and this letter will become a valid and binding agreement between us. /s/ NEIL C. SULLIVAN - ---------------------------------- Neil C. Sullivan Agreed this 20th day of September, 1996 POLLUTION RESEARCH AND CONTROL CORP. By: /s/ ALBERT E. GOSSELIN, JR. ----------------------------- Albert E. Gosselin, Jr., President EX-4.49 40 WARRANT TO PURCHASE 300,000 SHARES OF COMMON STOCK 1 EXHIBIT 4.49 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 300,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM SEPTEMBER 20, 1996 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 20, 1999 This certifies that, Neil C. Sullivan or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar ($1.50) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on September 20, 1999, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1 2 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this Warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for his own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that 2 3 holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, 3 4 reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the 4 5 Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same 5 6 Purchase Price and the same number of shares of Common Stock (approximately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 6 7 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: September 20, 1996 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ ALBERT E. GOSSELIN, JR. --------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer 7 EX-5.0 41 OPINION AND CONSENT OF PATRICIA CUDD & ASSOCIATES 1 EXHIBIT 5.0 PATRICIA CUDD & ASSOCIATES ATTORNEY AT LAW 50 SOUTH STEELE STREET, SUITE 222 DENVER, COLORADO 80209 TELEPHONE: (303) 394-2197 FAX: (303) 394-2251 October 14, 1996 Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 Gentlemen: We have acted as counsel to Pollution Research and Control Corp., a California corporation (the "Company"), in connection with the Registration Statement on form S-3 (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, on or about the date hereof. The Registration Statement relates to 3,240,003 shares of common stock, no par value per share (the "Common Stock") underlying the Company's outstanding options (the "Options") and warrants (the "Warrants") which may be issued upon exercise by the holders of all of the Options and Warrants on or prior to the various expiration dates thereof during the period from June 30, 1997, through January 6, 2002, and an additional 1,375,003 shares of Common Stock otherwise being offered by selling shareholders. In connection with this opinion, we have examined the Company's Articles of Incorporation; Certificates of Amendment to the Company's Articles of Incorporation; the Company's By-Laws; minutes of the Company's corporate proceedings, as made available to us by officers of the Company; an executed copy of such Registration Statement, and all exhibits thereto in the form filed with the Commission; and such matters of Law deemed necessary by us in order to deliver the within opinion. In the course of our examination, we have assumed the genuineness of all signatures, the authority of all signatories to sign on behalf of their principals, if any, the authenticity of all documents submitted to us as original documents, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof. As to certain factual matters, we have relied upon information furnished to us by officers of the Company. On the basis of the foregoing, and solely in reliance thereon, we are of the opinion that the shares of Common Stock have been duly authorized and, when issued for consideration received by the Company upon the exercise by the holders of the Options and Warrants and payment of the exercise price as provided in the Option and Warrants in accordance with the terms thereof, will be validly issued, fully-paid and nonassessable. We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the Prospectus which forms a part thereof. /s/ PATRICIA CUDD & ASSOCIATES EX-23.2 42 CONSENT OF GREENBERG & JACKSON 1 EXHIBIT 23.2 [GREENBERG & JACKSON LETTERHEAD] CONSENT We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 (the "Registration Statement") of Pollution Research and Control Corp. (the "Company") of the Company's Financial Statements and the related Notes thereto, including our report thereon dated March 6, 1996, set forth at pages F-1 through F-14 of the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1995. We further consent to the reference to our firm under the caption "Experts" in the Prospectus which forms a part of the Registration Statement. Greenberg & Jackson /s/ GREENBERG & JACKSON An Accountancy Corporation ---------------------------------- September 20, 1996 -----END PRIVACY-ENHANCED MESSAGE-----