-----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, BFnukVIUVOsVq+lEEdvTOnDrK2Euy6ji8HLbHLeOXG+g0G5GPskYNCWnHs8/VehV aL+UsN6qMIRrXRisS1QVqQ== 0001000096-00-000313.txt : 20000414 0001000096-00-000313.hdr.sgml : 20000414 ACCESSION NUMBER: 0001000096-00-000313 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 31 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000413 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: 10KSB SEC ACT: SEC FILE NUMBER: 001-09327 FILM NUMBER: 599842 BUSINESS ADDRESS: STREET 1: 506 PAULA AVE 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 10KSB 1 FORM 10-KSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) {X} Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) for the fiscal year ended December 31, 1999 { } Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) Pollution Research and Control Corp. ------------------------------------ (Name of Small Business Issuer as Specified in its Charter) California 95-2746949 ---------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 506 Paula Avenue, Glendale, California 91201 - -------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Small Business Issuer's telephone number, including area code (818) 247-7601 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value -------------------------- (Title of Class) Check whether the Small Business Issuer (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Small Business Issuer was required to file such reports), and (2) has been subject to such filing requirements of the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-KSB or any amendment to this Form 10-KSB {X}. Small Business Issuer's revenues for its most recent fiscal year: $7,314,976. The aggregate market value of the voting stock held by non-affiliates of the Small Business Issuer, computed by reference to the average bid and asked prices of such stock on April 6, 2000 was $12,000,000. Total number of pages - 396 Exhibit Index is located at Page E-1 DOCUMENTS INCORPORATED BY REFERENCE: Certain exhibits to this Annual Report as set forth in the Exhibit Index located at page E-1. 1 POLLUTION RESEARCH AND CONTROL CORP. Form 10-KSB For the Fiscal Year Ended December 31, 1999 TABLE OF CONTENTS Part I Page ---- Item 1. Description of Business 4 General 4 History of the Company 4 The Air Pollution Industry 5 Instrument Market 6 Control Market 6 Governmental Approval 7 Governmental Regulation and Enforcement 8 Company Products 8 Marketing and Sales; Backlog 9 Foreign Sales 10 Manufacturing and Purchasing 10 Research and Development 11 Employees 11 Competition 11 Intellectual Property 12 Item 2. Description of Properties 12 Item 3. Legal Proceedings 12 Item 4. Submission of Matters to a Vote of Security Holders 13 Part II. Item 5. Market for Common Equity and Related Stockholder Matters 14 Item 6. Management's Discussion and Analysis or Plan of Operation 14 Liquidity and Capital Resources 16 Seasonality 17 Item 7. Financial Statements 17 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 17 2 TABLE OF CONTENTS (continued) Part III Page ---- Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act 18 Directors, Executive Officers and Key Employees 18 Family Relationships 18 Business Experience 18 Section 16(a) Beneficial Ownership Reporting Compliance 20 Item 10. Executive Compensation 20 Executive Compensation 20 Compensation of Directors 21 Employment Agreements 21 Item 11. Security Ownership of Certain Beneficial Owners and Management 22 Item 12. Certain Relationships and Related Transactions 23 Item 13. Exhibits and Reports on Form 8-KA (a) Exhibits 24 (b) Reports on Form 8-KA 24 3 Item 1. Description of Business General The Company's core business for over twenty years has been primarily the design, manufacture and marketing of automated continuous monitoring instruments used to detect and measure various types of air pollution, such as "acid rain," "ozone depletion" and "smog episodes," through its wholly-owned subsidiary, Dasibi Environmental Corp. The Company's products are generally used to measure air pollution levels in geographic areas which range in size from small industrial sites to entire states or countries. The Company also supplies computer-controlled calibration systems that verify the accuracy of its instruments, data loggers to collect and manage pollutant information and final reporting software for remote centralized applications, which is classified as "core business related." Currently, the Company's primary market focus for its core business is The People's Republic of China. See "History of the Company and Recent Developments." History of the Company and Recent Developments The Company was organized as a California corporation on December 24, 1971, under the name of "A.E. Gosselin Engineering, Inc." as a wholly-owned subsidiary of "Pollution Research and Control Corp." ("PRCC"), a California corporation co-founded in 1966 by Albert E. Gosselin, Jr., the Company's President and Chief Executive Officer, and his wife, Barbara Gosselin, an executive officer and director of the Company. Mr. and Mrs. Gosselin founded the Company to design, manufacture and market air pollution monitoring equipment for ambient air (i.e., the surrounding air) as distinguished from the customer stack source monitoring systems then being designed, manufactured and sold by PRCC. The name of the Company was changed to "Dasibi Environmental Corp." on March 22, 1973. The Company was operated as a wholly-owned subsidiary of PRCC until its initial public offering of securities in May 1985. In 1984, PRCC discontinued its research and development activities and assigned them to the Company. From 1984 through May 1985, PRCC acted primarily as a holding company for the Company and Applied Conservation Technology, Inc. ("ACT"), then a wholly-owned subsidiary of PRCC engaged in the business of providing environmental impact reports to electric utilities. ACT was purchased by its management from PRCC in November 1986. Gary Dudley, a director and former Vice President of the Company and a former executive officer and director of PRCC, has been the President and a principal shareholder of ACT, a diversified environmental consulting firm now located in Westminster, California, since November 1986. (See Item 9. "Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act - Directors, Executive Officers and Key Employees.") The Company changed its name to "Pollution Research and Control Corp.," the name of its former parent, PRCC, in November 1989. In January 1990, the Company acquired all of the issued and outstanding shares of Common Stock, $1.00 par value per share, of an inactive California corporation, organized by Mr. and Mrs. Gosselin as co-founders under the name of "Baral Engineering, Inc." in July 1976, which changed its name to "Dasibi Environmental Corp." ("Dasibi") in January 1990. All of the Company's operations were transferred to Dasibi subsequent to the acquisition. Also in 1990, the Company changed its fiscal year from June 30 to December 31. 4 In January, 1998, the Company began a reorganization program. The Company's management believed that it could secure long-term contractual business in The People's Republic of China ("China") sufficient to allow expansion of the Company's business independent of competitive price pressures which have been experienced since 1994 (see "Instrument Market" under this Item 1). In June 1998, the Company signed a $5.1 million dollar contract with China to supply air monitoring equipment and software in integrated systems to monitor, report, and predict on local regions the air pollutant levels in an eleven city network designated as Phase I and related to a China monitoring plan for over 600 cities. The effective starting date was coincident with the Company's arrangement of U.S. Bank and Export-Import (Ex-Im) guarantee for financing which occurred in June 1999. A multitude of "firsts" or learning steps for all parties involved contributed to the length of the financing period. During this time, in March, 1999 the Company signed a letter of intent in Beijing, China with The State Environmental Protection Agency for Phase II , an additional 20 to 25 cities including expansion of the network of the eleven cities of Phase I. An indicated date for the contract signing of Phase II is April, 2000 and at this time appears likely. Since the Company has chosen to focus primarily on the China market, it is vital that a continuous flow of business be obtained. To date, this has not been the case and a need for a high level of staffing continuously has contributed to a profit and loss "checkerboard" pattern. Management believes that award of Phase II with such potential side effects as position for future phases and possible joint venture projects in China would allow continuous profitable operation. Loss of Phase II would have a material adverse effect on the Company. The Air Pollution Industry Air pollution consist of certain gases or particles, generally the products of combustion or other industrial processes, which are or may be hazardous to human health. Pollutants include carbon monoxide, ozone, oxides of sulfur and nitrogen, hydrogen sulfide and particles. Small amounts of these pollutants, such as a few parts per million or part per billion, may be harmful. The instruments produced and sold by the Company, the "core business" detect and measure these pollutants and are also utilized in calibrating other pollution measurement equipment. Any systems or processes such as the Company's "flue gas purification system" patent employ chemical and mechanical means to remove these same pollutants from combustion exhaust gases. (See "Research and Development" under this Item 1. "Description of Business"). Industrial entities require equipment to detect the presence and measure the level of pollutants in order to comply with governmental regulations and government regulatory agencies require equipment to enforce governmental standards. Currently, international priority has been given to control (and therefore to monitor) such gaseous pollutants as sulfur dioxide, oxides of nitrogen, carbon monoxide, ozone and particulates (suspended dust). Although manual sampling of both gases and particulates is still performed routinely, improvements in the reliability and accuracy of automated, continuous monitoring equipment, such as that manufactured and sold by the Company, have made manual sampling less desirable and automated monitoring increasingly common. 5 In basic continuous monitoring instruments, ambient air is taken into a manifold, the function of which is to direct a fast-moving stream of ambient air to the monitor. The instrument may use a filter to remove particulates or scrubbers to remove gasses that might interfere with accurate measurement of the pollutant. The pollutant is then introduced into a measurement cell environment where it undergoes a chemical or physical reaction, the output of which can be converted to an electrical signal which, in turn, can be read locally or transmitted to some remote monitoring plant or computer. Measurement cells can be based in many different methods for the detection of the pollutants of interest. Thus, an instrument designer may have many different methods available by which a pollutant may be identified and measured. Some methods used by the Company are flame photometry (wherein concentrations of gaseous elements are measured by burning them and optically observing the color and intensity of the flame generated thereby), infrared absorption (wherein concentrations of infrared absorbing gases are measured by detecting changes in intensity of a radiation beam closed cell), chemiluminescence (wherein a chemical generates a light or a wave length measurable by a photo multiplier tube), ultraviolet spectroscopy (wherein the pollutants' decrease in ultraviolet light intensity is converted by a photoelectric detector to an electric signal) and beta ray attenuation (wherein a radioactive source's beta ray emanation is reduced in direct proportion to the mass of a particle). Instrument Market The air pollution monitoring equipment market includes two markets: (i) source instrumentation for monitoring the source's pollutant emissions as they are discharged into the air and (ii) ambient air for instrumentation for monitoring ambient air pollution. The two markets are quite different in that source instrumentation is generally not subject to rigid governmental-imposed guidelines because of the difficult analyses involved, while ambient air instruments are subject to rigid governmental guidelines because the pollutants are easier to define and measure. Since 1994, the ambient market worldwide except for China, India, and the Philippines has approached saturation with extremely competitive bid situations which have significantly impacted gross profit margins. Since 1994, the Company has focused a majority of its world- wide marketing budget and effort to China, for cost efficient effect to improve gross profit margin. In 1998, the Company directed its entire marketing effort to China. Generally, the Company sells its instruments for use in systems for the measurement of ambient air pollution. In a system, air pollution monitoring instruments are united with additional equipment to provide a comprehensive measurement unit. In an ambient air instrumentation system, the monitoring instrument is combined with a manifold intake, a calibrator and data transmitters. The system samples the ambient air, measure the pollutants and transmits the data. The Company designs and manufactures all instruments used in a system, including the data tabulation and transmission devices. Control Market The air pollution control market makes only minimal use of measurement instrumentation. This market is concerned with "purification" of exhaust gases emanating from combustion-related or even chemical-only processes. The 6 "purification" process consists of using various types of equipment which may or may not involve catalysts and/or reagents to cause reactions and/or mechanical removal of a high percentage of selected air pollutants. The highest percentage obtainable will relate, at any given time, to the state-of-the-art of the technology involved and the economics of implementing the technology. The market is old, in essence dating to the beginnings of the industry when soot collectors were first installed on combustion chambers. However, the market size is embryonic since technology has not materially advanced and implementation remains costly so as not to allow any generally accepted control of source pollutants. The Company filed a patent application in April 1994 for a "flue gas purification system," which issued in 1996, and a second patent issued on the system in March, 1999, however, the commercial viability of a market for this invention is not assured. (See "Research and Development" and "Intellectual Property" under this Item 1. "Description of Business.") Governmental Approval The Environmental Protection Agency (the "EPA") administers the federal Clean Air Act, as amended by the Clean Air Act Amendments of 1990, and approves ambient air pollution monitoring equipment meeting certain requirements as either reference or equivalent methods for measuring pollutants. The EPA established the reference method as the basic method for measuring a pollutant. An equivalent method measures the same pollutant utilizing a different technique which achieves results identical to those of the referenced method. As a practical matter, before a monitoring instrument can be sold in the United States, it must receive EPA-approval as either a "reference" or "equivalent" method. Such approvals are given only after rigorous and expensive testing by the applicant and the submission to, and approval by, the EPA of the results of such testing. The testing and approval process generally requires between 12 and 18 months. Following approval, the EPA typically acquires and tests a production model of the device. If the model being tested does not meet the standards established by the approval process, the approval may be withdrawn. Each of the Company's models of ozone monitors and its sulfur dioxide and oxides of nitrogen monitors have been approved as equivalent methods by the EPA. Additionally, the Company's carbon monoxide have been approved as equivalent methods by the EPA. The Company is currently testing a particulate analyzer (beta ray attenuation) for approval as an equivalent method by the EPA. The Company has never had, or been threatened with, a recall as the result of subsequent testing by the EPA of a production model of any of its instruments. The Company believes that, as the performance of air monitoring equipment improves and monitoring technology becomes available in the market, government regulatory agencies tend to adopt regulations requiring the use of such technology. The Company has never been required to modify or discontinue any of its products as a result of improved technology. However, there can be no assurance that future technological improvements will not mandate changes in, or cause the obsolescence of, Company products. 7 Governmental Regulation and Enforcement Legislation requiring more precise air pollution monitoring and enforcement is increasing as the sophistication of the technology improves and as concern for the environment, particularly the depletion of the ozone layer, becomes more acute. The Clean Air Act and the Clean Air Act Amendments of 1990 (the "1990 Amendments"), require increased control of industrial air pollution and represent an increasing threat of shut-down for U.S. industrial concerns which fail to obtain necessary permits and engage in other conduct violative of the legislation. Because increased control requires increased management and monitoring of air pollutants by government and industry, the Company expects, but cannot assure, an increasing market for its products. Company management believes that governmental enforcement policy also has a significant effect on the demand for the Company's products. A relaxation during 1982 in the federal enforcement of governmental standards resulted in a decrease in demand for the Company's products. Since then, the worldwide trend toward increasingly stringent environmental standards for industrial air pollution together with stricter governmental enforcement of environmental regulations, is expected by management to cause continued expansion of segments of the analytical instruments market and a continued increase in demand for the Company's products. In essence, the Company furnishes a product that the customer does not want to buy voluntarily. In previous years, price difference was not significant to the selection process. Since 1994, sizeable discounts have become significant to the purchasers. Company Products In 1972, the Company developed, and in 1974 initially marketed, the first ultraviolet ozone monitor, of which eight models are currently marketed by the Company, including high concentration, manual, remote and microprocessor-controlled versions. The Company will continue to seek to develop new versions of its basic model of ozone monitor, but does not expect any change in the basic principle upon which the instrument operates. Since 1974 the Company has been generally considered the leader in ozone measurement technology in the world. The Company developed microprocessor-controlled carbon monoxide, sulfur dioxide and oxides of nitrogen monitors in 1981, 1986 and 1987, respectively. Calibration equipment, which is utilized to independently verify the measurements made by other monitoring equipment, was first manufactured and sold by the Company in 1976 and known as the "Auditor," was followed by a manually-operated, portable model which performs similar functions. In 1990, both of these models were superseded by the Company's Model 5008 state-of-the-art, programmable calibration equipment. The Company completed development, in 1991, of a Model 7001 beta-gauge to measure sub- micronic particulates, a Model 8001 data-logger to gather and transmit measured air pollutant information. In February 1994, the Company acquired the technology and inventory of the Byron Hydrocarbon Analyzer line which resulted in a completion of the ability to offer a System 1000. This analyzer is a micro- processor controlled, gas chromatograph type methane, non-methane analyzer designated as Model 302. 8 All instruments plus proprietary reporting and predictive software (See "Research and Development") comprise a System 1000 which can serve as a stand-alone satellite in a regional monitoring network. The Company offers a two-year warranty on all of its instruments, with the exception of certain components, such as lamps, which have short lives. With respect to such components, the Company passes on to the customer the warranty (usually one year) which it receives from the manufacturer. The Company's warranty provides for repair or replacement of defective products. During each of the last five fiscal years, the Company has been required to honor its warranty with respect to less than 0.3% of total instruments sales during each such year. Marketing and Sales; Backlog Instruments The marketing and sales activities of the Company include advertising by mail and in trade journals (primarily Pollution Equipment News and Air Pollution Control Association Journal) and attendance and exhibition at worldwide air pollution conferences. The Company attends the annual conference of the Air Pollution Control Association as well as worldwide conferences. The Company's core business instruments have been sold to customers world-wide, including industrial manufacturers; federal, state, city, local and foreign governmental agencies; major industrial companies; and educational and research institutions in over 30 countries. Sales made in the United States are handled directly by the Company's sales staff. Nearly all of the Company's foreign sales are made to distributors who, in turn, resell to the end users. The Company sells to these distributors at a discount from the listed price. Management believes that, normally, the loss of a distributor who may account for a large percentage of sales would have little impact on net revenues as the end users of the Company's products could be transferred to new distributors. An exception in foreign sales is China. Here the Company's distributor serves a dual role with primary emphasis on a role as a representative, when the Company sells direct to the government. The recent China contract (See "Foreign Sales") is a direct sale. Further, it is expected that a loss of this distributor or representative would have a materially adverse impact on the Company's revenues. Historically, foreign sales represented approximately 50 percent of the Dasibi Environmental subsidiary - the core business. Currently foreign sales account for approximately 85%. In 1999, one customer, China, accounted for 67% of the sale of the Company products. The Company's core business sales in the export market are evenly distributed among all of its products. Export sales are billed and paid in United States dollars only. In 2000, it is expected that one customer, China, may account for as much as 90% of the sale of the Company products. The Company's core business instruments have been sold during the past 10 years to over 500 customers in the U.S. and over 30 foreign countries and have been made up of a small percentage (3% to 5%) industrial manufacturers of Fortune 500 size, and the remaining percentage in state, city, local, federal, foreign governmental agencies, and educational and research institutions. The technological life of the largest selling instrument of the Company to nearly all of the referenced customers - the 1003-AH Ozone Monitor, is thirty years and counting - still ordered currently. Since 1994 a competitive price pressure by 9 large instrument manufacturers has resulted in continually declining sales with a corresponding loss in the total number of customers each year. Therefore while the percentages indicated above are fairly stable, the Company has reorganized to focus its marketing and sales efforts to a single, but largest market in the world. The Company now has a "base" core business of customers in the U.S. and around the world which is relatively small but requires only minimum marketing effort, and a potentially large China business which can be pursued efficiently. Historically, none of the Company's business has been subject to the re-negotiation of profits, and no government orders have ever been terminated. The indicated core business backlog at December 31, 1999 was approximately $400,000 which amount the Company considers immaterial. However, the Company has a letter of intent from China for approximately 10 to 12 million dollars. The Company believes that the contract will be signed during April, 2000 and that the project can be commenced no later than July, 2000. Commencement of the project before the end of July in the year 2000 is a material condition to the Company's profitability or loss status for the year 2000. Foreign Sales The following table sets forth certain information regarding the Company's foreign sales for the last two fiscal years: Year Ended December 31, ------------ 1999 1998 ---- ---- (In thousands) Aggregate sales to unaffiliated foreign customers: Europe and The United Kingdom $ 358 $ 987 Asia and Pacific Rim $5,200 $ 934 Latin America & Other $ 173 $ 397 During the fiscal year ended December 31, 1998 no one customer accounted for more than 10% of net sales. During fiscal 1999 China accounted for more than 65% of net sales. Historically, backlog has not been significant to the Company's operations because orders usually require delivery in 45 to 60 days. As of December 31, 1999, the Company had approximately $400,000 in "firm" orders which required delivery in 90 days or less, a backlog which the Company does not consider significant. Manufacturing and Purchasing The Company manufactures many components and subsystems for use in its products, including critical optical components and analog and digital 10 circuitry. Other components, including packaging materials, integrated circuits, microprocessors and minicomputers, are purchased from unaffiliated third parties. Most of the raw materials and supplies purchased by the Company are either available from a number of different suppliers or alternative sources could be developed without a materially adverse effect on the Company's business. However, the availability and quality of certain key instrument components, such as printed circuit board designs and lamps, are controlled by a limited number of vendors. A vendor's inability to supply these components to the Company in a timely fashion, or to the Company's satisfaction, can affect the Company's ability to deliver its instruments on time. Research and Development Historically, the Company has been actively engaged in research and development in order to produce new products. However, the competitive price pressures experienced by the Company since early 1994 have sharply limited the new product development to areas of software as opposed to hardware. Developed over the past three years, DECS (Dasibi Environmental Central Software) is a Windows-based, network control and reporting program for multi systems of pollutant analyzers and ancillaries. Similar programs exist but management believes none are under single manufacturer design and responsibility. Within the same constraints, the Company is developing predictive pollutant modeling programs. Because of competive price pressure budget restraints, the Company has been limiting Flue Gas Purification System development work. Employees As of April 6, 2000, the Company had 45 full-time employees, of whom 5 were engaged in administration, 7 in engineering, 31 in manufacturing and 2 in sales and marketing. None of the Company's employees are represented by a labor union. The Company has never had a strike or lockout and considers its employee relations to be good. Competition - Instruments The Company is the smallest competitor in the ambient air pollution instrumentation market. Therefore, it is subject to the effects of better-financed competitors and their research and development efforts, and price discounting. The Company competes on the basis of technical advances in its products and its reputation among customers as a quality provider of products and services. To a lesser extent, the Company competes on the basis of price. Although the Company is not aware of any other company that competes with it in all of its product lines and software capabilities, all of its competitors have resources substantially greater than those of the Company. There are also smaller companies that specialize in a limited number of the types of products manufactured by the Company. The Company's primary competitors in the domestic market are Thermo Instrument Systems, Inc. ("Thermo Instrument Systems") and Monitor Labs, Inc. ("Monitor Labs"). In the foreign market, the Company's primary competitors are Thermo Instrument Systems, Monitor Labs, Environnement S.A of France ("Environnement") and Horiba Instruments ("Horiba Instruments.") 11 Intellectual Property Although the Company obtained patents for its ozone monitor and various techniques in instrument design, it has generally been the Company's policy to proceed without patent protection since it is management's belief that the disclosure requirements of the federal patent laws provide competitors with easy access to the secrets of rapidly changing technology. The instrument patents obtained by the Company, all of which have expired, are not deemed by management to be significant to the Company's business operations or potential success. The Company has no federal or state registered trademarks and no franchises or concessions. The Company has common law rights to the trademark "Dasibi." Albert E. Gosselin, Jr., the Company's co-founder, has, for the past several years, devoted personal research time to developing an innovative, cost conscious system for purifying exhaust gases. His efforts resulted in the filing of a patent application for such system on behalf of the Company in April 1994, subsequently granted in September 1996, and a second grant in March, 1999, both assigned to the Company for $1.00. Item 2. Description of Properties In July 1994, the Company moved its administrative, instrument manufacturing and employee facilities to 39,070 square feet, increased to 45,000 square feet in 1997, at 506 Paula Avenue, Glendale, California. The Company leases the space from an unaffiliated third party for a term of ten years commencing as of July 1, 1994, at a base rent of $24,223 per month plus operating costs and taxes, with a provision for increases in the base rent related to increases in the Consumer Price Index to the present rent of $31,000 per month. The Company utilizes most of its existing office and manufacturing space and believes that such space is more than adequate for its needs for the foreseeable future. Item 3. Legal Proceedings New Era Capital, Inc. vs PRCC, DEC - ---------------------------------- Case No. E0028408 In November, 1999, Barry Soltani, a Director of the Company, filed a lawsuit against the Company alleging that certain monies are owed to him by the Company. The Company estimates Mr. Soltani's claim as approximately $100,000. The Company has answered the complaint, asserted a number of defenses and intends to defend itself vigorously in this matter. In December, 1999 the Company filed a cross complaint against Mr. Soltani alleging, among other items, that Mr. Soltani had breached his fiduciary duties as a Director. 12 Soltani, Etemad, Pic Computers etal vs PRCC, DEC - ------------------------------------------------ Case No. BC227020 In April, 2000, the above plaintiffs filed a lawsuit against the Company alleging breach of contract and fraud surrounding the purchase and return of a training facility or business property in Macau, China. The Company is unable to evaluate the value of the claim at this time. The Company has not yet answered the Complaint but believes it has a number of defenses in this matter and intends to defend itself vigorously. See Item 12. "Certain Relationships and Related Transactions." Taylor, Taylor & Dreifus vs PRCC - -------------------------------- No. 99-1100-CA01 Circuit Court Escambia, Florida In June, 1999, a lawsuit was filed against the Company by Taylor, Taylor, & Dreifus, a Florida general partnership alleging default by the Company under a promissory note and failing to make lease payments, all relating to the Nutek subsidiary bankruptcy of 1998. The amount of claim is estimated at $300,000. The Company is vigorously defending the litigation and has filed a counterclaim against the partnership alleging that the note and lease payments are not due because of fraudulent representations made at the time of acquisition of the Nutek business. No discovery has taken place at this time. Item 4. Submission of Matters to a Vote of Security Holders Not Applicable. 13 PART II Item 5. Market for Common Equity and Related Stockholder Matters The Company's Common Stock is traded over-the-counter in the NASDAQ System as NASDAQ Small Cap securities under the symbol "PRCC." Set forth below are the high and low closing bid quotations in the over-the-counter market for the Common Stock as reported by the relevant market makers for fiscal years 1999 and 1998. Quotations represent inter-dealer quotations, without adjustment for retail mark-ups, mark-downs or commissions, and may not necessarily represent actual transactions. Fiscal 1999 Fiscal 1998 Quarter Ended High Bid Low Bid High Bid Low Bid - ------------- -------- ------- -------- ------- Common Stock: March 31 $2.00 $ .88 $4.52 $2.52 June 30 2.38 1.06 3.13 2.48 September 30 3.87 1.81 2.25 .26 December 31 2.91 1.56 1.25 .56 As of April 6, 2000, the approximate number of shareholders of record of the Company's Common Stock was 1,100. The Company has never paid or declared any dividends on its Common Stock and does not anticipate paying dividends in the foreseeable future. A one for four reverse split of the Company's Common Stock was approved by shareholders during 1998 and all values pertaining to the Company's stock have been adjusted in this report. As of April 6, 2000, there are 4,235,085 shares of Common Stock outstanding, 1,093,206 warrants and 784,625 options. Item 6. Management's Discussion and Analysis or Plan of Operation 1999 - ---- The Company has been in a transitional operation phase since early 1998. Recent years have indicated that the Company's "base" core business is in the range of $2.6 million in revenues. During 1998, the Company demonstrated a self-sustaining break-even operation at this revenue with a total staff of 20 personnel. To handle the large China orders which are, at present, unpredictable, a total staff of 45 minimum is indicated. Therefore, until a "steady-state" flow of revenue from China is reached a monthly loss situation is expected for portions of each year. "Ramping-up" is not feasible in the employment market for technical personnel as has existed during the past eighteen months in the United States. Management believes that acceptance of a staggered profit-loss monthly operation is necessary to properly access the very large China market. In 1999, management estimates seven of the twelve months could be considered as accepted high fixed expense months in this transition effort. In 2000, each month to date has also been an accepted high fixed expense month with no China activity. 14 Financing when needed, even in the form of State or Federal guaranteed loans involves lending institutions' extremely high management fees. Non-guaranteed loans demand extremely high interest rates. Finally, equity placements require significant discounts and incentives. The combination of accepted high fixed expense months described above and the aforementioned high expenses associated with access to capital tend to lower the possible operational performance of fiscal 1999 and any subsequent year that may have minimum China market activity. Pro-formas for specific China performance have been and will continue to be used as a guide for maintaining acceptable gross profit margins. Net revenues in 1999 were $7,314,975 compared to $2,807,511 in 1998, a 161% increase. The increase was entirely due to China business. The revenues for the "base" core business were essentially the same as the year before. Gross margin was 30% of consolidated net revenues in 1999 compared to 35% of the consolidated revenues of 1998. The gross margin during the five months of full China operation has been estimated at approximately 44%, from pro-forma analysis. Selling, general and administrative expenses increased from a consolidated $1,583,679 in 1998 to $2,952,652 in 1999 due to increased staffing, related expense and commissions. A higher level of promotional charges during no China operation contributed an increase of approximately $246,000 in 1999, over 1998. The remaining increase is primarily due to an increase in commission and freight which is directly related to the increase in revenues. Research and development expense increased from $20,175 in 1998 to $70,830 in 1999 due to in-house technological advances in the Company's system work. Interest expense increased from $27,961 in 1998 to $336,675 in 1999, primarily due to the Company's inability to obtain bankable financing for higher levels of working capital required. Management fees from lending institutions (non-bankable penalties) were approximately $400,000 and is not comparable to 1998. Amortization of loan fees was $359,106. The combination of these factors amounted to approximately $760,000. Management believes that the Phase II contract in excess of $12 million will be awarded to the Company in April, 2000 and it is believed the project can be commenced within 60 days of the contract signing. Based on 1999 pro-forma analysis,over six months of China operation in 2000 should result in a profitable year-end. Further, the balance of the project extending into 2001 and currently indicated non- related China Phase II awards along with a strong indication of joint venture manufacture in China commencing in June, 2001 given extremely high probability of year round gross profit margins in the range of 44% which historically has proven profitable to the Company. 15 The Company, at December 31, 1999, has an approximate net operating loss carry-forward of $6 million. Based on the pro-forma 1999 results of the China operations and the above forecast, management believes that a deferred tax credit applied to its operating situation wherein as planned expenses for increased revenue and gross profit margin have been accepted and therefore a deferred tax credit is appropriate. The approximate $6 million net operating loss carry forward resulted in a $2,659,000 tax credit and was applied as a 1999 income tax benefit as an asset and an increase to operating income. Primarily as a result of the use of the loss carry forward, net income was $1,125,637 in 1999 compared to a net loss of $1,588,746 in 1998. Proforma estimates on the Company's subsidiary operation indicate an estimated $800,000 profit from core activities on revenues of $7,314,975 exclusive of financing limitations, excluding fixed expense of the non-China operation for 7 months of 1999, and including accrued expenses for year 2000 related China operations. 1998 and Prior - -------------- The Company's operating profit for fiscal 1994, 1995, 1996, 1997, and 1998 decreased significantly as compared to fiscal 1993. These declines were principally because of significant competitive price pressure for the Company's air pollution monitoring instruments, thus forcing the Company to lower its domestic and foreign bids, reducing the number of the Company's bids awarded and reducing the profit margin on the bids awarded to the Company. In the middle of 1996 two companies were acquired in an attempt to diversify the Company's technology and to increase profit margins. The Company's revenue overall increased in 1996 and 1997 due to these acquisitions, however, the profit margin did not increase and the additional overhead continued the downward trend for the Company. Beginning in the third quarter of fiscal 1994, the Company implemented certain cost reduction measures in its operating expenses, suspended major new product development efforts and scaled back its efforts to improve or modify existing technologies in response to the competitive price pressures. Throughout 1995 and 1996 the Company shipped record numbers of instrumentation units, but continued competitive pricing pressure resulted in lowered gross margins. In July 1996 the above acquisitions were completed. The program to diversify was deemed unsuccessful and a reorganization was begun in early 1998 consisting of the disposition of acquired subsidiary assets and a reduction of personnel. Management determined that the focus of its core business should be redirected to an attempt to achieve designated vendor status in the People's Republic of China. In June 1998 the Company was awarded the largest contract in its history, in excess of $5 million dollars, in a designated vendor's status. Due to banking factors outside of the control of the contractual parties no China contract revenues were obtained during 1998. Liquidity and Capital Resources The Company has historically financed operations through bank borrowings and the issuance of common stock in both public and private offerings. Since the Company has not been considered "bankable" the cost of money obtained from financial institutions has been relatively expensive. 16 Since January 1999, the Company has raised $1,210,654 in private placements which has resulted in the issuance of 1,277,538 shares of Common Stock and options and warrants for 867,538 shares. Working capital at December 31, 1999 was $1,346,211. Management believes that the anticipated cash flows from operations will be sufficient to meet the Company's cash needs for the next twelve months. As of April 6, 2000, the Company had no material commitments for capital expenditures. During 1999 and to date the Company entered into several loans with varying terms: A. $300,000 in three one year loans maturing June 1, 2000 with interest rate at 12% with unaffiliated individuals. B. One $500,000 Convertible Bond with interest at 18% due March 2000 and currently replaced with a $500,000 Convertible Loan with interest at a 12% interest rate due December, 2000. Convertible at $2.25 or 80% of market price, whichever is lower - no conversion applied for to this date. C. One $300,000 Convertible Bond with interest at 12% due June 1, 2000 convertible at $2.25 or 80% of market, whichever is lower. 119,108 shares have been converted to date at levels of $1.20 to $2.25. Balance of loan due is $75,000. D. One $500,000 Convertible Bond with interest at 12% due March 2001. Convertible at $2.00 or 80% of market price, whichever is lower - no conversion applied for to this date. Management believes that all of the above debt instruments can be satisfied or restructured if necessary. Cash increased from $63,952 at the end of 1998 to $214,206 at the end of 1999. Seasonality Management does not believe that the Company's business is seasonal. Item 7. Financial Statements The Company's Financial Statements and the related Notes thereto are set forth at pages F-1 through F-21. Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures Not applicable. 17 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act Directors, Executive Officers and Key Employees Set forth below are the names, ages, positions and business experience of the directors, executive officers and key employees of the Company and Dasibi Environmental Corp. Name Age Position(s) With Company And Dasibi ---- --- ----------------------------------- Albert E. Gosselin, Jr. 67 President, Chief Executive Officer and Chairman of the Board of Directors, President Dasibi Donald R. Ford 72 Chief Financial Officer Cynthia L. Gosselin 38 Operations Manager of Dasibi Marcia A. Smith 61 Director of Pollution Research and Control Corp.; Manager of Administration of Dasibi Environmental Corp. Gary L. Dudley 62 Director, Chairman & CEO of Dasibi Environmental Corp. Craig E. Gosselin 40 Director, Director of Dasibi Environmental Corp. Barry Soltani 43 Director All directors hold office until the next annual meeting of the Company's shareholders and until their successors have been elected and qualify. Officers serve at the pleasure of the board of directors. Family Relationships Albert E. Gosselin, Jr., is the parent of Craig E, and Cynthia L., Gosselin, both of whom are adults. All of the foregoing are presently serving as executive officers and/or directors of the Company. Except as set forth herein, no family relationship exists between or among any director or executive officer or the Company. Business Experience Albert E. Gosselin, Jr., has served as the President, Chief Executive Officer and Chairman of the Board of Directors of the Company (formerly "Dasibi Environmental Corp." and "A.E. Gosselin Engineering, Inc.") and Dasibi (formerly "Baral Engineering, Inc."), corporations which he co-founded with Barbara L. Gosselin, since the organization of those corporations in December 1971 and July 18 1976, respectively. Barbara L. Gosselin resigned as a Director on August 12, 1999 after being elected at the Annual Shareholders Meeting. He also served as the President, Chief Executive Officer and Chairman of the Board of Directors of the Company's former parent corporation, a corporation also named "Pollution Research and Control Corp. ("PRCC") which he co-founded with Mrs. Gosselin under the name of "A.E. Gosselin Engineering Co.," from its inception date in 1966 through the date of its spin-off in October 1986. Mr. Gosselin also served as the President, Chief Executive Officer and Chairman of the Board of Directors of Applied Conservation Technology, Inc. ("ACT"), a former wholly-owned subsidiary of Pollution Research and Control Corp. engaged in the business of providing environmental impact reports to electric utilities, together with the Company, from 1980 through the date of the purchase of ACT by its management from PRCC in November 1986. ACT is presently a diversified environmental consulting firm owned and managed by Gary L. Dudley, a Company director, and other members of management. Mr. Gosselin received a Bachelor of Science in mechanical engineering from Loyola University, Los Angeles, California, in 1954. He has been a registered mechanical engineer in the State of California since 1959. Donald R. Ford has served as a Director of the Company in the 1970's and has served as a director and corporate officer of several private companies since 1975. After leaving Price Waterhouse (now Price Waterhouse Coopers) in 1957 he practiced as a Certified Public Accountant primarily as a financial and business consultant to domestic and international companies. He received a B.S. in Marketing from the University of California, Berkeley in 1952. Cynthia L. Gosselin served as the Chief Financial Officer of the Company and Dasibi from May 1990 to January 1998, when she resigned those positions and became Operations Manager of Dasibi and the Company. Additionally, she has acted as Dasibi's Purchasing Agent since May 1990. She was employed by Dasibi in various capacities, including Production Manager, from 1983 through April 1990. Ms. Gosselin received a B.S. in business from the University of California at Long Beach in 1982. Marcia A. Smith has served as a director of the Company and Dasibi since May 1990. She has been employed as the Manager of Administration and in various other capacitities with Dasibi since 1979. Gary L. Dudley has served as a director of the Company during the periods since June 1991 and from 1980 through January 1991, and he served as the Company's Vice President from 1979 through November 1986. Mr. Dudley also served as an executive officer and a director of PRCC, the Company's former parent corporation, from 1984 through the date of the spin-off of PRCC in October 1986. Mr. Dudley has been the President and a principal shareholder of ACT, now located in Westminster, California, a diversified environmental consulting firm formerly wholly-owned, together with the Company, by PRCC, since the purchase of ACT by its management from PRCC in November 1986. He served as ACT's Vice President from 1980 through 1986. From 1962 through 1978, Mr. Dudley was employed in various engineering- related positions by Southern California Edison Company, TRW Systems, McDonnell Douglas Corporation and North American Rockwell Corporation. He received a Bachelor of Science in engineering from California State University in 1962 and a Masters Degree in Mechanical Engineering from the University of Southern California in 1966. Mr. Dudley is a registered mechanical engineer in the State of California and a member of the Association of Environmental Professionals. 19 Craig E. Gosselin has served as a director of the Company and Dasibi since October 1987. Mr. Gosselin is an attorney who has been licensed to practice law in the State of California since 1984. He has served as the Vice President and General Counsel of Vans, Inc., a publicly-held designer, distributor and retailer of footwear, snowboard boots, apparel and related accessories located in Santa Fe Springs, California, since July 1992. He received a Bachelor of Business Administration from Loyola Marymount University in 1981 and a Juris Doctor from Southwestern University School of Law in 1984. Barry Soltani received a PhD in economics from the University of California, Riverside in 1989, his Master's from the University of California, Riverside in 1983, and graduated from San Diego State University in 1981 with a B.B.A. in economics. Dr. Soltani has been directly involved in funding for industrial development projects in China and since 1993 has been an independent consultant in corporate finance for joint ventures in China. Dr. Soltani has served as a director of the Company since April 22, 1997. Since 1989 and to the present, he has served as the President and a director of PIC Computers, Ltd., Macau, which is engaged in the marketing, resale and wholesale distribution of computers and computer-related equipment. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's executive officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission initial reports of ownership, and reports of changes in ownership, of Common Stock and other equity securities of the Company. Executive officers, directors and greater than ten percent shareholders are required by Commission regulations to furnish the Company with copies of all Section 16(a) reports they file. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company, and representations that no other reports were required during the fiscal year ended December 31, 1999, the Company's executive officers, directors and greater than ten per cent beneficial owners of its Common Stock, complied with all Section 16(a) filing requirements applicable to them. Item 10. Executive Compensation Executive Compensation The following table sets forth the total cash and non-cash compensation paid by the Company for the fiscal years ended December 31, 1997, 1998, and 1999 to the Company's President and Chief Executive Officer who was the only executive officer of the Company whose aggregate cash compensation exceeded $100,000 for the 1999 fiscal year. 20
SUMMARY COMPENSATION TABLE Annual Compensation ------------------- Long Term Other Compensation Awards Name Accrued Accrued Annual Securities Underlying & Principal Position Year Salary Salary Bonus Compensation Options/SARs(#) - -------------------- ---- ------- ------ ----- ------------ ---------------- Albert E. Gosselin,Jr. 1999 $210,000 $97,866 -0- -0- -0- President, Chief 1998 $202,223 -0- -0- -0- -0- Executive Officer & 1997 $151,000 -0- -0- -0- -0- Chairman of the Board
The Company does not provide officers or employees with pension, stock appreciation rights, long-term incentive or other plans. Compensation of Directors Directors do not receive compensation pursuant to any standard arrangement for their services as directors. Employment Agreements The Company has employment agreements with Albert E. Gosselin, Jr., the President, Chief Executive Officer and Chairman of the Board of Directors of the Company, Cynthia L. Gosselin, and Marcia Smith. Mr. Gosselin's employment agreement (the "Agreement") was first approved by the Board of Directors on July 30, 1987, and has since been extended through August 31, 2003. The Agreement, as extended, provides for the payment to Mr. Gosselin of a base salary of $200,000, $210,000, 220,000, 230,000, 240,000 and $250,000 during the one-year periods ending August 31, 1998, 1999, 2000, 2001, 2002, and 2003 respectively. (See "Executive Compensation" under this Item 10. "Executive Compensation" hereinabove.) The Agreement further obligates the Company to permit Mr. Gosselin to participate in the Company's Employee's Incentive Stock Option Plan and Group Medical Plan and any other health, life insurance, group medical, disability income insurance and/or stock option plan adopted by the Company. Under the Agreement, Mr. Gosselin's salary continues in the event of his disability and for two years after his death. He is also entitled to a lump sum severance payment equivalent to 2.99 times his current salary in the event of his termination as President or Chief Executive Officer within eighteen months after a "change of control" of the Company, including, among other events, certain types of mergers and other business combinations, material changes in the composition of the Board of Directors or the beneficial ownership of the Common Stock, the sale of substantially all of the Company's assets or securities and the material downsizing or dissolution of the Company. If such an event occurs during fiscal 2000, Mr. Gosselin would be entitled to receive $657,800 as a severance payment. 21 Item 11. Security Ownership of Certain Beneficial Owners and Management The following table sets forth information as of April 6, 2000, regarding the ownership of the Company's Common Stock by each shareholder known by the Company to be the beneficial owner of more than five percent of its outstanding shares of Common Stock, each of the named executive officers, each director, and all executive officers and directors as a group. Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of Common Stock beneficially owned.
Name and Address of Beneficial Owner (1) Amount Beneficially Owned Percent of Class (2) - ---------------------------------------- ------------------------- -------------------- Ronald Patterson 681,049 (3) 16.0% Britannica Assoc. 300,000 (4) 7.0% Albert E. and Barbara L. Gosselin, Jr. 284,057 (5) 6.7% Lee N. Sion 286,000 (6) 6.7% Phillip Huss 320,948 (7) 7.5% Gary L. Dudley 47,500 (8) 1.1% Marcia A. Smith 30,320 (9) * Craig E. Gosselin 16,250 (10) * Barry Soltani -0- * All Executive Officers and Directors as a Group (five persons) 8.9
* Less than one percent (1) The address of Mr. Lee Sion is P.O. Box 910, Glendale, California 91209. The address of Mr. Ronald Patterson is 17 Prestile Place, Robbinsville, NJ 08691. The address of Brittanica Assoc. is 3rd Floor, Omar Lodge Building, Road Town, Tortola BVI. The address of Phillip Huss is 22 Cedar Court, Durango, Co 81301. The addresses of the rest of the individuals named above is 506 Paula Avenue, Glendale, California 91201. (2) Assumes the exercise of outstanding options and warrants specific to the referenced party, the denominator of which is made up of the outstanding shares of Common Stock plus those specific warrants and options. 22 (3) Includes 187,858 shares of Common Stock issuable upon the exercise of an option owned of record by Ronald Patterson and exercisable within 60 days. (4) Represents 300,000 shares of Common Stock issuable upon the exercise of options owned of record by Brittanica Assoc. and exercisable within 60 days. (5) Includes 73,250 shares of Common Stock issuable upon the exercise of options owned of record by Albert E. Gosselin, Jr. exercisable within 60 days. Does not include a total of 44,263 shares of Common Stock owned of record collectively by Craig. E., Cynthia L., and Jennifer Gosselin, the adult children of Albert E. and Barbara Gosselin, Jr., as to which Mr. and Mrs. Gosselin disclaim any beneficial interest. Mrs. Gosselin holds shares of Common Stock in a revocable trust of Barbara L. Gosselin to which Mr. Gosselin disclaims any beneficial interest. (6) Includes 46,875 shares of Common Stock issuable upon the exercise of options owned of record by Lee N. Sion which are exercisable within 60 days. (7) Includes 137,141 shares of Common Stock issuable upon the exercise of options owned of record by Phillip Huss and exercisable within 60 days. (8) Includes 27,500 shares of Common Stock issuable upon the exercise of options owned of record by Gary L. Dudley which are exercisable within 60 days. (9) Includes 28,750 shares of Common Stock issuable upon the exercise of an option owned of record by Marcia Smith, and exercisable within 60 days. (10) Craig E. Gosselin is the adult son of Albert E. and Barbara L. Gosselin, Jr., who disclaim any beneficial ownership of his shares and includes 15,000 shares of Common Stock issuable upon the exercise of options owned of record and exercisable within 60 days. Item 12. Certain Relationships and Related Transactions On May 8, 1998, the Company issued an aggregate of 100,000 and 20,000 shares of Series A Preferred Stock to each of Messrs. Albert E.Gosselin and Gary L. Dudley, executive officers and/or directors of the Company, respectively, in consideration for the amounts of $50,000 and $10,000 in cash, respectively. Each share of Series A Convertible Preferred Stock was converted into and exchanged for one share of Common Stock on March 17, 1999. In May 1998, the Company entered into an agreement to purchase a training facility in China from PIC Computers ("PIC"), a Macao Corporation, one of the 23 owners of which is Mr. B. Soltani, a Director of the Company, for a total consideration of 450,000 shares of the Company's Common Stock. In early 1999, Chinese environmental officials ruled that any facility in Macao could not be used due to internal visa problems. At that time final purchase procedures for the facility had not been completed. The facility was released back to PIC. The referenced stock was never released to PIC and was retired to the treasury. The owners of PIC dispute this result and have sues the Company. See Item 3 "Legal Proceedings." Item 13. Exhibits and Reports on Form 8-K (a) Exhibits The exhibits listed in the Exhibit Index located at Pages E-1 through E-24 are filed pursuant to Item 13(a) of this Report. (b) Reports on Form 8-K None. 24 SIGNATURES In accordance with Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: April 6, 2000 POLLUTION RESEARCH AND CONTROL CORP. (Registrant) By: /s/ Albert E. Gosselin, Jr. --------------------------- Albert E. Gosselin, Jr., President, Chief Executive Officer and Chairman of the Board of Directors In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and on the dates indicated. Date: April 6, 2000 /s/ Albert E. Gosselin, Jr. -------------------------------------- Albert E. Gosselin, Jr., President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) Date: April 6, 2000 /s/ Donald R. Ford -------------------------------------- Donald R. Ford, Chief Financial Officer, (Principal Financial and Accounting Officer) Date: April 6, 2000 /s/ Gary L. Dudley -------------------------------------- Gary L. Dudley, Director Date: April 6, 2000 /s/ Marcia A. Smith -------------------------------------- Marcia A. Smith, Director Date: April 6, 2000 /s/ Craig E. Gosselin -------------------------------------- Craig E. Gosselin, Director Date: April 6, 2000 Barry Soltani, Director 25 INDEX ----- Page ---- Independent Auditors' Report F-2 Consolidated Balance Sheet F-3 Consolidated Statements of Operations and Comprehensive Income (Loss) F-5 Consolidated Statements of Stockholders' Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-8 F-1 INDEPENDENT AUDITORS' REPORT Board of Directors Pollution Research and Control Corp. Glendale, California We have audited the accompanying consolidated balance sheet of Pollution Research and Control Corp. and Subsidiaries as of December 31, 1999, and the related consolidated statements of operations and comprehensive income (loss), stockholders' equity and cash flows for the years ended December 31, 1999 and 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Pollution Research and Control Corp. and Subsidiaries as of December 31, 1999, and the consolidated results of their operations and their cash flows for the years ended December 31, 1999 and 1998 in conformity with generally accepted accounting principles. AJ. ROBBINS, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS Denver, Colorado February 22, 2000 F-2 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET DECEMBER 31, 1999 ASSETS ------ CURRENT ASSETS: Cash $ 214,206 Accounts receivable, trade, less allowance for doubtful accounts of $33,350 1,101,690 Accounts receivable, related party 278,948 Inventories 1,387,711 Other current assets 123,861 ---------- Total Current Assets 3,106,416 ---------- PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 103,152 OTHER ASSETS 23,509 DEFERRED TAX ASSET, net 2,659,000 ---------- $5,892,077 ========== SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-3 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Continued) DECEMBER 31, 1999 LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable, trade $ 217,746 Accrued liabilities 252,093 Accrued settlement 308,949 Notes payable 300,000 Convertible debt 650,000 Accrued interest expense 31,417 ----------- Total Current Liabilities 1,760,205 DEFERRED RENT 43,602 ----------- Total Liabilities 1,803,807 ----------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, 20,000,000 shares authorized: Series A, $.01 par value, -0- shares issued and outstanding -- Series B, $.01 par value, -0- shares issued and outstanding -- Common stock, no par value, 30,000,000 shares authorized, 3,672,545 issued and outstanding 7,840,920 Additional paid-in capital 708,167 Accumulated (deficit) (4,460,817) ----------- Total Stockholders' Equity 4,088,270 ----------- $ 5,892,077 =========== SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-4
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 1999 1998 ----------- ----------- NET REVENUES $ 7,314,975 $ 2,807,511 COST OF GOODS SOLD 5,142,575 1,816,350 ----------- ----------- GROSS PROFIT 2,172,400 991,161 ----------- ----------- OPERATING EXPENSES: Selling, general and administrative 2,952,652 1,583,679 Research and development 70,830 20,175 ----------- ----------- Total Operating Expenses 3,023,482 1,603,854 ----------- ----------- (LOSS) FROM OPERATIONS (851,082) (612,693) ----------- ----------- OTHER INCOME (EXPENSE): Gain on sale of marketable securities -- 6,428 Other income 13,500 101,000 Interest income -- 6,029 Interest expense (336,675) (27,961) Amortization of loan fees (359,106) -- ----------- ----------- Net Other Income (Expense) (682,281) 85,496 ----------- ----------- (LOSS) FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES (BENEFIT) (1,533,363) (527,197) ----------- ----------- PROVISION (BENEFIT) FOR INCOME TAXES: Current -- -- Deferred (2,659,000) -- ----------- ----------- Total Provision (Benefit) for Income Taxes (2,659,000) -- ----------- ----------- INCOME (LOSS) FROM CONTINUING OPERATIONS 1,125,637 (527,197) ----------- ----------- (LOSS) FROM DISCONTINUED OPERATIONS: (Loss) from operations, less applicable income tax benefit of $-0- and $390,000 -- (115,301) (Loss) on disposal/abandonment, less applicable income tax -- (918,411) benefit of $-0- ----------- ----------- Total (Loss) From Discontinued Operations -- (1,033,712) ----------- ----------- NET INCOME (LOSS) 1,125,637 (1,560,909) ----------- ----------- OTHER COMPREHENSIVE LOSS: Foreign currency translation adjustment -- (24,587) Change in unrealized gain on marketable securities -- (3,250) ----------- ----------- Total Other Comprehensive Loss -- (27,837) ----------- ----------- COMPREHENSIVE INCOME (LOSS) $ 1,125,637 $(1,588,746) =========== =========== NET INCOME (LOSS) PER SHARE - Basic: Continuing operations $ .33 $ (.23) Discontinued operations: Loss from operations -- (.05) Loss on disposal -- (.40) ----------- ----------- Net income (loss) per share - Basic $ .33 $ (.68) =========== =========== Weighted Average Shares, Basic 3,438,418 2,283,093 =========== =========== NET INCOME (LOSS) PER SHARE - Diluted: Continuing operations $ .29 ----------- Net income (loss) per share - Diluted $ .29 =========== Weighted Average Shares, Diluted 4,168,924 =========== SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-5 POLLUTION RESEARCH AND CONTROL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 Series A Series B Common Stock Preferred Stock Preferred Stock --------------------- ----------------------- ---------------------- Shares Amount Shares Amount Shares Amount ----------- --------- --------- --------- --------- --------- Balances, December 31, 1997 2,168,433 $ 6,588,980 -- $ -- -- $ -- Sale of common stock, net of offering costs of $ 49,997 231,256 202,072 -- -- -- -- Sale of preferred stock -- -- 220,000 2,200 -- -- Issuance of preferred stock for the Technical Service Center -- -- -- -- 450,000 4,500 Forgiveness of notes (31,250) (86,857) -- -- -- -- Stock-based compensation expense recognized -- -- -- -- -- -- Change in unrealized gain on marketable securities -- -- -- -- -- -- Change in unrealized foreign currency translation loss -- -- -- -- -- -- Net (loss) for the year -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ---------- Balances, December 31, 1998 2,368,439 6,704,195 220,000 2,200 450,000 4,500 Sale of common stock, net of offering costs of $74,875 848,331 731,375 -- -- -- -- Conversion of preferred stock 670,000 6,700 (220,000) (2,200) (450,000) (4,500) Recission of purchase of Technical Service Center (450,000) (4,500) -- -- -- -- Issuance of common stock in partial settlement of debt 100,000 175,000 -- -- -- -- Conversion of convertible debt into common stock 85,775 150,000 -- -- -- -- Common stock issued for services 50,000 78,150 -- -- -- -- Stock based compensation for loan fees -- -- -- -- -- -- Net income for the year -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Balances, December 31, 1999 3,672,545 $ 7,840,920 -- $ -- -- $ -- =========== =========== =========== =========== =========== =========== F-6 (Continued on following page) POLLUTION RESEARCH AND CONTROL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued) FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 Unrealized Unrealized Foreign Notes Due Additional Gain on Currency Total From Sale Paid-in Accumulated Marketable Translation Stockholders' Of Stock Captial Deficit Securities Gain Equity -------- ------- ------- ---------- ---- ------ Balances, December 31, 1997 $ (86,857) $ 145,764 $(4,025,545) $ 3,250 $ 24,587 $ 2,650,179 Sale of common stock, net of offering costs of $49,997 -- -- -- -- -- 202,072 Sale of preferred stock -- 107,800 -- -- -- 110,000 Issuance of preferred stock for the Technical Service Center -- 595,500 -- -- -- 600,000 Forgiveness of notes 86,857 -- -- -- -- -- Stock-based compensation expense recognized -- 79,767 -- -- -- 79,767 Change in unrealized gain on marketable securities -- -- -- (3,250) -- (3,250) Change in unrealized foreign currency translation loss -- -- -- -- (24,587) (24,587) Net (loss) for the year -- -- (1,560,909) -- -- (1,560,909) ----------- ----------- ----------- ----------- ----------- ----------- Balances, December 31, 1998 -- 928,831 (5,586,454) -- -- 2,053,272 Sale of common stock, net of offering costs of $74,875 -- -- -- -- -- 731,375 Conversion of preferred stock -- -- -- -- -- -- Recission of purchase of Technical Service Center -- (595,500) -- -- -- (600,000) Issuance of common stock in partial settlement of debt -- -- -- -- -- 175,000 Conversion of convertible debt into common stock -- -- -- -- -- 150,000 Common stock issued for services -- -- -- -- -- 78,150 Stock based compensation for loan fees -- 374,836 -- -- -- 374,836 Net income for the year -- -- 1,125,637 -- -- 1,125,637 ----------- ----------- ----------- ----------- ----------- ----------- Balances, December 31, 1999 $ -- $ 708,167 $(4,460,817) $ -- $ -- $ 4,088,270 =========== =========== =========== =========== =========== =========== SEE ACCOMPANYING NTOES TO CONSOLIDATED FINANCIAL STATEMENTS F-6(A) POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 1999 1998 ----------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Reconciliation of net income (loss) to net cash flows (used in) operating activities: Net income (loss) $ 1,125,637 $(1,560,909) Loss on disposition/abandonment of operations -- 918,411 Depreciation and amortization 23,150 90,034 Deferred rent (14,532) (11,534) Deferred income taxes (2,659,000) -- Stock issued for services 78,150 -- Stock-based compensation expense -- 54,977 Stock issued for loan fees 309,106 -- Changes in operating assets and liabilities: Accounts receivable, trade, net (883,821) 8,384 Accounts receivable, related party (51,010) (20,389) Inventories 239,444 123,717 Due from factor 55,164 (55,164) Prepaid expenses (40,000) -- Other current assets (9,051) 4,769 Secured overdraft facility -- 22,794 Accounts payable, trade (38,947) 96,708 Accounts payable, officer -- (12,497) Accrued liabilities 199,397 (3,242) Customer advances -- (143,695) Other assets -- (14) ----------- ----------- Net Cash Flows (Used in) Operating Activities (1,666,313) (487,650) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, equipment and leasehold improvements (14,807) (1,919) Other -- 515 ----------- ----------- Net Cash Flows (Used in) Investing Activities (14,807) (1,404) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 806,250 252,069 Payment of offering costs (74,875) (25,207) Advances on notes payable 1,583,251 -- Payments on notes payable (1,283,251) (267,674) Advances on convertible debt 800,000 -- Payments of long term debt -- (15,565) Payments of long term debt - related parties -- (14,517) Proceeds from issuance of preferred stock -- 110,000 ----------- ----------- Net Cash Flows (Used In) Provided by Financing Activities 1,831,375 39,106 ----------- ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH -- (1,323) ----------- ----------- INCREASE (DECREASE) IN CASH 150,255 (451,271) CASH, beginning of year 63,951 515,222 ----------- ----------- CASH, end of year $ 214,206 $ 63,951 =========== =========== Supplemental Cash Flow Information: See Note 15 SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-7
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 1 - BUSINESS ACTIVITY Pollution Research and Control Corp., a California corporation, primarily designs, manufactures and markets air pollution monitoring instruments, through its wholly-owned subsidiary Dasibi Environmental Corporation ("Dasibi"). Pollution Research and Control Corp. had designed and manufactured electrical control panels and medical instrumentation through its wholly-owned subsidiaries Nutek, Inc. ("Nutek"), and Logan Medical Devices, Inc. ("LMD") and LMD's wholly owned subsidiary, Logan Research Limited ("LRL"), respectively. The operations of Nutek and LRL were discontinued in 1998 (Note 6). NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation - ------------- The consolidated financial statements include the accounts of Pollution Research and Control Corp. and its wholly-owned subsidiaries (the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. Revenue Recognition - ------------------- Revenue is recognized upon shipment of products. Inventories - ----------- Inventories are stated at the lower of cost (first-in first-out) basis or market. Property, Equipment and Leasehold Improvements and Depreciation - --------------------------------------------------------------- Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation is provided for on the straight-line method over the estimated useful lives of the assets, generally five to ten years. Amortization of leasehold improvements is over the shorter of the life of the lease or five years. Total depreciation expense was $23,150 and $28,591 for the years ended December 31, 1999 and 1998, respectively. Stock-Based Compensation - ------------------------ The Company accounts for stock based compensation in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). This standard requires the Company to adopt the "fair value" method with respect to stock-based compensation of consultants and other non-employees. The Company did not change its method of accounting with respect to employee stock options; the Company continues to account for these under the "intrinsic value" method, and to furnish the proforma disclosures required by SFAS 123. See Notes 10 and 11 for additional information with respect to stock-based compensation. F-8 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings per Share - ------------------ In 1997, the Financial Accounting Standards Board (FASB) issued Statement No. 128, "Earnings Per Share". Statement 128 replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods have been presented, to conform to Statement 128 requirements. Cash Equivalents - ---------------- For purposes of reporting cash flows, the Company considers all funds with original maturities of three months or less to be cash equivalents. Fair Value of Financial Instruments - ----------------------------------- The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these items. Impairment Of Long-Lived Assets - ------------------------------- The Company evaluates its long-lived assets by measuring the carrying amounts of assets against the estimated undiscounted future cash flows associated with them. At the time such evaluations indicate the future undiscounted cash flows of certain long-lived assets are not sufficient to cover the carrying value of such assets, the assets are adjusted to their fair values. Research and Development Costs - ------------------------------ Research and development costs are charged to operations as incurred. Research and development expense was $70,830 and $20,175 for the years ended December 31, 1999 and 1998, respectively. Income Taxes - ------------ Deferred income taxes are recorded to reflect the tax consequences in future years of temporary differences between the tax basis of the assets and liabilities and their financial statement amounts at the end of each reporting period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable for the current period and the change during the period in deferred tax assets and liabilities. The deferred tax assets and liabilities have been netted to reflect the tax impact of temporary differences. At December 31, 1999 no valuation allowance has been established for the deferred tax asset as management believes that it is more likely than not that a tax benefit will be realized. F-9 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of Estimates in the Preparation of Financial Statements - ----------------------------------------------------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassification - ---------------- Certain amounts reported in the Company's financial statements for the year ended December 31, 1998 have been reclassified to conform to the current year presentation. Year 2000 Issues - ---------------- Many computer systems and other equipment with embedded chips or microprocessors may not be able to appropriately interpret dates after December 31, 1999 because such systems use only two digits to indicate a year in the date field rather than four digits. If not corrected, many computers and computer applications could fail or create miscalulations, causing disruptions to the Company's operations. In addition, the failure of customer and supplier computer systems could result in interruption of sales and deliveries of key supplies or utilities. Because of the complexity of the issues and the number of parties involved, the Company cannot reasonably predict with certainty the nature or likelihood of such impacts. While the Company believes that its own internal assessment and planning efforts with respect to external service providers, suppliers, customers and financial institutions are and will be adequate to address its Year 2000 concerns, there can be no assurance that these efforts will be successful or will not have a material adverse effect on the Company's operations. Costs in connection with compliance were not significant. To date, the Company has not experienced any interruptions with respect to the Year 2000 issue, but cannot reasonably predict with certainty that they will not experience any interruptions. NOTE 3 - INVENTORIES Inventories at December 31, 1999 consisted of the following: Raw materials $ 809,176 Work in process 173,639 Finished goods 404,896 ------------- Total $ 1,387,711 ============= Inventories at December 31, 1999 include capitalized labor and overhead of $312,724. F-10 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 4 - PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Property, equipment and leasehold improvements at December 31, 1999 consisted of the following: Machinery and equipment $ 84,787 Furniture and fixtures 31,298 Leasehold improvements 194,196 ------------- 310,281 Less accumulated depreciation and amortization 207,129 ------------- $ 103,152 ============= NOTE 5 - DEFERRED RENT Upon execution of a 10 year lease for its present facility in Glendale, California commencing July 1, 1994, the Company was granted 6 months "free" rent. As required by generally accepted accounting principles, rent expense is being recognized by amortizing the total minimum rentals payable under the lease over the terms of the lease on a straight-line basis. The deferred rent shown on the balance sheet as of December 31, 1999 represents the excess of the total amount charged to rent expense over the amounts actually due and payable under the lease as of such date, of which $23,012 has been classified as current and $43,602 as long term, respectively. NOTE 6 - DISCONTINUED OPERATIONS Nutek - In April 1998, Nutek filed for protection under the Federal Bankruptcy Code. In June 1998, the Bankruptcy Court permitted the sale of Nutek's mortgaged property, to satisfy the working capital facility and term loan obligations to the major secured lender. The results of operations for Nutek for the respective periods are reported as a component of discontinued operations in the consolidated statements of operations. Additionally, the loss incurred on the disposition/abandonment of assets and liabilities is also presented separately as a component of discontinued operations. Logan Research, Ltd. - In February 1998, the Company disposed of LRL, through a return of 100% of LRL's stock to its original owner in exchange for release from a $300,000 note payable and $47,250 of related accrued interest. Unsecured advances from an officer of LRL were not repaid. The results of operations of LRL for the respective periods are reported as a component of discontinued operations in the consolidated statements of operations. Additionally, the gain (loss) incurred on the disposal of LRL is also presented separately as a component of discontinued operations. F-11 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 6 - DISCONTINUED OPERATIONS (Continued) Summarized results of operations for Nutek for the year ended December 31, 1998 was as follows: 1998 ----------- Net sales $ 731,636 ============ Operating loss $ 61,778 ============ Loss (income) on discontinued operations $ 82,133 ============ Summarized results of operations for LRL for the year ended December 31, 1998 was as follows: 1998 ------------ Net sales $ 49,313 ============ Operating loss $ 25,741 ============ Loss (income) on discontinued operations $ 33,168 ============ NOTE 7 - ACCRUED SETTLEMENT Under a settlement reached in 1998 and finalized in June 1999, the Company entered into a compromise settlement agreement with the previous major secured lender of Nutek to repay $468,000 through the issuance of 100,000 shares of the Company's common stock (valued at $1.75 per share on the date of issuance) and payment on February 1, 2000 of the remaining balance due, including interest accruing from the settlement date at 12% per annum. The shares were placed in escrow to be sold to reduce the balance owed under the settlement agreement. In addition, the Company issued warrants to purchase 20,000 shares of the Company's common stock at $.75 per share as an inducement to enter into the settlement agreement. The Company did not make its required payment in February 2000 and in March 2000 entered into amendment to the compromise settlement agreement and agreed to place $200,000 in escrow for the remaining balance owed. F-12 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 8 - NOTES PAYABLE AND CONVERTIBLE DEBT Notes payable consisted of the following at December 31, 1999: Note payable to an individual; interest at 11% per annum; principal and interest due May 2000; unsecured $ 100,000 Notes payable to individuals; interest at 12% per annum; principal and interest due May and June 2000; unsecured 200,000 ---------- $ 300,000 ========== Convertible debt consisted of the following at December 31, 1999: Convertible debenture; interest at 18% per annum due monthly; principal due February 2000; convertible at the lesser of 80% of the market price of the common stock on the date of conversion or 115% of the market price of the common stock on May 28, 1999 $ 500,000 Convertible debenture; interest at 12% per annum due monthly; principal due June 2000; convertible at the lesser of 80% of the market price of the common stock on the date of conversion or $2.25 150,000 ---------- $ 650,000 =========== NOTE 9 - INCOME TAXES The components of deferred tax assets and (liabilities) is as follows: 1999 ----------- Total deferred tax assets $ 2,661,000 Total deferred tax (liabilities) (2,000) ----------- Net deferred tax asset $ 2,659,000 =========== The provision (benefit) for income taxes consists of the following: 1999 ----------- Current $ -- Deferred (2,659,000) ----------- $(2,659,000) =========== F-13 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 9 - INCOME TAXES (Continued) The income tax provision (benefit) for the years ended December 31, 1999 and 1998 differs from the computed expected provision (benefit) at the federal statutory rate for the following reasons:
1999 1998 ------------ ------------ Computed expected income tax provision (benefit) $ (537,000) $ (165,000) Non-deductible meals and entertainment 15,000 3,000 Temporary differences for items deductible from (includible in) taxable income in future years: Depreciation 1,000 1,000 Inventory valuation allowance (14,000) (5,000) Bad debt allowance 10,000 -- State income taxes, net of federal income tax effect (59,000) (23,000) Net operating loss carryforward unutilized (utilized) 474,000 189,000 Stock-based expenses 110,000 -- Decrease in valuation allowance (2,659,000) -- ----------- ----------- Income tax provision (benefit) $(2,659,000) $ -- =========== ===========
The components of the deferred tax assets and (liabilities) as of December 31, 1999 were as follows: Deferred tax assets: Temporary differences: Allowance for doubtful accounts $ 13,000 Inventory valuation allowance 15,000 Accrued expenses 15,000 Loss on joint venture investment 66,000 Tax depreciation in excess of book depreciation (2,000) Net operating loss carryforward 2,552,000 ----------- Net long-term deferred tax asset $ 2,659,000 =========== F-14 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 9 - INCOME TAXES (Continued) The components of the deferred tax (expense) benefit were as follows for the years ended December 31, 1999 and 1998: 1999 1998 ----------- ------------ Allowance for doubtful accounts $ 11,000 $ 1,000 Inventory valuation allowance (16,000) 5,000 Accrued expenses 1,000 (1,000) Depreciation (1,000) 13,000 (Unutilization) utilization of net operating loss carryforward 474,000 (313,000) Change in valuation allowance 2,190,000 295,000 ----------- ----------- $ 2,659,000 $ -- =========== =========== As of December 31, 1999 the Company has net operating loss carryforwards available to offset future taxable income of approximately $6,600,000 expiring in 2008 through 2019. NOTE 10 - STOCKHOLDERS' EQUITY Issuance of Common Stock - ------------------------ On June 30, 1998, the Company sold 231,256 shares of common stock in a private placement, receiving net proceeds of $202,072 after paying offering costs of $49,997. In February 1999, the Company sold 288,331 shares of common stock in a private placement, receiving net proceeds of $199,375, after paying issuance costs of $16,875. In May 1999, the Company sold 300,000 shares of common stock in a private placement, receiving net proceeds of $229,500, after paying issuance costs of $25,000. In September 1999, the Company sold 260,000 shares of common stock in a private placement, receiving net proceeds of $302,750, after paying issuance costs of $33,000. Issuance of Preferred Stock - --------------------------- The Company is authorized to issue up to 5,000,000 shares of preferred stock, $.01 par value per share in series to be designated by the Board of Directors. On May 8, 1998, the Company issued 220,000 shares of Series A Preferred Stock for a purchase price of $.50 per share, resulting in proceeds to the Company of $110,000. These shares were converted into 220,000 shares of common stock in March 1999. The Series A Preferred Stock have voting rights but no dividend rights. F-15 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 10 - STOCKHOLDERS' EQUITY (Continued) Technical Service Center - ------------------------ During June 1998, the Company purchased a technical service facility in Macau, including 2 property units comprised of a modern office facility and a technical laboratory in exchange for 450,000 shares of its Class B Preferred Stock valued at $600,000. The facility was to be used to perform the training and technical servicing of the China Contract. During 1999, the Class B Preferred Stock was converted to common stock. The Company was advised by the China State Environmental Protection Agency (SEPA) that training must be done on the mainland of China. In October 1999, the Company rescinded the purchase of the Technical Service Center and retired the 450,000 shares of common stock, which had been placed in escrow pending the completion of the purchase. The Company does not believe it will have any settlement costs related to the rescission of the acquisition of the Technical Service Center. Consulting Agreement - -------------------- In July 1999, the Company issued 50,000 shares of common stock under a consulting agreement. Warrants - -------- In connection with the sale of common stock and debt financing, the Company granted warrants to purchase 363,331 shares of common stock at $.75 per share, 130,000 shares of common stock at $1.50 per share, 63,000 shares of common stock at $2.25 per share and 75,000 shares of common stock at $2.40 per share. F-16 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 10 - STOCKHOLDERS' EQUITY (Continued) The following table summarizes the activity of options and warrants for the two years ended December 31, 1999:
Weighted Average Number of Exercise Exercise Options Warrants Price Amount ------- -------- ----- ------ Outstanding, December 31, 1997 748,125 318,959 $ 4.27 $ 4,556,626 Granted 99,375 -- $ 1.82 180,563 Reduction to exercise price -- -- -- (622,644) Cancelled (3,750) -- $ 2.52 (9,450) Expired (6,250) (16,250) $ 6.51 (146,500) ----------- ----------- ----------- Outstanding, December 31, 1998 837,500 302,709 $ 3.47 3,958,595 Granted 117,000 651,331 $ 1.20 922,000 Expired (58,000) (302,709) $ 4.51 (1,627,000) ----------- ----------- ----------- Outstanding, December 31, 1999 896,500 651,331 $ 2.03 $ 3,253,595 =========== =========== ===========
NOTE 11 - STOCK-BASED COMPENSATION The Company accounts for stock based compensation in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation". The standard requires the Company to adopt the "fair value" method with respect to stock-based compensation of consultants and other non-employees, which resulted in charges to operations of $309,106 and $54,977 during the years ended December 31, 1999 and 1998, respectively. Additionally, $24,790 was capitalized as offering costs in connection with the private placement in 1998. During 1999, the Company capitalized $65,730 in loan fees. The Company did not adopt the fair value method with respect to employee stock options; the Company continues to account for these under the "intrinsic value" method. Had the Company adopted the fair value method with respect to options issued to employees as well, an additional $35,617 would have been charged to income in 1998; proforma net loss would have been $1,607,000 and net loss per share would have been $.70 on both a basic and diluted basis. F-17 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 11 - STOCK-BASED COMPENSATION (Continued) In 1998 the Board approved a reduction in the exercise price for options granted to certain employees, consultants, and other non-employees. Because of this, it was necessary to calculate the difference between the fair value of the modified option and the value of the old option immediately before the terms were modified. The Company did not adopt the fair value method with respect to employee stock options; the Company continues to account for these under the "intrinsic value" method. Had the Company adopted the fair value method with respect to options issued to employees as well, an additional $48,000 would have been charged to income in 1999; proforma net income would have been $1,077,687 and net income per share would have been $.31 on the basic basis and $.28 on the diluted basis. NOTE 12 - EARNINGS PER SHARE
For the Year Ended December 31, 1999 ------------------------------------ Per Income Shares Share (Numerator) (Denominator) Amount ----------- ------------- ------ Basic EPS Income available to common stockholders $1,125,637 3,438,418 $ .33 Effect of Dilutive Securities Convertible debt, options and warrants 88,500 730,506 (.04) ---------- ---------- ------- Diluted EPS Income available to common stockholders $1,214,137 4,168,924 $ .29 including assumed conversions ========== ========== =======
F-18 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 12 - EARNINGS PER SHARE (Continued)
For the Year Ended December 31, 1998 ------------------------------------ Per Income Shares Share (Numerator) (Denominator) Amount ----------- ------------- ------ Basic EPS (Loss) available to common stockholders $(1,588,746) 2,283,093 $ (.68) Effect of Dilutive Securities Options and warrants -- -- -- ----------- ----------- ------- Diluted EPS Income available to common stockholders $(1,588,746) 2,283,093 $ (.68) including assumed conversions =========== =========== =======
NOTE 13 - COMMITMENTS AND CONTINGENCIES Operating Leases - ---------------- The Company leases its facilities under long-term non-cancelable operating leases. The lease terms provide for increases in future minimum rental payments based on the Consumer Price Index, and an option to purchase during the lease term. Future minimum lease commitments as of December 31, 1999 are as follows: Year Ended Total December 31, Commitments ------------ ----------- 2000 $ 368,000 2001 348,000 2002 342,000 2003 337,000 2004 197,000 -------------- Total $ 1,592,000 ============== Total rentals under all operating leases charged against income amounted to $407,107 and $404,475 for the years ended December 31, 1999 and 1998, respectively. F-19 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued) Employment Agreements - --------------------- The Company is obligated to make certain minimum salary payments to the Chief Executive Officer and other employee/directors. All contracts expire in 2003, as follows: Year Ended December 31, Total ------------ -------------- 2000 $ 345,000 2001 345,000 2002 345,000 2003 230,000 -------------- Total $ 1,265,000 ============== Litigation - ---------- The Company is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company's financial position. NOTE 14 - RELATED PARTY TRANSACTIONS Prior to the disposal of LRL, the Company advanced $203,938 to this subsidiary. Additional advances of $75,000 were made during 1999. These advances are expected to be repaid from a joint venture relationship between the Company and LRL. NOTE 15 - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes was $-0- and $-0- during the years ended December 31, 1999 and 1998, respectively. Cash paid for interest was $151,878 and $103,746 during the years ended December 31, 1999 and 1998, respectively. During the year ended December 31, 1998, the company issued Series B preferred stock of $600,000 in connection with the purchase of the Tech Center. During the year ended December 31, 1998 the Company issued options valued at $24,790 in connection with the private placement. During 1999, the Company rescinded the purchase of the Tech center valued at $600,000 and 450,000 shares of the Company's common stock were cancelled. During 1999, $150,000 of convertible debt was converted to 85,775 shares of the Company's common stock. F-20 POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 NOTE 16 - CONCENTRATION OF CREDIT RISK Concentrations of credit risk with respect to trade receivables exist due to large balances with a few customers. At December 31, 1999, the accounts receivable balance from one significant customer was $632,012, or 57% of the total accounts receivable balance. Ongoing credit evaluations of customers' financial conditions are performed and generally no collateral is required. The Company maintains reserves for potential credit losses, and such losses in the aggregate have not exceeded management's expectations. Customers are located throughout the world. The Company maintains all cash in bank accounts, which at times may exceed federally insured limits. NOTE 17 - SUBSEQUENT EVENTS In February 2000, the Company issued a 12% convertible debenture for $500,000 due February 2001, with interest payable monthly. The debenture is convertible into the Company's common stock at the lesser of 85% of the market price of the common stock on the date of conversion or $2.00. In connection with the issuance of the debenture, the Company issued 100,000 shares of the Company's common stock as a loan fee. F-21
EXHIBIT INDEX Item Number Description 3.1 Articles of Incorporation of A. E. Gosselin Engineering, Inc. (now "Pollution Research and Control Corp.") (Incorporated herein by reference to Exhibit 3(a) to the Amendment No. 1 to the Registration Statement on Form 10 of Dasibi Environmental Corporation (now "Pollution Research and Control Corp.") 3.2 Certificate of Amendment of Articles of Incorporation of A. E. Gosselin Engineering, Inc. (now "Pollution Research and Control Corp.") (Incorporated herein by reference to Exhibit 3(a) to the Amendment No. 1 to the Registration Statement on Form 10 of Dasibi Environmental Corporation (now "Pollution Research and Control Corp.") 3.3 Certificate of Amendment of Articles of Incorporation of Dasibi Environmental Corp. (now "Pollution Research and Control Corp.")(Incorporated herein by reference to Exhibit 3(a) to the Amendment No. 1 to the Registration Statement on Form 10 of Dasibi Environmental Corporation (now "Pollution Research and Control Corp.") 3.4 By-laws of A. E. Gosselin Engineering, Inc. (now "Pollution Research and Control Corp.") (Incorporated herein by reference to Exhibit 3(a) to the Amendment No. 1 to the Registration Statement on Form 10 of Dasibi Environmental Corporation (now "Pollution Research and Control Corp.") 4.1 Form of Warrant Agreement. (Incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 33-26558 of Pollution Research and Control Corp., dated January 17, 1989.) 4.2 Form of Unit Purchase Warrant. (Incorporated herein by reference to Exhibit 4.2 to the Registration Statement on Form S-1 (File No. 33-26558 of Pollution Research and Control Corp., dated January 17, 1989.) 4.3 Form of Stock Purchase Warrant. (Incorporated herein by reference to Exhibit 4.3 to the Registration Statement on Form S-1 (File No. 33-26558 of Pollution Research and Control Corp., dated January 17, 1989.) 10.1 Warrant to Purchase 7,500 shares of Common Stock issued to Frost & Company P.S. on February 10, 1987. (Incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (File No. 33-26558) of Pollution Research and Control Corp., dated January 17, 1989.) 10.2 Employment Agreement, dated July 31, 1987, between Pollution Research and Control Corp. and Albert E. Gosselin, Jr. (Incorporated herein by reference to Exhibit 10.3 to the Registration Statement on Form S-1 (File No. 33-26558) of Pollution Research and Control Corp., dated January 17, 1989.) 10.3 Employees' Incentive Stock Option Plan. (Incorporated herein by reference to Exhibit 10.4 to the Registration Statement on Form S-1 (File No. 33-26558) of Pollution Research and Control Corp., dated January 17, 1989.) 10.4 Employment Agreement, as amended, dated August 19, 1989, between Pollution Research and Control Corp. and Albert E. Gosslein, Jr. (Incorporated herein by reference to Exhibit 10-28 to the Annual Report on Form 10-K for the fiscal year ended June 30, 1989.) 10.5 Lease, dated July 1, 1989, between Pollution Research and Control Corp. and Shahik Mardeross-ASL. (Incorporated herein by reference to Exhibit 10.30 to the Annual Report on Form 10-K for the fiscal year ended June 30, 1989.) 10.6 Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 10.14 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.) 10.7 Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Albert E. Gosselin, Jr., (Incorporated herein by reference to Exhibit 10.15 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.) 10.8 Stock Option Agreement, dated May 28, 1991, between Pollution Research and Control Corp. and Gary L. Dudley, (Incorporated herein by reference to Exhibit 10.13 to the Transition Report on Form 10-K for the transition period ended June 30, 1991.) 10.9 Agreement, dated November 1, 1991, between Pollution Research and Control Corp. and KVB, Inc. (Incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1991.) 10.10 Purchase Agreement, dated as of December 2, 1991, between Pollution Research and Control Corp. and CSC Industries, Inc. and affiliated companies Pension Plans Trust. (Incorporated herein by reference to Exhibit 10.7 to the Amendment No. 1 to the Registration Statment on form S-1 (File No., 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.11 Warrant, dated as of December 2, 1991, issued to CSC Industries, Inc. and affiliated companies Pension Plans Trust. (Incorporated herein by reference to Exhibit 10.8 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33- 43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.12 Purchase Agreement, dated as of December 9, 1991, between Pollution Research and Control Corp. and Richard M. Molinsky (Incorporated herein by reference to Exhibit 10.9 to the Amendment No. 1 to the Registration Statment on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.13 Warrant, dated as of December 9, 1991, issued to Richard M. Molinsky. (Incorporated herein by reference to Exhibit 10.10 to the Amendment No. 1 to the Registration Statment on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.14 Purchase Agreement, dated as of December 11, 1991, between Pollution Research and Control Corp. and Global Environment Fund. (Incorporated herein by reference to Exhibit 10.11 to the Amendment No. 1 to the Registration Statment on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.15 Warrant, dated as of December 11, 1991, issued to Global Enviroment Fund. (Incorporated herein by reference to Exhibit 10.7 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.16 Purchase Agreement, dated as of December 13, 1991, between Pollution Research and Control Corp. and Robert A. Tantleff (Incorporated herein by reference to Exhibit 10.13 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.17 Warrant, dated as of December 2, 1991, issued to Robert A. Tantleff. (Incorporated herein by reference to Exhibit 10.14 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.18 Purchase Agreement, dated as of December 16, 1991, between Pollution Research and Control Corp. and Stanley Baker. (Incorporated herein by reference to Exhibit 10.15 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.19 Warrant, dated as of December 16, 1991, issued to Stanley Baker. (Incorporated herein by reference to Exhibit 10.16 to the Amendment No. 1 to the Registration Statment on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.20 Purchase Agreement, dated as of December 16, 1991, between Pollution Research and Control Corp. and Bruce Lynch. (Incorporated herein by reference to Exhibit 10.17 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.21 Warrant, dated as of December 16, 1991, issued to Bruce Lynch. (Incorporated herein by reference to Exhibit 10.18 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.22 Purchase Agreement, dated as of December 16, 1991, between Pollution Research and Control Corp. and John Kilmartin. (Incorporated herein by reference to Exhibit 10.19 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.23 Warrant, dated as of December 16, 1991, issued to John Kilmartin. (Incorporated herein by reference to Exhibit 10.20 to the Amendment No. 1 to the Registration Statement on form S-1 (File No. 33-43124) of Pollution Research and Control Corp. dated December 23, 1991.) 10.24 Consulting Agreement, dated January 3, 1992, between Pollution Research and Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.24 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.) 10.25 Option Agreement, dated January 3, 1992, between Pollution Research and Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.25 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.) 10.26 Option Agreement, dated March 11, 1992 between Pollution Research and Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.26 to the Annual Report on Form 10-K for the fiscal year eneded December 31, 1992.) 10.27 Agreement, dated March 5, 1992, between Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 10.27 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.) 10.28 Option Agreement, dated June 22, 1992, between Pollution Research and Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.28 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.) 10.29 Option Agreement, dated June 22, 1992, between Pollution Research and Control Corp. and Total Software, Inc. (Incorporated herein by reference to Exhibit 10.29 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1992.) 10.30 Lease Agreement, dated June 1, 1992, between Dasibi Environmental Group. and Bernard C. Mills, Jr. (Incorporated herein by reference to Exhibit 10.30 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.31 Lease Agreement, dated January 6, 1994, between Dasibi Environmental Group. and the Prudential Insurance Company of America. (Incorporated herein by reference to Exhibit 10.31 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.32 Agreement, and Bill of Sale, dated February 18, 1994, between Pollution Research and Control Corp. and General Monitors, Inc. (Incorporated herein by reference to Exhibit 10.32 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.33 Stipulation of Settlement, dated February 1994, between Pollution Research and Control Corp. and Diversified Research Partners Limited Partnership. (Incorporated herein by reference to Exhibit 10.33 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.34 Requirements Contract dated March 10, 1994, between Pollution Research and Control Corp. and Logan Research, Ltd. (Incorporated herein by reference to Exhibit 10.34 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.35 Lease Agreement dated April 15, 1994, between Dasibi Environmental Corp. and Summit Park Associates. (Incorporated herein by reference to Exhibit 10.35 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.36 Amended Employment Agreement, effective August 31, 1993, between Pollution Research and Control Corp. and Albert E. Gosselin, Jr., (Incorporated herein by reference to Exhibit 10.36 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.37 Employment Agreement, dated July 20, 1994, between Pollution Research and Control Corp. and Cynthia L. Gosselin (Incorporated herein by reference to Exhibit 10.37 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.38 Final Judgment of Permanent Injunction and Other Relief as to Pollution Research and Control Corp. dated July 7, 1994 in Case Number 1.94CV01425, the Securities and Exchange Commission v. Pollution Research and Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.38 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.39 Final Judgment of Permanent Injunction and Other Relief as to Pollution Research and Contorl Corp. dated July 13, 1994 in Case Number 1.94CV01425, the Securities and Exchange Commission v. Pollution Research and Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.39 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.40 Consent of Albert E. Gosselin dated June 7, 1994, in Case Number 1.94CV01425, the Securities and Exchange Commission v. Pollution Research and Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.40 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.41 Final Judgment of Permanent Injunction and Other Relief as to Cynthia Gosselin,. dated July 13, 1994 in Case Number 1.94CV01425, the Securities and Exchange Commission v. Pollution Research and Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.41 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.42 Consent of Cynthia L.. Gosselin dated June 7, 1994, in Case Number 1.94CV01425, the Securities and Exchange Commission v. Pollution Research and Control Corp., Albert E. Gosselin and Cynthia Gosselin. (Incorporated herein by reference to Exhibit 10.41 to the Annual Report on form 10-KSB for the fiscal year ended December 31, 1994.) 10.43 Warrant to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp., dated January 22, 1990, issued to Marty Williams. ((Incorporated herein by reference to Exhibit 4.9 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.44 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp., of Marty Williams, dated effective June 6, 1994. ((Incorporated herein by reference to Exhibit 4.10 to the Registration Statement on form S-3 (Registration No., 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.45 Warrant to Purchase 202,500 Shares of Common Stock of Pollution Research and Control Corp., dated December 2, 1991, issued to CSC Industries, Inc. and affiliated companies. (Incorporated herein by reference to Exhibit 4.11 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.46 Amendment Warrant to Purchase Common Stock of Pollution Research and Control Corp., of CSC Industries, Inc. and affiliated companies Pension Plans Trust, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.12 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.47 Warrant to Purchase 67,500 Shares of Common Stock of Pollution Research and Control Corp., dated December 8, 1991, issued to Richard M. Molinsky. (Incorporated herein by reference to Exhibit 4.13 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.48 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp., of Richard M. Molinsky, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.14 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.49 Warrant to Purchase 135,000 Shares of Common Stock of Pollution Research and Control Corp., dated December 11, 1991, issued to Kingsley & Co. (formerly Global Environment Fund) (Incorporated herein by reference to Exhibit 4.15 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.50 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Kingsley & Co. (formerly Global Environment Fund), dated effective June 6, 194. (Incorporated herein by reference to Exhibit 4.16 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.51 Warrant to Purchase 67,500 Shares of Common Stock of Pollution Research and Control Corp., dated December 13, 1991, issued to A. Robert Tantleff. (Incorporated herein by reference to Exhibit 4.17 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.52 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of A. Robert Tantleff, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.18 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.53 Warrant to Purchase 101,250 Shares of Common Stock of Pollution Research and Control Corp., dated December 16, 1991, issued to Stanley Becker. (Incorporated herein by reference to Exhibit 4.19 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.54 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Stanley Becker, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.20 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.55 Warrant to Purchase 27,000 Shares of Common Stock of Pollution Research and Control Corp., dated December 16, 1991, issued to John Kilmartin. (Incorporated herein by reference to Exhibit 4.21 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.56 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of John Kilmartin, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.22 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.57 Warrant to Purchase 74,250 Shares of Common Stock of Pollution Research and Control Corp., dated December 16, 1991, issued to Bruce Lynch.. (Incorporated herein by reference to Exhibit 4.23 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.58 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Bruce Lynch, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.24 to the Registration Statement on form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.59 Warrant to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. of Michael Young, dated May 24, 1991. (Incorporated herein by reference to Exhibit 4.25 to the Registration Statement on form S-3 (Regsistration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.60 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Michael Young, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.26 to the Registration Statement on form S-3 (Regsistration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.61 Warrant to Purchase 12,000 Shares of Common Stock of Pollution Research and Control Corp., dated December 16, 1991, of Kennedy Capital Management, dated November 26, 1991. (Incorporated herein by reference to Exhibit 4.27 to the Registration Statement on form S-3 (Regsistration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.62 Amendment to Warrant to purchase Common Stock of Pollution Research and Control Corp. of Kennedy Capital Management dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.28 to the Registration Statement on form S-3 (Regsistration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.63 Pollution Research and Control Corp. Common Stock Purchase Warrant for the purchase of 60,000 shares of the Equity Group Inc. dated August 31, 1993. (Incorporated herein by reference to Exhibit 4.29 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.64 Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research and Control Corp. of Stanely Becker dated November 8, 1993. (Incorporated herein by reference to Exhibit 4.30 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.65 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Stanley Becker, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.31 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.66 Warrant to Purchase 5,500 Shares of Common Stock of Pollution Research and Control Corp. of Bruce Lynch dated November 8, 1993. (Incorporated herein by reference to Exhibit 4.32 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.67 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Bruce Lynch, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.33 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.68 Warrant to Purchase 7,500 Shares of Common Stock of Pollution Research and Control Corp. of Robert Tantleff dated November 8, 1993. (Incorporated herein by reference to Exhibit 4.34 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.69 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Robert Tantleff, dated effective June 6, 1994. (Incorporated herein by reference to Exhibit 4.35 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.70 Warrant to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. of Edward G. Lowell dated November 8, 1995. (Incorporated herein by reference to Exhibit 4.36 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.71 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. of Randy Foy dated as of July 4, 1994. (Incorporated herein by reference to Exhibit 4.37 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.72 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Frost and Company P.S. dated effective February 9, 1992. (Incorporated herein by reference to Exhibit 4.38 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.73 Amendment to Warrant to Purchase Common Stock of Pollution Research and Control Corp. of Kial, Ltd., dated effective January 9, 1992. (Incorporated herein by reference to Exhibit 4.39 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp. dated June 7, 1995.) 10.74 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. of Albert E. Gosselin, Jr., dated as of June 29, 1995 (Incorporated herein by reference to Exhibit 4.40 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.75 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Cindy Gosselin dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.41 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.76 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Barbara L. Gosselin dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.42 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.77 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Gary L. Dudley dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.43 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.78 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Marcia Smith dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.44 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.79 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Craig E. Gosselin dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.45 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.80 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. of Keith Gosselin dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.46 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.81 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. of Mike Chu dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.47 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.82 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. of Kimberly Chu dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.48 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.83 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. of Tolly Smith dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.49 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.84 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. of Randy Foy dated as of June 29, 1995. (Incorporated herein by reference to Exhibit 4.50 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.85 Option to Purchase 200,000 Shares of Common Stock of Pollution Research and Control Corp. of J. Paul Consulting Group dated effective July 18, 1995. (Incorporated herein by reference to Exhibit 4.51 to the Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 33-60035) of Pollution Research and Control Corp., dated January 17, 1996.) 10.86 Agreement dated June 11, 1996, among Logan Medical Devices, Inc., party of the first part, Ronald Bruce Logan-Sinclair and Howard George Vincent Cooke, parties of the second part, and Pollution Research and Control Corp., party of the third part. (Incorporated herein by reference to Exhibit 10.86 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.87 Employment Agreement dated June 11, 1996, between Logan Medical Devices, Inc. and Logan Research Ltd., on the one hand, and Ronald Bruce Logan-Sinclair, on the other hand. (Incorporated herein by reference to Exhibit 10.87 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.88 Guarantee dated effective June 11, 1996, by Logan Medical Devices, Inc. in favor of Namulas Pension Trustees Limited. (Incorporated herein by reference to Exhibit 10.88 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.89 Loan and Security Agreement dated June 28, 1996, between Logan Medical Devices, Inc., on the one hand, and Ronald Bruce Logan-Sinclair and Howard George Vincent Cooke, on the other hand. (Incorporated herein by reference to Exhibit 10.89 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.90 Nine Per Cent Debenture due June 28, 2,006, in the face amount of $285,714.29, bearing interest quarterly commencing June 30, 1998. (Incorporated herein by reference to Exhibit 10.90 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.91 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Phil Huss. Option Agreement, datedas of April 1, 1996 between Pollution Research and Control Corp. and Phil Hull. (Incorporated herein by reference to Exhibit 4.11 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.92 Consulting Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. (Incorporated herein by reference to Exhibit 4.12 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.93 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. (Incorporated herein by reference to Exhibit 4.13 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.94 Non-Qualified Stock Option Agreement dated as of May 30, 1996, between Pollution Research and Control Corp. and Robert B. Prag. (Incorporated herein by reference to Exhibit 4.14 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.95 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996, between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. (Incorporated herein by reference to Exhibit 4.15 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.96 Amendment to Non-Qualified Stock Option Agreement dated July 31, 1996, between Pollution Research and Control Corp. and Robert B. Prag. (Incorporated herein by reference to Exhibit 4.16 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.97 Amendment to Consulting Agreement dated 5/30/96 between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc., dated July 31, 1996. (Incorporated herein by reference to Exhibit 4.17 to the Registration Statement on Form S-3 (Registration No.33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.98 Second Amendment to Consulting Agreement dated 5/30/96 between Pollution Research and Control Corp. and Liviakis Financial Communications, Inc. dated as of August 28, 1996. (Incorporated herein by reference to Exhibit 4.18 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.99 Option to Purchase 55,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Aubrey Hornsby; Option Agreement dated as of May 31, 1996, between Pollution Research and Control Corp. and Aubrey Hornsby. (Incorporated herein by reference to Exhibit 10.99 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.100 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Ernestine Taylor; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. Ernestine Taylor. (Incorporated herein by reference to Exhibit 10.100 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.101 Option to Purchase 30,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Debbie Kendrick; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Debbie Kendrick. (Incorporated herein by reference to Exhibit 10.101 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.102 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Roland Fink; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Roland Fink. (Incorporated herein by reference to Exhibit 10.102 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.103 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Charles Conner; Option Agreement, dated as of May 31, 1996 between Pollution Research and Control Corp. and Charles Conner. (Incorporated herein by reference to Exhibit 10.103 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.104 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Patricia Cudd; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Patricia Cudd. (Incorporated herein by reference to Exhibit 10.104 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.105 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Jeffrey Harkey; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Jeffrey Harkey. (Incorporated herein by reference to Exhibit 10.105 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.106 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to James Bowers; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and James Bowers. (Incorporated herein by reference to Exhibit 10.106 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.107 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Michael Jones; Option greement, dated as of May 31, 1996, between Pollution Research Corp. and Michael Jones. (Incorporated herein by reference to Exhibit 10.107 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.108 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Charles McQuaig; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Charles McQuaig.(Incorported herein by reference to Exhibit 10.108 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.109 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Daniel Patanjo; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Daniel Patanjo. (Incorporated herein by reference to Exhibit 10.109 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.110 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Karen Perry; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Karen Perry. (Incorporated herein by reference to Exhibit 10.110 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.111 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Ricky Sonnier; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Ricky Sonnier. (Incorporated herein by reference to Exhibit 10.111 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.112 Option to Purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Victor Valerio; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Victor Valerio. (Incorporated herein by reference to Exhibit 10.112 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.113 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Spencer Abrams; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Spencer Abrams. (Incorporated herein by reference to Exhibit 10.113 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.114 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Dan Busby; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Dan Busby. (Incorporated herein by reference to Exhibit 10.114 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.115 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Frank Getautas; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Frank Getautas. (Incorporated herein by reference to Exhibit 10.115 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.116 Option to Purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Mitzi Narramore; Option Agreement, dated as of May 31, 1996, between Pollution Research and Control Corp. and Mitzi Narramore. (Incorporated herein by reference to Exhibit 10.116 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.117 Option to Purchase 300,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Ron Logan-Sinclair; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Ron Logan-Sinclair. (Incorporated herein by reference to Exhibit 10.117 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.118 Option to Purchase 123,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Albert E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Albert E. Gosselin. (Incorporated herein by reference to Exhibit 10.118 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.119 Option to Purchase 120,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Albert E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Albert E. Gosslein. (Incorporated herein by reference to Exhibit 4.19 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.120 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Gary L. Dudley; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Gary L. Dudley. (Incorporated herein by reference to Exhibit 4.20 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp.dated October 15, 1996.) 10.121 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Gary L. Dudley; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Gary L. Dudley. (Incorporated herein by reference to Exhibit 10.121 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.122 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Craig E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Craig E. Gosselin. (Incorporated herein by reference to Exhibit 4.21 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.123 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Craig E. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Craig E. Gosselin. (Incorporated herein by reference to Exhibit 10.123 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.124 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Cynthia L. Gosselin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Cynthia L. Gosselin. (Incorporated herein by reference to Exhibit 4.22 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996. 10.125 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Cynthia L. Gosslin; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Cynthia L. Gosselin. (Incorporated herein by reference to Exhibit 10.125 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.126 Option to Purchase 40,000 shares of Common Stock of Pollution Research and Control Corp. issued to Marcia Smith; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Marcia Smith. (Incorporated herein by reference to Exhibit 4.23 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.127 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Marcia Smith; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Marcia Smith. (Incorporated herehin by reference to Exhibit 10.127 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.128 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Margaret Jones; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Margaret Jones. (Incorporated herein by reference to Exhibit 4.24 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.129 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Margaret Jones; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Margaret Jones. (Incorporated herein by reference to Exhibit 10.129 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.130 Option to Purchase 37,500 Shares of Common Stock of Pollution Research Corp. issued to Lee Sion; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 10.130 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.131 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Patricia Cudd; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Patricia Cudd. (Incorporated herein by reference to Exhibit 10.131 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.132 Option to Purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Roland Fink; Option Agreement, dated as of June 1, 1996, between Pollution Research and Control Corp. and Roland Fink. (Incorporated herein by reference to Exhibit 10.132 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.133 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and John Ann Hotchkiss; Warrant to Purchase 291,667 Shares of Common Stock of Pollution Research and Control Corp. dated June 15, 1996, issued to John Ann Hotchkiss. (Incorporated herein by reference to Exhibits 4.25 and 4.26 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.134 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and David Firestone; Warrant to Purchase 166,667 Shares of Common Stock of Pollution Research and Control Corp. dated June 15, 1996, issued to David Firestone. (Incorporated herein by reference to Exhibits 4.27 and 4.28 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.135 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Irawan Onggara; Warrant to Purchase 166,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Irawan Onggara.(Incorporated herein by reference to Exhibits 4.29 and 4.30 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.136 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and John M. Liviakis; Warranto to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp. dated June 15, 1996, issued to John M. Liviakis. (Incorporated herein by reference to Exhibits 4.31 and 4.32 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.137 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Robert S. London; Warrant to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Robert S. London. (Incorporated herein by reference to Exhibits 4.33 and 4.34 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.138 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Robert B. Prag; Warranto to Purchase 66,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Robert B. Prag. (Incorporated herein by reference to Exhibits 4.35 and 4.36 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.139 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Shawn Cady; Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Shawn Cady. (Incorporated herein by reference to Exhibits 4.37 and 4.38 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.140 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Donald Carstens; Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996 issued to Donald Carstens. (Incorporated herein by reference to Exhibits 4.39 and 4.40 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.141 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Ling Nen Chuan; Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Ling Nen Chuan. (Incorporated herein by reference to Exhibits 4.41 and 4.42 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.142 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Sanibel Capital Corporation; Warrant to Purchase 41,667 Shares of Common Stock of Pollution Research and Control Corp. dated June 15, 1996, issued to Sanibel Capital Corporation. (Incorporated herein by reference to Exhibits 4.43 and 4.44 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.143 Purchase Agreement, dated as of June 14, 1996, between Pollution Research and Control Corp. and Donna Sizemore; Warrant to Purchase 8,333 Shares of Common Stock of Pollution Research and Control Corp., dated June 15, 1996, issued to Donna Sizemore. (Incorporated herein by reference to Exhibits 4.45 and 4.46 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.144 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Randy Foy; Option Agreement, dated as of July 1, 1996, between Pollution Research and Control Corp. and Randy Foy. (Incorporated herein by reference to Exhibits 4.47 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.145 Option to Purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Paul Richardson; Option Agreement, dated as of August 6, 1996, between Pollution Research and Control Corp. and Paul Richardson. (Incorporated herein by reference to Exhibit 10.145 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.146 Letter Agreement, dated as of September 20, 1996, between Pollution Research and Control Corp. and Neil C. Sullivan; Warrant to Purchase 300,000 Shares of Common Stock of Pollution Research and Control Corp. dated September 20, 1996, issued to Neil C. Sullivan. (Incorporated herein by reference to Exhibits 4.48 and 4.49 to the Registration Statement on Form S-3 (Registration No. 33-14133) of Pollution Research and Control Corp. dated October 15, 1996.) 10.147 Consulting Agreement dated November 19, 1996, between Pollution Research and Control Corp. and Fenway Advisory Group. (Incorporated herein by reference to Exhibit 10.147 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.148 Option to Purchase 400,000 Shares of Pollution Research and Control Corp. issued to Fenway Advisory Group; Option Agreement dated as of November 19, 1996, between Pollution Research and Control Corp. and Fenway Advisory Group. (Incorporated herein by reference to Exhibit 10.148 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1996.) 10.149 Option to purchase 40,000 Shares of Common Stock of Pollution Research and Control Corp. dated as of March 3, 1997 issued to Barry Soltani. (Incorporated herein by reference to Exhibit 10.149 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1997.) 10.150 Option to purchase 50,000 Shares of Common Stock of Pollution Research and Control Corp. dated as of April 30, 1997 issued to Jorel Management.(Incorporated herein by reference to Exhibit 10.150 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1997.) 10.151 Employment Agreement, dated June 9, 1997, between Pollution Research and Control Corp. and Marcia Smith. (Incorporated herein by reference to Exhibit 10.151 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1997.) 10.152 Amended Employment Agreement dated February 9, 1998 between Pollution Research and Control Corp. and Cindy Gosselin. (Incorporated herein by reference to Exhibit 10.152 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1997.) 10.153 Letter Agreement dated 3-10-98 to annul the acquisition of Logan Research Limited (LRL) by Logan Medical Devices (LMD). (Incorporated herein by reference to Exhibit 10.153to the Annual Report on Form 10K for the fiscal year ended December 31, 1997.) 10.154 Purchase Agreement dated May 8, 1998 between Pollution Research and Control Corp. and Albert E. Gosselin, Jr. to purchase 400,000 Shares of Preferred Convertible Stock. (Incorporated herein by reference to Exhibit 10.154 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.155 Purchase Agreement dated May 8, 1998 between Pollution Research and Control Corp. and Patricia Cudd to purchase 400,000 Shares of Preferred Convertible Stock. (Incorporated herein by reference to Exhibit 10.155 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.156 Purchase Agreement dated May 8, 1998 between Pollution Research and Control Corp. and Gary L. Dudley to purchase 80,000 Shares of Preferred Convertible Stock. (Incorporated herein by reference to Exhibit 10.156 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.157 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and William T. Richey to purchase 20,000 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.157 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.158 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Ronald E. Patterson to purchase 23,190 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.158 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.159 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Ronald E. Patterson to purchase 68,810 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.159 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.160 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Mayer Zarchi to purchase 20,000 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.160 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.161 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Fred J. Zalokar to purchase 23,000 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.161 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.162 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Frank T. Anaya to purchase 9,174 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.162 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.163 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Donald A. Carstens to purchase 9,082 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.163 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.164 Purchase Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Alan L. Talesnick to purchase 18,000 shares of Common Stock. (Incorporated herein by reference to Exhibit 10.164 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.165 Option to purchase 23,125 Shares of Pollution Research and Control Corp. issued to Phoenix Alliance, Inc.; Option Agreement dated June 19, 1998 between Pollution Research and Control Corp. and Phoenix Alliance, Inc. (Incorporated herein by reference to Exhibit 10.165 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.166 Agreement to purchase a technician service center in Macau from PIC Computers, Ltd. Agreement dated as of June 24, 1998 between Pollution Research and Control Corp. and PIC Computers, Ltd. (Incorporated herein by reference to Exhibit 10.166 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.167 Option to purchase 13,750 Shares of Common Stock issued to Marcia Smith; Option Agreement dated as of December 14, 1998 between Pollution Research and Control Corp. and Marcia Smith. (Incorporated herein by reference to Exhibit 10.167 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.168 Option to purchase 12,500 Shares of Common Stock issued to Cindy Gosselin; Option Agreement dated as of December 14, 1998 between Pollution Research and Control Corp. and Cindy Gosselin. (Incorporated herein by reference to Exhibit 10.168 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.169 Promissory Note dated as of January 27, 1999 between Pollution Research and Control Corp. and Mark S. Rose. (Incorporated herein by reference to Exhibit 10.169 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.170 Option to purchase 48,000 Shares of Common Stock issued to Mark S. Rose; OptionAgreement dated as of January 27, 1999 between Pollution Research and Control Corp. and Mark S. Rose. (Incorporated herein by reference to Exhibit 10.170 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.171 Finder's Agreement dated January 27, 1999 between Pollution Research and Control Corp. and Rosemary Althaus. (Incorporated herein by reference to Exhibit 10.171 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.172 Option to purchase 5,000 Shares of Common Stock of Pollution Research and Control Corp.; Option Agreement dated as of January 27, 1999 between Pollution Research and Control Corp. and Rosemary Althaus. (Incorporated herein by reference to Exhibit 10.172 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.173 Purchase Agreement to purchase 25,000 units consisting of 25,000 shares of Common Stock and 25,000 Warrants to purchase Common Stock dated as of February 25, 1999 between Pollution Research and Control Corp. and William T. Richey. (Incorporated herein by reference to Exhibit 10.173 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.174 Purchase Agreement to purchase 133,333 units consisting of 133,333 shares of Common Stock and 133,333 Warrants to purchase Common Stock dated as of February 25, 1999 between Pollution Research and Control Corp. and Ronald E. Patterson. (Incorporated herein by reference to Exhibit 10.174 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.175 Purchase Agreement to purchase 66,666 units consisting of 66,666 shares of Common Stock and 66,666 Warrants to purchase Common Stock dated as of February 25, 1999 between Pollution Research and Control Corp. and Phillip Huss. (Incorporated herein by reference to Exhibit 10.175 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.176 Option to Purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Anthony Reneau;Option Agreement dated as of February 25, 1999 between Pollution Research and Control Corp. and Anthony Reneau. (Incorporated herein by reference to Exhibit 10.176 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.177 Purchase Agreement to purchase 14,000 units consisting of 14,000 shares of Common Stock and 14,000 Warrants to purchase Common Stock dated as of February 25, 1999 between Pollution Research and Control Corp and Alan L. Talesnick. (Incorporated herein by reference to Exhibit 10.177 to the Annual Report on Form 10K for the fiscal year ended December 31, 1998.) 10.178 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 33,333 units consisting of 33,333 shares of Common Stock and 33,333 warrants to purchase Common Stock, dated as of February 25, 1999, between Pollution Research and Control Corp. and Maria Molinsky. (Incorporated herein by reference to Exhibit 4.11 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28,1999.) 10.179 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 9,333 units consisting of 9,333 shares of Common Stock and 9,333 warrants to purchase Common Stock, dated as of February 25, 1999, between Pollution Research and Control Corp. and Jennifer S. Jauregui. (Incorporated herein by reference to Exhibit 4.14 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.180 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 6,666 units consisting of 6,666 shares of Common Stock and 6,666 warrants to purchase Common Stock, dated as of February 25, 1999, between Pollution Research and Control Corp. and Cynthia L. Gosselin. (Incorporated herein by reference to Exhibit 4.15 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999. 10.181 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 133,333 shares of Common Stock dated May 19, 1999, between Pollution Research and Control Corp. and The Investor Resource Services, Inc.. (Incorporated herein by reference to Exhibit 4.16 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999. 10.182 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 66,667 shares of Common Stock dated May 19, 1999, between Pollution Research and Control Corp. and Trautman Wasserman & Company, Inc. (Incorporated herein by reference to Exhibit 4.17 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.183 18% Subordinated Convertible Debenture Due December 1, 1999, between Pollution Research and Control Corp. and The Venezuela Recovery Fund, N.V. (Incorporated herein by reference to Exhibit 4.18 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.184 Financial Consulting and Services Agreement dated May 20, 1999, between Pollution Research and Control Corp. and Premiere Equities, Inc.(Incorporated herein by reference to Exhibit 4.19 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.185 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 100,000 shares of Common Stock dated May 27, 1999, between Pollution Research and Control Corp. and Blagoja Samakoski. (Incorporated herein by reference to Exhibit 4.20 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.186 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 80,000 shares of Common Stock dated July 16, 1999, between Pollution Research and Control Corp. and Ronald E. Patterson. (Incorporated herein by reference to Exhibit 4.21 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.187 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 30,000 shares of Common Stock dated July 16, 1999, between Pollution Research and Control Corp. and Phillip T. Huss. (Incorporated herein by reference to Exhibit 4.22 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.188 Lock-up Agreement, dated August 12, 1999, between Pollution Research and Contnrol Corp. and Mr. ALbert E. Gosselin, Jr. (Incorporated herein by reference to Exhibit 4.23 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.189 Compromise, Settlement and Release Agreement dated August 12, 1999, between Pollution Research and Control Corp. and Fidelity Funding. (Incorporated herein by reference to Exhibit 4.24 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.190 Escrow Agreement dated August 12, 1999, among Pollution Research and Control Corp., Fidelity Funding, Inc., and American Escrow Company. (Incorporated herein by reference to Exhibit 4.25 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.191 12% Subordinated Convertible Debenture Due June 1, 2000, dated September 1, 1999, between Pollution Research and Control Corp. and Spiga Limited. (Incorporated herein by reference to Exhibit 4.26 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.192 12% Subordinated Convertible Debenture Due June 1, 2000, dated September 1, 1999, between Pollution Research and Control Corp. and Spiga Limited. (Incorporated herein by reference to Exhibit 4.27 to the Registration Statement on Form S-1, File #333-87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.193 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 50,000 shares of Common Stock dated September 13, 1999, between Pollution Research and Control Corp. and Matis Molinsky. (Incorporated herein by reference to Exhibit 4.28 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.194 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 50,000 shares of Common Stock dated September 13, 1999, between Pollution Research and Control Corp. and Lee Sion. (Incorporated herein by reference to Exhibit 4.29 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.195 Investment Letter and Memorandum of Subscription/Purchase Agreement to purchase 50,000 shares of Common Stock dated September 13, 1999, between Pollution Research and Control Corp. and Steven Sion. (Incorporated herein by reference to Exhibit 4.30 to the Registration Statement on Form S-1, File #333- 87965 of Pollution Research and Control Corp. dated September 28, 1999.) 10.196* Warrant to purchase 75,000 Shares of Common Stock of Pollution Research and Control Corp. issued to IIG Capital LLC; Warrant Agreement dated as of June 1, 1999 between Pollution Research and Control Corp. and IIG Capital LLC. 10.197* Warrant to purchase 30,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Astor Capital; Warrant Agreement dated as of June 1, 1999 between Pollution Research and Control Corp. and Astor Capital. 10.198* Warrant to purchase 22,500 Shares of Common Stock of Pollution Research and Control Corp. issued to Spiga Limited; Warrant Agreement dated as of September 1, 1999 between Pollution Research and Control Corp. and Spiga Limited. 10.199* Warrant to purchase 18,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Astor Capital; Warrant Agreement dated as of September 1, 1999 between Pollution Research and Control Corp. and Astor Capital. 10.200* Warrant to purchase 22,500 Shares of Common Stock of Pollution Research and Control Corp. issued to Spiga Limited; Warrant Agreement dated as of September 1, 1999 between Pollution Research and Control Corp. and Spiga Limited. 10.201* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to IIG Capital LLC; Warrant Agreement dated as of December 1, 1999 between Pollution Research and Control Corp. and IIG Capital LLC. 10.202* Warrant to purchase 20,475 Shares of Common Stock of Pollution Research and Control Corp. issued to Phillip T. Huss; Warrant Agreement dated as of July 16, 1999 between Pollution Research and Control Corp. and Phillip T. Huss. 10.203* Warrant to purchase 54,525 Shares of Common Stock of Pollution Research and Control Corp. issued to Ronald E. Patterson; Warrant Agreement dated as of July 16, 1999 between Pollution Research and Control Corp. and Ronald E. Patterson. 10.204* Warrant to purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Fidelity Funding; Warrant Agreement dated as of August 12, 1999 between Pollution Research and Control Corp. and Fidelity Funding. 10.205* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Maria Molinsky; Warrant Agreement dated as of September 13, 1999 between Pollution Research and Control Corp. and Maria Molinsky. 10.206* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Lee Sion; Warrant Agreement dated as of September 13, 1999 between Pollution Research and Control Corp. and Lee Sion. 10.207* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Steven Sion; Warrant Agreement dated as of September 13, 1999 between Pollution Research and Control Corp. and Steven Sion. 10.208* Registration Rights Agreement, dated June 1, 1999 between Pollution Research and Control Corp. and Venezuela Recovery Fund. 10.209* Registration Rights Agreement, Dated September 1, 1999 between Pollution Research and Control Corp. and Spiga Limited. 10.210 12% Subordinated Convertible Debenture Due February 23, 2001, Dated February 16, 2000, between Pollution Research and Control Corp. and Britannica Associates Limited (Incorporated herein by reference to Exhibit 4.1 of the Post-Effective Amendment No. 1 to Form S-3 Registration Statement #333-87965.) 10.211* Warrant to purchase 200,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Britannica Associates Limited; Warrant Agreement dated as of February 23, 2000. 10.212* Warrant to purchase 100,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Britannica Associates Limited; Warrant Agreement dated as of February 23, 2000. 10.213* Warrant to purchase 20,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Astor Capital; Warrant Agreement dated as of February 23, 2000. 10.214* Registration Rights Agreement, Dated February 23, 2000 between Pollution Research and Control Corp. and Britannica Associates Limited. 10.215* Promissory Note due March 21, 2000 dated as of January 21, 2000 between Pollution Research and Control Corp. and Britannica Associates, Ltd. 10.216* Amendment to Compromise and Settlement Agreement between Fidelity Funding, Inc. and Pollution Research and Control Corp. dated March 24, 2000. 10.217* Warrant to purchase 87,141 Shares of Common Stock of Pollution Research and Control Corp. issued to Phillip T. Huss. Warrant Agreement dated as of March 31, 2000. 10.218* Warrant to purchase 187,858 Shares of Common Stock of Pollution Research and Control Corp. issued to Ronald E. Patterson. Warrant Agreement dated as of March 31, 2000. 10.219* Warrant to purchase 46,875 Shares of Common Stock of Pollution Research and Control Corp. issued to Lee Sion. Warrant Agreement dated as of March 31, 2000. 10.220* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Steven Sion. Warrant Agreement dated as of March 31, 2000. 0.221* Warrant to purchase 10,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Patricia Cudd. Warrant Agreement dated as of March 31, 2000. 10.222* Warrant to purchase 14,000 Shares of Common Stock of Pollution Research and Control Corp. issued to Alan Talesnick. Warrant Agreement dated as of March 31, 2000. 10.223* Warrant to purchase 25,000 Shares of Common Stock of Pollution Research and Control Corp. issued to William Richey. Warrant Agreement dated as of March 31, 2000. 10.224* Warrant to purchase 33,333 Shares of Common Stock of Pollution Research and Control Corp. issued to Maria Molinsky. Warrant Agreement dated as of March 31, 2000. 21* List of Subsidiaries *Filed herewith
EX-10.196 2 FORM OF WARRANT EXHIBIT 10.196 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires June 1, 2002 Date of Issuance: June 1, 1999 Number of Shares: 75,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that IIG Capital LLC, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 75,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $1.50 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (June 1, 2002, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means June 1, 1999. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature ____________________ Address ____________________ -------------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature _________________________ Address _________________________ ------------------------- PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature ________________________ Address ________________________ ------------------------ FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.197 3 FORM OF WARRANT EXHIBIT 10.197 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires June 1, 2002 Date of Issuance: June 1, 1999 Number of Shares: 30,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Astor Capital, Inc, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 30,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $1.50 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (June 1, 2002, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means June 1, 1999. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature _______________________ Address _______________________ ----------------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature ___________________ Address ___________________ ------------------- PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature ___________________ Address ___________________ ------------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.198 4 FORM OF WARRANT EXHIBIT 10.198 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires September 1, 2002 Date of Issuance: September 1, 1999 Number of Shares: 22,500 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that SPIGA LIMITED, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 22,500 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $2.25 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (September 1, 2002, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means September 1, 1999. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature _______________________ Address _______________________ ----------------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature ________________________ Address ________________________ ------------------------ PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature ______________________ Address ______________________ ---------------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.199 5 FORM OF WARRANT EXHIBIT 10.199 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires September 1, 2002 Date of Issuance: September 1, 1999 Number of Shares: 18,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Astor Capital, Inc, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 18,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $2.25 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (September 1, 2002, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means September 1, 1999. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature ________________________ Address ________________________ ------------------------ ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature __________________ Address __________________ ------------------ PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature ___________________ Address ___________________ ------------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.200 6 FORM OF WARRANT EXHIBIT 10.200 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires September 1, 2002 Date of Issuance: September 1, 1999 Number of Shares: 22,500 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that SPIGA LIMITED, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 22,500 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $2.25 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (September 1, 2002, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means September 1, 1999. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Esq., Facsimile no.: (212) 704-6288. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature ______________________ Address ______________________ ---------------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature _________________ Address _________________ ----------------- PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature _________________ Address _________________ ----------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.201 7 FORM OF WARRANT EXHIBIT 10.201 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM DECEMBER 1, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON DECEMBER 1, 2001 This certifies that, IIG Capital LLC or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of One Dollar and fifty cents ($1.50) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on December 10, 2001. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: December 1, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ---------------------------------------- ---------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.202 8 WARRANT EXHIBIT 10.202 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 20,475 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JULY 16, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JULY 16, 2002 This certifies that, Phillip T. Huss or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Seventy Five Cents ($.75) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on July 16, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: July 16, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ----------------------------------------------- ----------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.203 9 WARRANT EXHIBIT 10.203 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 54,525 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM JULY 16, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON JULY 16, 2002 This certifies that, Ronald E. Patterson or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Seventy Five Cents ($.75) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on July 16, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: July 16, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) --------------------------------------------- --------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.204 10 WARRANT EXHIBIT 10.204 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 20,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM AUGUST 12, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON AUGUST 12, 2002 This certifies that, Fidelity Funding Inc. or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Seventy Five Cents ($.75) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on August 12, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: August 13, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin, Jr. ----------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to ,whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) --------------------------------------------- --------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.205 11 WARRANT EXHIBIT 10.205 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM SEPTEMBER 13, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002 This certifies that, Maria Molinsky or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Two Dollars and 40 cents ($2.40) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on September 13, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: September 13, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin ------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) --------------------------------------------- --------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.206 12 WARRANT EXHIBIT 10.206 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM SEPTEMBER 13, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002 This certifies that, Lee Sion or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Two Dollars and 40 cents ($2.40) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on September 13, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: September 13, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin ------------------------------------ Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) --------------------------------------------- --------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.207 13 WARRANT EXHIBIT 10.207 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM SEPTEMBER 13, 1999 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON SEPTEMBER 13, 2002 This certifies that, Steven Sion or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Two Dollars and 40 cents ($2.40) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on September 13, 2002, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: September 13, 1999 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin --------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) --------------------------------------------- --------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned.(City, State, Zip) EX-10.208 14 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.208 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of June 1, 1999, between Pollution Research and Control Corp., a California corporation (the "Company") and The Venezuela Recovery Fund (the "Purchaser"). This Agreement is being entered into pursuant to the Debenture, dated as of the date hereof, issued by the Company in favor of the Purchaser. The Company and the Purchaser hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Advice" shall have the meaning set forth in Section 3(o). "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, "control," when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Blackout Period" shall have the meaning set forth in Section 3(n). "Board" shall have the meaning set forth in Section 3(n). "Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of New York generally are authorized or required by law or other government actions to close. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Company's Common Stock, par value $.01 per share. "Effectiveness Date" means with respect to the Registration Statement the 180th day following the Closing Date (as that term is defined in the Purchase Agreement). "Effectiveness Period" shall have the meaning set forth in Section 2. "Event" shall have the meaning set forth in Section 7(e)(i). "Event Date" shall have the meaning set forth in Section 7(e)(i). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Filing Date" means the 90th day following the Closing Date. "Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities. "Indemnified Party" shall have the meaning set forth in Section 5(c). "Indemnifying Party" shall have the meaning set forth in Section 5(c). "Losses" shall have the meaning set forth in Section 5(a). "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Registrable Securities" means the Common Stock issuable upon conversion of the Debenture (the "Common Stock") and the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any stock split, stock dividend, recapitalization or similar event with respect to such Common Stock or Warrant Shares. Notwithstanding anything contained herein to the contrary, if the actual number of shares of Common Stock issuable upon exercise of the Warrants exceeds 100% of the number of shares of Common Stock issuable upon exercise of the Warrants based upon a computation as at the Closing Date or the Filing Date, the terms "Registrable Securities" shall be deemed to include such additional shares of Common Stock. "Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2(a), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post- effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended. "Special Counsel" means any special counsel to the Holder, for which the Holder will be reimbursed by the Company pursuant to Section 4. 2. Shelf Registration. On or prior to the Filing Date the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent to such effect (the "Effectiveness Period"). If the Company is notified orally or in writing by the Commission that the Commission has no comments with respect to the Registration Statement (the "Commission Notice"), the Company shall use its best efforts to cause the Registration Statement to be declared effective no later than five (5) business days after receipt of the Commission Notice. If an additional Registration Statement is required to be filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered in respect of the Conversion Shares and the Warrant Shares based upon the computation on the Closing Date, the Company shall have twenty (20) Business Days to file such additional Registration Statement, and the Company shall use its best efforts to cause such additional Registration Statement to be declared effective by the Commission as soon as possible, but in no event later than forth-five (45) days after filing. 3. Registration Procedures. In connection with the Company's registration obligations hereunder, the Company shall: (a) Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Company is not then eligible to register for resale the Registrable Securities on Form S-3 such registration shall be on another appropriate form in accordance herewith) in accordance with the method or methods of distribution thereof as specified by the Holders (except if otherwise directed by the Holders), and cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Holders and any Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of such Holders and such Special Counsel, and (ii) at the request of any Holder cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or any Special Counsel shall reasonably object in writing within three (3) Business Days of their receipt thereof. (b) (i) Prepare and file with the Commission such amendments, including post- effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify the Holders of Registrable Securities to be sold and any Special Counsel as promptly as possible (and, in the case of (i)(A) below, not less than five (5) Business Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) if at any time any of the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (vi) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) Use its best efforts to avoid the issuance of, or if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. (e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) Furnish to each Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. (g) Promptly deliver to each Holder and any Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject. (i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities. (j) Upon the occurrence of any event contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) Use its best efforts to cause all Registrable Securities relating to such Registration Statement to be listed on the Nasdaq Small Cap Market and any other securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. (l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions os Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158. (m) The Company may require each selling Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. If the Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. Each Holder covenants and agrees that (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until Such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. (n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose and which the Company would be required to disclose under the Registration Statement, then the Company may postpone or suspend its obligation under this Section 3(n) for more than 45 days in the aggregate during any 12 month period (each, a "Blackout Period"); provided, however, that no such postponement or suspension shall be permitted for consecutive 20 day periods, arising out of the same set of facts, circumstances or transactions. 4. Registration Expenses All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the OTC Bulletin Board and each other securities exchange or market on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, (C) with respect to filings required to be made under Nasdaq SmallCap Market Rules and (C) in compliance with state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Holders in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and Special Counsel for the Holders, in the case of the Special Counsel, to a maximum amount of $10,000, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company's independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 5. Indemnification (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and shall survive the transfer of the Registrable Securities by the Holders. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, the directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus. Notwithstanding anything to the contrary contained herein, the Holder shall be liable under this Section 5(b) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within then (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or result of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party, or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, the Holder shall be liable or required to contribute under this Section 5(c) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 6. Rule 144. As long as any Holder owns Common Stock, Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. As long as any Holder owns Common Stock, Warrants or Warrant Shares, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Person to sell Common Stock and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions referred to in the Purchase Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements. 7. Miscellaneous. (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the right so granted are subject in all respects to the prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the provisions of this Agreement, or the Registration Rights Agreement has been declared effective by the SEC. (c) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto and the Persons listed on Schedule 7(c) hereto) may include securities of the Company in the Registration Statement, and the Company shall not after the date hereof enter into any agreement providing such right to any of its security holders, unless the right so granted is subject in all respects to the prior rights in full of the Holders set forth herein, and is not otherwise in conflict with the provisions of this Agreement. (d) Piggy-Back Registrations. If at any time when there is not an effective Registration Statement covering (i) the Shares of Common Stock or (ii) the Warrant Shares, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or its then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each holder of Registrable Securities written notice of such determination and, if within thirty (30) days after receipt of such notice, any such holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by the Purchasers), the Company will cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 7(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities, would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). (e) Failure to File Registration Statement and Other Events. The Company and the Purchasers agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date and not declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if certain other events occur. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or prior to the Filing Date, (or is not declared effective by the Commission on or prior to the Effectiveness Date or in the event an additional Registration Statement is filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered is not filed and declared effective within the time periods set forth in Section 2(a)), or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or not subject to further review, or (iii) the Registration Statement is filed with and declared effective by the Commission but thereafter ceases to be effective as to all Registrable Securities at any time prior to the expiration of the Effectiveness Period, without being succeeded immediately by a subsequent Registration Statement filed with and declared effective by the Commission, and such cessation continues for a period of thirty days after written notice thereof to the Company, or (iv) trading in the Common Stock shall be suspended or if the Common Stock is delisted from the Nasdaq SmallCap Market for any reason for more than three Business Days in the aggregate, and such suspension or delisting continues for a period of fourteen days after written notice thereof to the Company, or (v) the Company breaches in a material respect any covenant or other material term or condition to this Agreement, Purchase Agreement (other than a representation or warranty contained therein) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, and such breach continues for a period of thirty days after written notice thereof to the Company, or (vii) the Company has breached Section 3(n) of this Agreement (any such failure or breach being referred to as an ("Event"), the Company shall pay in cash as liquidated damages for such failure and not as a penalty to each Holder an amount equal to 2% of such Holder's pro rata share of the purchase price paid by all Holders for all shares of Common Stock purchased and then outstanding pursuant to the Purchase Agreement for each thirty (30) day period until the applicable Event has been cured, which shall be pro rated for such periods less than thirty (30) days (the "Periodic Amount"). Payments to be made pursuant to this Section 7(e) shall be due and payable in cash immediately upon demand. The parties agree that the Periodic Amount represents a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of damages that may be incurred by the Holders if the Registration Statement is not filed on or prior to the Filing Date or has not been declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if any other Event as described herein has occurred. (f) Specific Enforcement, Consent to Jurisdiction. (i) The Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Registration Rights Agreement or the Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Registration Rights Agreement or the Purchase Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. (ii) Each of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is improper. Each of the Company and the Purchasers consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 7(f) shall affect or limit any right to serve process in any other manner permitted by law. (g) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each of the Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (h) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., eastern standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., eastern standard time, on any date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule A attached hereto, or with respect to the Company, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 Attention: ____________________ Facsimile: ____________________ or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Company shall be sent to ________________________, Attention:____________________, Facsimile No.:__________________. Copies of notices to any Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288. (i) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. The Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of each Holder. Each Purchaser may assign its rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. (j) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by the Holder to any transferee of such Holder of all or a portion of the shares of Common Stock or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. (l) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law thereof. (m) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (n) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provision, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (o) Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. (p) Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (q) Within two (2) business days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statemtn has been declared effective by the Commission in the form attached hereto as Exhibit A. IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above. POLLUTION RESEARCH AND CONTROL CORP. By: /s/ Albert E. Gosselin ------------------------------------------- Albert E. Gosselin President THE VENEZUELA RECOVERY FUND, N.V. By: /s/ Tony Hurley ------------------------------------------ Tony Hurley VP/SEC EXHIBIT A FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT [TRANSFER AGENT] Attn:__________________ Re: Pollution Research and Control Corp. ------------------------------------ Ladies and Gentlemen: We are counsel to Pollution Research and Control Corp., a California corporation (the "Company"), and have represented the Company in connection with (i) that certain Debenture (the "Debenture") issued by the Company in favor of The Venezuela Recovery Fund, N.V. (the "Holder") which Debenture is convertible into shares of the Company's common stock, par value $.01 per share (the "Common Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered into a Registration Rights Agreement with the Holder (the "Registration Rights Agreement") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined the Registration Rights Agreement), including the shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement, on _______ __, 1999, the Company filed a Registration Statement on Form S-3 (File No. 333-____________) (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder. In connection with the foregoing, we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. Very truly yours, [COMPANY'S COUNSEL] By:_______________________________ cc: The Venezuela Recovery Fund, N.V. EX-10.209 15 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.209 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of September 1, 1999, between Pollution Research and Control Corp., a California corporation (the "Company") and Spiga Limited (the "Purchaser"). This Agreement is being entered into pursuant to the Debenture, dated as of the date hereof, issued by the Company in favor of the Purchaser. The Company and the Purchaser hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Advice" shall have the meaning set forth in Section 3(o). "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, "control," when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Blackout Period" shall have the meaning set forth in Section 3(n). "Board" shall have the meaning set forth in Section 3(n). "Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of New York generally are authorized or required by law or other government actions to close. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Company's Common Stock, par value $.01 per share. "Effectiveness Date" means with respect to the Registration Statement the 180th day following the Closing Date (as that term is defined in the Purchase Agreement). "Effectiveness Period" shall have the meaning set forth in Section 2. "Event" shall have the meaning set forth in Section 7(e)(i). "Event Date" shall have the meaning set forth in Section 7(e)(i). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Filing Date" means the 90th day following the Closing Date. "Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities. "Indemnified Party" shall have the meaning set forth in Section 5(c). "Indemnifying Party" shall have the meaning set forth in Section 5(c). "Losses" shall have the meaning set forth in Section 5(a). "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Registrable Securities" means the Common Stock issuable upon conversion of the Debenture (the "Common Stock") and the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any stock split, stock dividend, recapitalization or similar event with respect to such Common Stock or Warrant Shares. Notwithstanding anything contained herein to the contrary, if the actual number of shares of Common Stock issuable upon exercise of the Warrants exceeds 100% of the number of shares of Common Stock issuable upon exercise of the Warrants based upon a computation as at the Closing Date or the Filing Date, the terms "Registrable Securities" shall be deemed to include such additional shares of Common Stock. "Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2(a), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post- effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended. "Special Counsel" means any special counsel to the Holder, for which the Holder will be reimbursed by the Company pursuant to Section 4. 2. Shelf Registration. On or prior to the Filing Date the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent to such effect (the "Effectiveness Period"). If the Company is notified orally or in writing by the Commission that the Commission has no comments with respect to the Registration Statement (the "Commission Notice"), the Company shall use its best efforts to cause the Registration Statement to be declared effective no later than five (5) business days after receipt of the Commission Notice. If an additional Registration Statement is required to be filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered in respect of the Conversion Shares and the Warrant Shares based upon the computation on the Closing Date, the Company shall have twenty (20) Business Days to file such additional Registration Statement, and the Company shall use its best efforts to cause such additional Registration Statement to be declared effective by the Commission as soon as possible, but in no event later than forth-five (45) days after filing. 3. Registration Procedures. In connection with the Company's registration obligations hereunder, the Company shall: (a) Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Company is not then eligible to register for resale the Registrable Securities on Form S-3 such registration shall be on another appropriate form in accordance herewith) in accordance with the method or methods of distribution thereof as specified by the Holders (except if otherwise directed by the Holders), and cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Holders and any Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of such Holders and such Special Counsel, and (ii) at the request of any Holder cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or any Special Counsel shall reasonably object in writing within three (3) Business Days of their receipt thereof. (b) (i) Prepare and file with the Commission such amendments, including post- effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify the Holders of Registrable Securities to be sold and any Special Counsel as promptly as possible (and, in the case of (i)(A) below, not less than five (5) Business Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) if at any time any of the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (vi) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) Use its best efforts to avoid the issuance of, or if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. (e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) Furnish to each Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. (g) Promptly deliver to each Holder and any Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject. (i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities. (j) Upon the occurrence of any event contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) Use its best efforts to cause all Registrable Securities relating to such Registration Statement to be listed on the Nasdaq Small Cap Market and any other securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. (l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions os Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158. (m) The Company may require each selling Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. If the Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. Each Holder covenants and agrees that (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until Such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. (n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose and which the Company would be required to disclose under the Registration Statement, then the Company may postpone or suspend its obligation under this Section 3(n) for more than 45 days in the aggregate during any 12 month period (each, a "Blackout Period"); provided, however, that no such postponement or suspension shall be permitted for consecutive 20 day periods, arising out of the same set of facts, circumstances or transactions. 4. Registration Expenses All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the OTC Bulletin Board and each other securities exchange or market on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, (C) with respect to filings required to be made under Nasdaq SmallCap Market Rules and (C) in compliance with state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Holders in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and Special Counsel for the Holders, in the case of the Special Counsel, to a maximum amount of $10,000, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company's independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 5. Indemnification (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and shall survive the transfer of the Registrable Securities by the Holders. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, the directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus. Notwithstanding anything to the contrary contained herein, the Holder shall be liable under this Section 5(b) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within then (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or result of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party, or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, the Holder shall be liable or required to contribute under this Section 5(c) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 6. Rule 144. As long as any Holder owns Common Stock, Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. As long as any Holder owns Common Stock, Warrants or Warrant Shares, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Person to sell Common Stock and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions referred to in the Purchase Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements. 7. Miscellaneous. (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the right so granted are subject in all respects to the prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the provisions of this Agreement, or the Registration Rights Agreement has been declared effective by the SEC. (c) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto and the Persons listed on Schedule 7(c) hereto) may include securities of the Company in the Registration Statement, and the Company shall not after the date hereof enter into any agreement providing such right to any of its security holders, unless the right so granted is subject in all respects to the prior rights in full of the Holders set forth herein, and is not otherwise in conflict with the provisions of this Agreement. (d) Piggy-Back Registrations. If at any time when there is not an effective Registration Statement covering (i) the Shares of Common Stock or (ii) the Warrant Shares, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or its then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each holder of Registrable Securities written notice of such determination and, if within thirty (30) days after receipt of such notice, any such holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by the Purchasers), the Company will cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 7(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities, would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). (e) Failure to File Registration Statement and Other Events. The Company and the Purchasers agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date and not declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if certain other events occur. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or prior to the Filing Date, (or is not declared effective by the Commission on or prior to the Effectiveness Date or in the event an additional Registration Statement is filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered is not filed and declared effective within the time periods set forth in Section 2(a)), or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or not subject to further review, or (iii) the Registration Statement is filed with and declared effective by the Commission but thereafter ceases to be effective as to all Registrable Securities at any time prior to the expiration of the Effectiveness Period, without being succeeded immediately by a subsequent Registration Statement filed with and declared effective by the Commission, and such cessation continues for a period of thirty days after written notice thereof to the Company, or (iv) trading in the Common Stock shall be suspended or if the Common Stock is delisted from the Nasdaq SmallCap Market for any reason for more than three Business Days in the aggregate, and such suspension or delisting continues for a period of fourteen days after written notice thereof to the Company, or (v) the Company breaches in a material respect any covenant or other material term or condition to this Agreement, Purchase Agreement (other than a representation or warranty contained therein) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, and such breach continues for a period of thirty days after written notice thereof to the Company, or (vii) the Company has breached Section 3(n) of this Agreement (any such failure or breach being referred to as an ("Event"), the Company shall pay in cash as liquidated damages for such failure and not as a penalty to each Holder an amount equal to 2% of such Holder's pro rata share of the purchase price paid by all Holders for all shares of Common Stock purchased and then outstanding pursuant to the Purchase Agreement for each thirty (30) day period until the applicable Event has been cured, which shall be pro rated for such periods less than thirty (30) days (the "Periodic Amount"). Payments to be made pursuant to this Section 7(e) shall be due and payable in cash immediately upon demand. The parties agree that the Periodic Amount represents a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of damages that may be incurred by the Holders if the Registration Statement is not filed on or prior to the Filing Date or has not been declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if any other Event as described herein has occurred. (f) Specific Enforcement, Consent to Jurisdiction. (i) The Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Registration Rights Agreement or the Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Registration Rights Agreement or the Purchase Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. (ii) Each of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is improper. Each of the Company and the Purchasers consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 7(f) shall affect or limit any right to serve process in any other manner permitted by law. (g) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each of the Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (h) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., eastern standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., eastern standard time, on any date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule A attached hereto, or with respect to the Company, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 Attention: ____________________ Facsimile: ____________________ or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Company shall be sent to ________________________, Attention:____________________, Facsimile No.:__________________. Copies of notices to any Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288. (i) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. The Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of each Holder. Each Purchaser may assign its rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. (j) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by the Holder to any transferee of such Holder of all or a portion of the shares of Common Stock or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. (l) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law thereof. (m) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (n) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provision, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (o) Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. (p) Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (q) Within two (2) business days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statemtn has been declared effective by the Commission in the form attached hereto as Exhibit A. IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above. POLLUTION RESEARCH AND CONTROL CORP. By: /s/ Albert E. Gosselin -------------------------------------- Albert E. Gosselin President THE VENEZUELA RECOVERY FUND, N.V. By: /s/ Tony Hurley ------------------------------------- Tony Hurley VP/SEC EXHIBIT A FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT [TRANSFER AGENT] Attn:__________________ Re: Pollution Research and Control Corp. Ladies and Gentlemen: We are counsel to Pollution Research and Control Corp., a California corporation (the "Company"), and have represented the Company in connection with (i) that certain Debenture (the "Debenture") issued by the Company in favor of The Venezuela Recovery Fund, N.V. (the "Holder") which Debenture is convertible into shares of the Company's common stock, par value $.01 per share (the "Common Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered into a Registration Rights Agreement with the Holder (the "Registration Rights Agreement") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined the Registration Rights Agreement), including the shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement, on _______ __, 1999, the Company filed a Registration Statement on Form S-3 (File No. 333-____________) (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder. In connection with the foregoing, we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. Very truly yours, [COMPANY'S COUNSEL] By:_______________________________ cc: Spiga Limited EX-10.211 16 FORM OF WARRANT EXHIBIT 10.211 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires February 23, 2003 Date of Issuance: February 23, 2000 Number of Shares:200,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Britannica Associates Limited, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 200,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $4.50 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (Febriaru 23, 2003, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means February 23, 2000. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Astor Capital, 9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature _________________ Address _________________ ----------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature ________________ Address ________________ ---------------- PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature _____________________ Address _____________________ --------------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.212 17 FORM OF WARRANT EXHIBIT 10.212 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires February 23, 2003 Date of Issuance: February 23, 2000 Number of Shares:100,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Britannica Associates Limited, or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 100,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $2.25 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (February 23, 2003, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means February 23, 2000. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Astor Capital, 9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature _____________________ Address _____________________ --------------------- ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature __________________ Address __________________ ------------------ PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature __________________ Address __________________ ------------------ FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.213 18 FORM OF WARRANT EXHIBIT 10.213 FORM OF WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. Expires February 23, 2003 Date of Issuance: February 23, 2000 Number of Shares:20,000 FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Pollution Research and Control Corp., a California corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Astor Capital, Inc. or its registered assigns is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 20,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non- assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial exercise price of this warrant is $2.25 per share (subject to adjustment as hereinafter provided). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 8 hereof. 1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., eastern time, on the third anniversary of the issue date (February 23, 2003, such period being the "Term"). 2. Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange. (a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term. (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such holder's election (i) by certified or official bank check or (ii) wire transfer. (c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the Shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. (d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Purchaser without the consent of the Company. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto. (e) Compliance with Securities Laws. (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing share of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARE OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. (iii) The restrictions imposed by this subsection (e) upon the transfer of this Warrant and the shares of Warrant Stock to be purchased upon exercise hereof shall terminate (A) when such securities shall have been effectively registered under the Securities Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and substance reasonable satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act and state securities laws or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under state securities laws is not required/ Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new certificates) of like tenor not not bearing the applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such holder shall fail to make any such request, the failure shall not affect the continuing obligations of the Issuer to afford such rights to such Holder. 3. Stock Fully Paid:Reservation and Listing of Shares:Covenants. (a) Stock Full Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. (b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer. (c) Covenants. The Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will: (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) no amend or modify an provision of the Certificate of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant. (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. (e) Rights and Obligations under the Registration Rights Agreement. The shares of Warrant Stock are entitled to the benefits and subject to the terms of the Registration Rights Agreement dated as of even date herewith between the Issuer and the Holder listed on the signature pages thereof (as amended from time to time, the "Registration Rights Agreement"). The Issuer shall keep or cause to be kept a copy of the Registration Rights Agreement, and any amendments thereto, at its chief executive office and shall furnish, without charge, copies thereof to the Holder upon request. 4. Adjustment of Warrant Price and Warrant Share Number. The number and kind of Securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events as follows: (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale. (i) In case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"): (a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or (d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Warrant is not exercised prior to such Triggering Event, or is redeemed in connection with such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments and increases (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at such Holder's election, a portion hereof) concurrently with the Triggering Event to the Person continuing after or surviving such Triggering Event, or to the Issuer (if Issuer is the continuing or surviving Person) at a sales price equal to the amount of cash, property and/or Securities to which a holder of the number of shares of Common Stock which would otherwise have been delivered upon the exercise of this Warrant would have been entitled upon the effective date of closing of any such Triggering Event (the "Event Consideration"), less the amount or portion of such Event Consideration having a fair value equal to the aggregate Warrant Price applicable to this Warrant or the portion hereof so sold. (ii) Notwithstanding anything contained in this Warrant to the contrary, the Issuer will not effect any Triggering Event unless, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, and continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of the subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to delivery upon any exercise of this Warrant or the exercise of any rights pursuant hereto. (iii) If with respect to any Triggering Event, the Holder of this Warrant has exercised its right as provided in clause (y) of subparagraph (i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer agrees that as a condition to the consummation of any such Triggering Event the Issuer shall secure such right of Holder to sell this Warrant to the Person continuing after or surviving such Triggering Event and the Issuer shall not effect any such Triggering Event unless upon or prior to the consummation thereof the amounts of cash, property and/or Securities required under such clause (y) are delivered to the Holder of this Warrant. The obligation of the Issuer to secure such right of the Holder to sell this Warrant shall be subject to such Holder's cooperation with the Issuer, including, without limitation, the giving of customary representations and warranties to the purchaser in connection with any such sale. Prior notice of any Triggering Event shall be given to the Holder of this Warrant in accordance with Section 12 hereof. (b) Subdivision or Combination of Shares. If the Issuer, at any time while this Warrant is outstanding, shall subdivide or combine any shares of Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be proportionately reduced (as at the effective date of such subdivision or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so subdividing, as at the applicable record date, whichever is earlier) to reflect the increase in the total number of shares of Common Stock outstanding as a result of such subdivision, or (ii) in the case of a combination of shares, the Warrant Price shall be proportionately increased (as at the effective date of such combination or, if the Issuer shall take a record of Holders of its Common Stock for the purpose of so combining, as at the applicable record date, whichever is earlier) to reflect the reduction in the total number of shares of Common Stock outstanding as a result of such combination. (c) Certain Dividends and Distributions. If the Issuer, at any time while this Warrant is outstanding, shall: (i) Stock Dividends. Pay a dividend in, or make any other distribution to its stockholders (without consideration therefor) or, shares of Common Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall take a record of the Holders of the Issuer's Capital Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such payment or other distribution), to that price determined by multiplying the Warrant Price in effect immediately prior to such record date (or if no such record is taken, then immediately prior to such payment of other distribution), by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (2) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (plus in the event that the Issuer paid cash for fractional shares, the number of additional shares which would have been outstanding had the Issuer issued fractional shares in connection with said dividends); or (ii) Other Dividends. Pay a dividend on, or make any distribution of its assets upon or with respect to (including, but not limited to, a distribution of its property as a dividend in liquidation or partial liquidation or by way of return of capital), the Common Stock (other than as described in clause (i) of this subsection (c)), or in the event that the Company shall offer options or rights to subscribe for shares of Common Stock, or issue any Common Stock Equivalents, to all of its holders of Common Stock, then on the record date for such payment, distribution or offer, or, in the absence of a record date, on the date of such payment, distribution or offer, the Holder shall receive what the Holder would have received had it exercised this Warrant in full immediately prior to the record date of such payment, distribution or offer or, in the absence of a record date, immediately prior to the date of such payment, distribution or offer. (d) Purchase of Common Stock by the Issuer. If the Issuer at any time while this Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per Share Market Value then in effect, then the Warrant Price upon each such purchase, redemption or acquisition shall be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such purchase, redemption or acquisition minus the number of shares of Common Stock which the aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such purchase, redemption or acquisition. For the purposes of this subsection (f), the date as of which the Per Share Market Value shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of actual purchase, redemption or acquisition of such Common Stock. For the purposes of this subsection (f), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the underlying Common Stock, and the computation herein required shall be made on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the date as of which such computation is required hereby to be made, whether or not such Common Stock Equivalent is actually exercisable, convertible or exchangeable on such date. (e) Other Provisions Applicable to Adjustments Under this Section 4. The following provisions shall be applicable to the making of adjustments in the Warrant Price hereinbefore provided in Section 4: (i) Computation of Consideration. The consideration received by the Issuer shall be deemed to be the following: to the extent that any Additional Shares of Common Stock or any Common Stock Equivalents shall be issued for a cash consideration, the consideration received by the Issuer therefor, or if such Additional Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers for public offering without a subscription offering, the public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions, or expenses paid or incurred by the Issuer for or in connection with the underwriting thereof or otherwise in connection with the issued thereof; to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair market value of such consideration at the time of such issuance as determined in good faith by the Board. The consideration for any Additional Shares of common Stock issuable pursuant to any Common Stock Equivalents shall be the consideration received by the Issuer for issuing such Common Stock Equivalents, plus the additional consideration payable to the Issuer upon the exercise, conversion or exchange of such Common Stock Equivalents. In case of the issuance at any time of any Additional Shares of Common Stock or Common Stock Equivalents in payment or satisfaction of any dividend upon any class of Capital Stock of the Issuer other than Common Stock, the Issuer shall be deemed to have received for such Additional Shares of Common Stock or Common Stock Equivalents a consideration equal to the amount of such dividend so paid or satisfied. In any case in which the consideration to be received or paid shall be other than cash, the Board shall notify the Holder of this Warrant of its determination of the fair market value of such consideration prior to payment or accepting receipt thereof. If, within thirty days after receipt of said notice, the Majority Holders shall notify the Board in writing of their objection to such determination, a determination of the fair market value of such consideration shall be made by an Independent Appraiser selected by the Majority Holders with the approval of the Board (which approval shall not be unreasonable withheld), whose fees and expenses shall be paid by the Issuer. (ii) Readjustment of Warrant Price. Upon the expiration or termination of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Warrant Price, if such Common Stock Equivalent shall not have been converted, exercised or exchanged in its entirety, the number of shares of Common Stock deemed to be issued and outstanding by reason of the fact that they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Warrant Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Warrant Price made pursuant to the provisions of this Section 4 after the issuance of such Common Stock Equivalent) had the adjustment of the Warrant Price been made in accordance with the issuance or sale of the number of Additional Shares of Common Stock actually issued upon conversion, exchange or issuance of such Common Stock Equivalent and thereupon only the number of Additional Shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Issuer (computed as in clause (i) of this subsection (g) shall be deemed to have been received by the Issuer. (iii) Outstanding Common Stock. The number of shares of common Stock at any time outstanding shall (A) not include any shares thereof then directly or indirectly owned or held by or for the account of the Issuer or any of its Subsidiaries, and (B) be deemed to include all shares of Common Stock then issuable upon conversion, exercise or exchange of any then outstanding Common Stock Equivalents or any other evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for shares of Common Stock or Other Common Stock. (f) Other Action Affecting Common Stock. In case after the Original Issue Date the Issuer shall take any action affecting its Common Stock, other than an action described in any of the foregoing subsections (a) through (g) of this Section 4, inclusive, and the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principle of this Section 4, then the Warrant Price shall be adjusted in such manner and at such time as the Board may in good faith determine to be equitable in the circumstances. (g) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant Price pursuant to any of the foregoing provisions of this Section 4, the Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole share, to the product obtained by multiplying the Warrant Share Number immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately before giving effect to such adjustment and the denominator of which shall be the Warrant Price immediately after giving effect to such adjustment. If the Issuer shall be in default under any provision contained in Section 3 of this Warrant so that shares issued at the Warrant Price adjusted in accordance with this Section 4 would not be validly issued, the adjustment of the Warrant Share Number provided for in the foregoing sentence shall nonetheless be made and the Holder of this Warrant shall be entitled to purchase such greater number of shares at the lowest price at which such shares may then be validly issued under applicable law. Such exercise shall not constitute a waiver of any claim arising against the Issuer by reason of its default under Section 3 of this Warrant. (h) Form of Warrant after Adjustments. The form of this Warrant need not be changed because of any adjustments in the Warrant Price or the number and kind of Securities purchasable upon the exercise of this Warrant. 5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this Warrant be submitted to one of the national accounting firms currently known as the "big five" selected by the Holder, provided that the Issuer shall have ten days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and such Holder within thirty days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. The fees and expenses of such accounting firm shall be paid by the Issuer. 6. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with and exercise hereof, but in lieu of such fractional shares, the Issuer shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Per Share Market Value then in effect. 7. Definitions. For the purposes of this Warrant, the following terms have the following meanings: "Additional Shares of Common Stock" means all shares of Common Stock issued by the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by the Issuer after the Original Issue Date, except the Warrant Stock, the Future Warrant Stock and Common Stock issuable upon exercise of existing stock options issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Issuer. "Board" shall mean the Board of Directors of the Issuer. "Capital Stock" means and includes (i) any and all shares, interests, participation or other equivalents of or interest in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type. "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer as in effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant to applicable law. "Common Stock" means the Common Stock, $.01 par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed. "Common Stock Equivalent" means any Convertible Security or warrant, option or other right to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Security. "Convertible Securities" means evidences of Indebtedness, shares of Capital Stock or other Securities which are or may be at any time convertible into or exchangeable for Additional Shares of Common Stock. The term "Convertible Security" means one of the Convertible Securities. "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. "Issuer" means Pollution Research and Control Corp., a California corporation, and its successors. "Majority Holders" means at any time the Holders of Warrants exercisable for a majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding. "Nasdaq" means the Nasdaq Small Cap Market System. "Original Issue Date" means February 23, 2000. "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. "OTC Bulletin Board" means the over-the-counter electronic bulletin board. "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature. "Per Share Market Value" means on any particular date (a) the closing bid price per share of the Common Stock on such date on Nasdaq or the over-the-counter market, as applicable, as reported by the OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices at the close of business on such date or a registered national stock exchange on which the Common Stock is then listed or if there is no such price on such date, then the closing bid price on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the "Ping Sheet" quotes for the relevant conversion period, as determined in good faith by the holder, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as determined by an Independent Appraiser selected in good faith by the Majority Holders; provided, however, that the Issuer, after receipt of the determination by such Independent Appraiser, shall have the right to select an additional Independent Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period. The Issuer shall pay all costs and expenses of each Independent Appraiser. The determination of fair market value by an Independent Appraiser shall be based upon the fair market value of the Issuer determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights. "Registration Rights Agreement" has the meaning specified in Section 3(e) hereof. "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries. "Trading Day" means (a) a day on which the Common Stock is traded on Nasdaq, the over-the-counter market or any registered national stock exchange, or (c) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. "Term" has the meaning specified in Section 1 hereof. "Voting Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by reason of the happening of a contingency. "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. "Warrant Price" means $2.25, as such price may be adjusted from time to time as shall result from the adjustments specified in Section 4 hereof. "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants. 8. Other Notices. In case at any time, (a) the Issuer shall make any distributions to the holders of Common Stock; or (b) the Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class or of any Common Stock Equivalents or Convertible Securities or other rights; or (c) there shall be any reclassification of the Capital Stock of the Issuer; or (d) there shall be any capital reorganization by the Issuer; or (e) there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or (f) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or distribution to holders of Common Stock; then, in each of such cases the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their certificates for Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be. Such notice shall be given at least twenty days prior to the action in questions and not less than twenty days prior to the record date or the date on which the Issuer's transfer books are closed in respect thereto. The Issuer shall give to the Holder notice of all meetings and actions by written consent of its stockholders, at the same time in the same manner as notice of any meetings of stockholders is required to be given to stockholders who do not waive such notice (or, if such requires no notice, then two Trading Days written notice thereof describing the matters upon which action is to be taken). The Holder shall have the right to send two representatives selected by it to each meeting, who shall be permitted to attend, but not vote at, such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the Common Stock. 9. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Majority Holders; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 9 without the consent of the Holder of this Warrant. 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. 11. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., pacific standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m. pacific standard time, on any date and earlier than 11:59 p.m., pacific standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Issuer shall be sent to _________________________________________ Attn:___________, Facsimile no.: ______________. Copies of notices to the Holder shall be sent to Astor Capital, 9300 Wilshire Blvd, Suite 308, Beverly Hills, CA 90212, Fax: 310-273-2662. 12. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 13. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock. 14. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein. 15. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. Pollution Research and Control Corp. By: /s/ Albert E. Gosselin President EXERCISE FORM [NAME OF ISSUER] The undersigned __________________, pursuant to the provisions of the within Warrant, hereby elects to purchase ______ shares of Common Stock of ________________________________ covered by the within Warrant. Dated:___________________ Signature ________________________ Address ________________________ ------------------------ ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer the said Warrant on the books of the within named corporation. Dated:________________________ Signature ___________________ Address ___________________ ------------------- PARTIAL ASSIGNMENT FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and transfers unto _______________________________ the right to purchase _________ shares of Warrant Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute and appoint _____________________, attorney, to transfer that part of the said Warrant on the books of the within named corporation. Dated:________________________ Signature___________________ Address ___________________ ------------------- FOR USE BY THE ISSUER ONLY: This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of _______, _____ shares of Common Stock issued therefor in the name of _______________________, Warrant No. W- ________ issued for _______ shares of Common Stock in the name of ------------------------------. EX-10.214 19 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.214 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of February 23, 2000, between Pollution Research and Control Corp., a California corporation (the "Company") and Britannica Associates Limited (the "Purchaser"). This Agreement is being entered into pursuant to the Debenture, dated as of the date hereof, issued by the Company in favor of the Purchaser. The Company and the Purchaser hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Advice" shall have the meaning set forth in Section 3(o). "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, "control," when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "Blackout Period" shall have the meaning set forth in Section 3(n). "Board" shall have the meaning set forth in Section 3(n). "Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of New York generally are authorized or required by law or other government actions to close. "Commission" means the Securities and Exchange Commission. "Common Stock" means the Company's Common Stock, par value $.01 per share. "Effectiveness Date" means with respect to the Registration Statement the 180th day following the Closing Date (as that term is defined in the Purchase Agreement). "Effectiveness Period" shall have the meaning set forth in Section 2. "Event" shall have the meaning set forth in Section 7(e)(i). "Event Date" shall have the meaning set forth in Section 7(e)(i). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Filing Date" means the 90th day following the Closing Date. "Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities. "Indemnified Party" shall have the meaning set forth in Section 5(c). "Indemnifying Party" shall have the meaning set forth in Section 5(c). "Losses" shall have the meaning set forth in Section 5(a). "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Registrable Securities" means the Common Stock issuable upon conversion of the Debenture (the "Common Stock") and the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant Shares"), and upon any stock split, stock dividend, recapitalization or similar event with respect to such Common Stock or Warrant Shares. Notwithstanding anything contained herein to the contrary, if the actual number of shares of Common Stock issuable upon exercise of the Warrants exceeds 100% of the number of shares of Common Stock issuable upon exercise of the Warrants based upon a computation as at the Closing Date or the Filing Date, the terms "Registrable Securities" shall be deemed to include such additional shares of Common Stock. "Registration Statement" means the registration statements and any additional registration statements contemplated by Section 2(a), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post- effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 158" means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended. "Special Counsel" means any special counsel to the Holder, for which the Holder will be reimbursed by the Company pursuant to Section 4. 2. Shelf Registration. On or prior to the Filing Date the Company shall prepare and file with the Commission a "shelf" Registration Statement covering all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement and (ii) use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent to such effect (the "Effectiveness Period"). If the Company is notified orally or in writing by the Commission that the Commission has no comments with respect to the Registration Statement (the "Commission Notice"), the Company shall use its best efforts to cause the Registration Statement to be declared effective no later than five (5) business days after receipt of the Commission Notice. If an additional Registration Statement is required to be filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered in respect of the Conversion Shares and the Warrant Shares based upon the computation on the Closing Date, the Company shall have twenty (20) Business Days to file such additional Registration Statement, and the Company shall use its best efforts to cause such additional Registration Statement to be declared effective by the Commission as soon as possible, but in no event later than forth-five (45) days after filing. 3. Registration Procedures. In connection with the Company's registration obligations hereunder, the Company shall: (a) Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Company is not then eligible to register for resale the Registrable Securities on Form S-3 such registration shall be on another appropriate form in accordance herewith) in accordance with the method or methods of distribution thereof as specified by the Holders (except if otherwise directed by the Holders), and cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Holders and any Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of such Holders and such Special Counsel, and (ii) at the request of any Holder cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or any Special Counsel shall reasonably object in writing within three (3) Business Days of their receipt thereof. (b) (i) Prepare and file with the Commission such amendments, including post- effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify the Holders of Registrable Securities to be sold and any Special Counsel as promptly as possible (and, in the case of (i)(A) below, not less than five (5) Business Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) if at any time any of the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (vi) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) Use its best efforts to avoid the issuance of, or if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. (e) If requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (f) Furnish to each Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. (g) Promptly deliver to each Holder and any Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject. (i) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities. (j) Upon the occurrence of any event contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) Use its best efforts to cause all Registrable Securities relating to such Registration Statement to be listed on the Nasdaq Small Cap Market and any other securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. (l) Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions os Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158. (m) The Company may require each selling Holder to furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. If the Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. Each Holder covenants and agrees that (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until Such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j), or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. (n) If (i) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose and which the Company would be required to disclose under the Registration Statement, then the Company may postpone or suspend its obligation under this Section 3(n) for more than 45 days in the aggregate during any 12 month period (each, a "Blackout Period"); provided, however, that no such postponement or suspension shall be permitted for consecutive 20 day periods, arising out of the same set of facts, circumstances or transactions. 4. Registration Expenses All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the OTC Bulletin Board and each other securities exchange or market on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, (C) with respect to filings required to be made under Nasdaq SmallCap Market Rules and (C) in compliance with state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Holders in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and Special Counsel for the Holders, in the case of the Special Counsel, to a maximum amount of $10,000, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company's independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 5. Indemnification (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and shall survive the transfer of the Registrable Securities by the Holders. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, the directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus. Notwithstanding anything to the contrary contained herein, the Holder shall be liable under this Section 5(b) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within then (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or result of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party, or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, the Holder shall be liable or required to contribute under this Section 5(c) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 6. Rule 144. As long as any Holder owns Common Stock, Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. As long as any Holder owns Common Stock, Warrants or Warrant Shares, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Person to sell Common Stock and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions referred to in the Purchase Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements. 7. Miscellaneous. (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has, as of the date hereof entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the right so granted are subject in all respects to the prior rights in full of the Holders set forth herein, and are not otherwise in conflict with the provisions of this Agreement, or the Registration Rights Agreement has been declared effective by the SEC. (c) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto and the Persons listed on Schedule 7(c) hereto) may include securities of the Company in the Registration Statement, and the Company shall not after the date hereof enter into any agreement providing such right to any of its security holders, unless the right so granted is subject in all respects to the prior rights in full of the Holders set forth herein, and is not otherwise in conflict with the provisions of this Agreement. (d) Piggy-Back Registrations. If at any time when there is not an effective Registration Statement covering (i) the Shares of Common Stock or (ii) the Warrant Shares, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or its then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each holder of Registrable Securities written notice of such determination and, if within thirty (30) days after receipt of such notice, any such holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by the Purchasers), the Company will cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to such holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 7(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities, would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than the Company). (e) Failure to File Registration Statement and Other Events. The Company and the Purchasers agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date and not declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if certain other events occur. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or prior to the Filing Date, (or is not declared effective by the Commission on or prior to the Effectiveness Date or in the event an additional Registration Statement is filed because the actual number of shares of Common Stock into which the Warrants are exercisable exceeds the number of shares of Common Stock initially registered is not filed and declared effective within the time periods set forth in Section 2(a)), or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or not subject to further review, or (iii) the Registration Statement is filed with and declared effective by the Commission but thereafter ceases to be effective as to all Registrable Securities at any time prior to the expiration of the Effectiveness Period, without being succeeded immediately by a subsequent Registration Statement filed with and declared effective by the Commission, and such cessation continues for a period of thirty days after written notice thereof to the Company, or (iv) trading in the Common Stock shall be suspended or if the Common Stock is delisted from the Nasdaq SmallCap Market for any reason for more than three Business Days in the aggregate, and such suspension or delisting continues for a period of fourteen days after written notice thereof to the Company, or (v) the Company breaches in a material respect any covenant or other material term or condition to this Agreement, Purchase Agreement (other than a representation or warranty contained therein) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, and such breach continues for a period of thirty days after written notice thereof to the Company, or (vii) the Company has breached Section 3(n) of this Agreement (any such failure or breach being referred to as an ("Event"), the Company shall pay in cash as liquidated damages for such failure and not as a penalty to each Holder an amount equal to 2% of such Holder's pro rata share of the purchase price paid by all Holders for all shares of Common Stock purchased and then outstanding pursuant to the Purchase Agreement for each thirty (30) day period until the applicable Event has been cured, which shall be pro rated for such periods less than thirty (30) days (the "Periodic Amount"). Payments to be made pursuant to this Section 7(e) shall be due and payable in cash immediately upon demand. The parties agree that the Periodic Amount represents a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of damages that may be incurred by the Holders if the Registration Statement is not filed on or prior to the Filing Date or has not been declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Time or if any other Event as described herein has occurred. (f) Specific Enforcement, Consent to Jurisdiction. (i) The Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Registration Rights Agreement or the Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Registration Rights Agreement or the Purchase Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. (ii) Each of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is improper. Each of the Company and the Purchasers consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 7(f) shall affect or limit any right to serve process in any other manner permitted by law. (g) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each of the Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (h) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., eastern standard time, on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., eastern standard time, on any date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule A attached hereto, or with respect to the Company, addressed to: Pollution Research and Control Corp. 506 Paula Avenue Glendale, California 91201 Attention: ____________________ Facsimile: ____________________ or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to the Company shall be sent to ________________________, Attention:____________________, Facsimile No.:__________________. Copies of notices to any Holder shall be sent to Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New York, New York 10036, Attention: Mark S. Hirsch, Facsimile No.: (212) 704-6288. (i) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns. The Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of each Holder. Each Purchaser (j) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be automatically assignable by the Holder to any transferee of such Holder of all or a portion of the shares of Common Stock or the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company, which consent shall not be unreasonably withheld. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. (l) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law thereof. (m) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (n) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provision, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (o) Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. (p) Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (q) Within two (2) business days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statemtn has been declared effective by the Commission in the form attached hereto as Exhibit A. IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above. POLLUTION RESEARCH AND CONTROL CORP. By: /s/ Albert E. Gosselin --------------------------------------- Albert E. Gosselin President Britannica Associates Limited By: /s/ Tony Hurley -------------------------------------- Tony Hurley VP/SEC EXHIBIT A FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT [TRANSFER AGENT] Attn:__________________ Re: Pollution Research and Control Corp. ------------------------------------ Ladies and Gentlemen: We are counsel to Pollution Research and Control Corp., a California corporation (the "Company"), and have represented the Company in connection with (i) that certain Debenture (the "Debenture") issued by the Company in favor of Britannica Associates Limited (the "Holder") which Debenture is convertible into shares of the Company's common stock, par value $.01 per share (the "Common Stock"), and (ii) warrants issued to the Holder to purchase shares of the Common Stock (the "Warrants"). Pursuant to the Debenture, the Company also has entered into a Registration Rights Agreement with the Holder (the "Registration Rights Agreement") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined the Registration Rights Agreement), including the shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement, on _______ __, 1999, the Company filed a Registration Statement on Form S-3 (File No. 333-____________) (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder. In connection with the foregoing, we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. Very truly yours, [COMPANY'S COUNSEL] By:_______________________________ cc: Britannica Associates Limited EX-10.215 20 PROMISSORY NOTE EXHIBIT 10.215 PROMISSORY NOTE Glendale, California $75,000.00 January 21, 2000 FOR VALUE RECEIVED, the undersigned, Dasibi China, Inc., a California corporation (hereinafter referred to as the "Maker"), with its address at 506 Paula Avenue, Glendale, California 91201, agrees and promises to pay to the order of Britannica Associates, Ltd. (hereinafter referred to as the "Holder"), at 3rd Floor, Omar Hodge Building, Wickhams, #362, Rhodestown Tortola, British Virgin Islands, or such other place as the Holder may designate in writing, in coin or currenty of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, the principal sum of seventy five thousand dollars ($75,000), together with interest thereon at the ten per cent (10%) per annum, from the date herof until maturity, as hereinafter provided. The principal balance of this Promissory Note (hereinafter referred to as the "Note"), together with all interest then accrued and unpaid, shall be due and payable on the date sixty days from the date hereof. This Note, and the payment hereof, is guaranteed by Pollution Research and Control Corp., 506 Paula Avenue, Glendale, California 91201, owner of record and beneficially of all of the issued and outstanding shares of common stock, $.01 par value per share, of the Maker. The Maker may prepay any part or all of this Note at any time without penalty. Each payment or pre-payment made by the Maker hereunder shall be applied first to the payment or rep- payment of accrued and unpaid interest, if any, due on the unpaid principal balance of this Note and the remainder of each payment or pre-payment made by the Maker shall be applied to the reduction of the unpaid principal balance hereof. If default is made in the payment of this Note, as and when the same is or becomes due the Holder may, after notice and failure to cure as hereinafter provided, without additional notice or demand, declare the entire unpaid principal balance hereof and accrued and unpaid interst, if any, at once due and payable. Except as otherwise specifically set out herein, the Maker waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of acceleration of the indebtedness due hereunder, and agrees that the time of payments hereof may be extended without notice at any time and from time-to-time, and for periods of time for a term or terms in excess of the original term without notice or consideration to, or consent from the Maker without same constituting a waiver of the Holder's rights under this Note. If payment is not received by the tenth day after it is due, then the Holder agrees to give written notice of such to the Maker. If payment is not received within five days of said notice then the Holder may at his election accelerate this Note. The Holder may charge a late charge of two per cent (2%) of the amount of the payment received after the tenth day such payment is due. If the entire outstanding principal balance becomes due, the Maker agrees to pay the Holder's reasonable costs (including reasonable attorney's fees and court costs) in collecting this Note, including the reasonable costs of obtaining and enforcing a judgment for any balance due on this Note. This Note has been executed in the City identified in the heading and delivered to the Holder at the address stated herein. It is to be performed, in whole or in part, in the State of California, and the laws of such state shall govern the validity, construction, enforcement and interpretation of this Note. Jurisdiction and venue for any action hereunder shall be in the County of the City identified in the heading. The Maker represents that it is duly authorized and empowered to enter into, deliver, perform and be fully bound by all of the terms, provisions and conditions of this Note. The Maker also represents that the making and delivery of this Note, and the performance of any agreement or instrument made in connection herewith, does not conflict with or violate any other agreement to which the Maker is a party. No provision of this Note shall require the payment or permit the collection of interest in excess of the maximum permitted by law, and in the event of any such excess, neither the Maker nor its successors or assigns shall be obligated to pay any such excess to the extent that it is more than the amount permitted by law. If an excess amount is received, charged, collected or applied as interest, it shall automatically be made so as to reduce the rate to that permitted by law and any excess interest then received, charged or collected shall be applied to reduce the amount of any collateral to which the Holder is entitled. In the event that any word, phrase, clause, sentence or other provision hereof shall violate any applicable statute, ordinance or rule of law in any jurisdiction in which it is used, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof. IN WITNESS HEREOF, this Note is executed on the date and year above written. DASIBI CHINA, INC. By: /s/ Albert E. Gosselin, President EX-10.216 21 AMENDMENT EXHIBIT 10.216 AMENDMENT TO COMPROMISE AND SETTLEMENT AGREEMENT This Amendment to Compromise and Settlement Agreement (the "Agreement") is made and entered into on the date entered below by and between Fidelity Funding, Inc. ("Fidelity") and Pollution Research and Control Corporation ("Pollution Research"). Fidelity and Pollution Research are referred to herein singularly as a "Party" and collectively as the "Parties." WHEREAS, on or about April 7, 1998 Fidelity filed suit in the 44th Judicial District Court of Dallas County, Texas against Pollution Research in a case styled Fidelity Funding, Inc. v. Pollution Research and Control Corporation and numbered 98-02820-B (the "Lawsuit")' and, WHEREAS, on or about June 22, 1998 a Default Judgment was entered in the Lawsuit in favor of Fidelity in the amount of $766,708.77 together with attorneys' fees in the amount of $1,322.50, pre-judgment interest from and after June 9, 1998 at the per diem rate of $326.42, costs and post-judgment interest at the rate of 15% per annum (the "Judgment"); and, WHEREAS, pursuant to a Compromise Settlement and Release Agreement dated as of August 12, 1999 certain agreements were reached between the Parties regarding the Judgment and related matters (the "Original Settlement Agreement"); and WHEREAS, the Parties are desirous of modifying the Original Settlement Agreement as set forth herein; NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, Fidelity and Pollution Research agree as follows: 1. Fidelity and Pollution Research agree and acknowledge that Fidelity has incurred attorneys' fees from and after February 1, 2000 with its Texas and California counsel in the aggregate amount not to exceed $5,000.00 (the "Attorneys Fees"), and Pollution Research agrees to pay the Attorneys' Fees. 2. Fidelity and Pollution Research agree and acknowledge that the total outstanding amount of the Judgment as of March 23, 2000 is $483,949.27 (the "Judgment Amount"), and that the outstanding portion of the Judgment Amount shall accrue interest from and after March 23, 2000 at the rate of 15% per annum. The Judgment Amount and Attorneys' Fees together with any interest accruing on the Judgment Amount is referred to herein as the "Settlement Amount". 3. Contemporaneously with the execution of this Agreement and in no event later than 5:00 p.m. on March 24, 2000, Pollution Research shall pay to Fidelity the sum of $200,000.00 to be applied to the Settlement Amount as of the date of receipt. 4. In consideration for such payment, for a period of 14 days from and after the date hereof (the "Forbearance Period"), Fidelity shall forbear from taking any affirmative action to collect and enforce the Judgment including, but not limited to, execution, levy, garnishment, or attachment. In the event that the Settlement Sum is not paid in full, immediately upon the expiration of the Forbearance Period, Fidelity shall be fully entitled to enforce and collect the unpaid portion of the Judgment and to pursue any and all remedies available to it under applicable law to collect the unpaid portion of the Judgment and Attorneys' Fees. 5. Fidelity shall commence efforts to sell the Settlement Consideration Shares (as that term is defined in the Original Settlement Agreement) and shall deliver the Settlement Consideration Shares to Fred Ott together with documents requested by Ott which are necessary to transfer the shares within three days from the date hereof and in the event that the Settlement Consideration Shares are sold during the Forbearance Period for an amount sufficient to satisfy the outstanding balance of the Settlement Amount, any and all sale proceeds remaining following the satisfaction of the outstanding balance of the Settlement Amount and any unsold shares comprising the Settlement Consideration Shares shall be returned to Pollution Research. If, however, the Settlement Consideration Shares are sold and the proceeds from the sale are insufficient to satisfy the outstanding balance of the Settlement Amount, Pollution Research shall pay the shortfall together with any accrued but unpaid interest thereon. Further, in the event that the Settlement Consideration Shares are sold following the expiration of the Forbearance Agreement for an amount in excess of the Settlement Amount, Fidelity shall be entitled to retain any such excess. For purposes of this Agreement, the sale shall be deemed to be completed upon a transfer of the shares provided, however, that the proceeds are distributed to Fidelity within 10 days of such transfer. 6. The Parties expressly agree and acknowledge that the Warrants (as that term is defined in the Original Settlement Agreement) are expressly excluded from the Settlement Consideration Shares. Pollution Research hereby agrees that unless the Warrants are sold by Fidelity prior to such registration, Pollution Research shall include the shares represented by the Warrants in its next registration of shares. Pollution Research shall use its best efforts to register the shares represented by the Warrants as soon as possible, and in any event shall cause the shares represented by the Warrants to be registered on or before the sixth month anniversary of this Agreement. Notwithstanding the foregoing, Fidelity shall have the right but not the obligation to sell the Warrants at any time during the six month period or thereafter. 7. Upon payment in full of the Settlement Amount, Fidelity shall execute a release of the Judgment. 8. This Agreement shall be governed by and construed in accordance with the laws of the state of Texas. 9. All Parties to this Agreement have had the benefit of counsel of their choice and have been afforded an opportunity to review this Agreement with their chosen counsel. 10. This Agreement may be executed in a number of counterparts all of which together shall for all purposes constitute one agreement, binding on all of the Parties, notwithstanding that all of the Parties have not signed the same counterpart, and it shall not be necessary to produce more than one counterpart of this Agreement for evidentiary purposes. 11. This Agreement may be modified by written instrument only, signed by all Parties. SIGNED this 24th day of March, 2000. FIDELITY FUNDING, INC. By: /s/ Roger Marshall POLLUTION RESEARCH AND CONTROL CORPORATION By: /s/ Albert E. Gosselin President EX-10.217 22 WARRANT EXHIBIT 10.217 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 87,141 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Phillip T. Huss or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. E 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer 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. EX-10.218 23 WARRANT EXHIBIT 10.218 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 187,858 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Ronald E. Patterson or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer 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. EX-10.219 24 WARANT EXHIBIT 10.219 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 46,875 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Lee Sion or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Three Dollars and 10/100 ($3.10) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin --------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ------------------------------------------- Address: ------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. EX-10.220 25 WARRANT EXHIBIT 10.220 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Steven Sion or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Three Dollars and 10/100 ($3.10) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) Address: --------------------------------------------- --------------------------------------------- EX-10.221 26 WARRANT EXHIBIT 10.221 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 10,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Patricia Cudd or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/S/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ------------------------------------------ Address: ------------------------------------------ Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. EX-10.222 27 WARRANT EHXIBIT 10.222 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 14,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Alan L. Talesnick or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /S/ Albert E. Gosselin ---------------------------------------- Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ------------------------------------------- Address: ------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. EX-10.223 28 WARRANT EXHIBIT 10.223 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, William T. Richey or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY: /s/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ------------------------------------------- Address: ------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. EX-10.224 29 WARRANT EXHIBIT 10.224 THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND THUS MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE. WARRANT TO PURCHASE 33,333 SHARES OF COMMON STOCK OF POLLUTION RESEARCH AND CONTROL CORP. FROM MARCH 31, 2000 VOID AFTER 5:00 P.M., LOS ANGELES TIME, ON MARCH 31, 2003 This certifies that, Maria Molinsky or registered assigns, is entitled, subject to the terms set forth below, to purchase from Pollution Research and Control Corp., a California corporation (the "Company"), the above number of fully paid and nonassessable shares of Common Stock of the Company ("Common Stock") at a purchase price of Four Dollars ($4.00) per share ("Purchase Price"). The Purchase Price and number of shares of Common Stock issuable upon exercise hereof shall be subject to adjustment as provided in this Warrant. This Warrant is exercisable at any time, or from time to time, to and including 5:00 p.m., Los Angeles time, on March 31, 2003, unless sooner exercise is required pursuant to the terms of this Warrant. DEFINITIONS. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: 1.1 "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Warrant. 1.2 "Common Stock," when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class of the Common Stock of the Company presently authorized and stock of any other class into which those shares may hereafter be changed. 1.3 The terms "Warrant holder," "holder of this Warrant," "holder," or similar terms when the context refers to a holder of the Warrant, refers to any person who shall at the time be the registered holder of the Warrant. 2. EXERCISE. The holder of this Warrant may exercise it in full by surrender of this Warrant, with the form of subscription at the end of this warrant duly executed by the holder, to the Company at its principal office, accompanied by payment in the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock specified on the face of this warrant as may be adjusted pursuant to the terms of this Warrant. Payment shall be made in cash, cashier's or certified check payable to the Company, by the surrender of any notes of the Company having an unpaid principal and interest balance at least equal to such payment (designating the portion of such balance to be applied), or by any combination of such methods. The holder of this Warrant may exercise it in part by surrendering it, accompanied by payment as provided above, except that the amount payable by the holder on such partial exercise shall be the amount obtained by multiplying the Purchase Price by the number of shares of Common Stock (without giving effect to any adjustment of that number) designated by the holder in a written statement accompanying this Warrant. On partial exercise, the Company shall, unless this Warrant has expired, promptly issue and deliver to the holder of this Warrant a new Warrant or Warrants of like tenor and dated the date hereof in the name of that holder providing for the right to purchase that number of shares of Common Stock (without giving effect to any adjustment of that number) for which this Warrant has not been exercised. In the event the Common Stock issuable upon exercise of this Warrant is not then registered under the Securities Act of 1933, as amended, the holder of this Warrant shall, upon exercise of this Warrant, deliver to the Company an investor's certificate with respect to such shares to the effect that such shares are being acquired for investment purposes only and for its own account, and not as a nominee or agent for any other person and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended. 3. ISSUANCE OF CERTIFICATES. As soon as possible after full or partial exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate, or certificates, for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled on such exercise, together with any other securities and property to which that holder is entitled on such exercise under the terms of this Warrant. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Purchase Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional share will be issued on exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the Purchase Price. 4. SUBDIVISIONS OR COMBINATIONS. If, at any time during the term hereof, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up, then, immediately following the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased and the Purchase Price shall be decreased in proportion to such increase in outstanding shares. If at any time during the term hereof the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, immediately following the record date for such combination, the number of shares of Common Stock issuable upon exercise of this Warrant shall be decreased and the Purchase Price shall be increased in proportion to such decrease in outstanding shares. If the Company shall, at any time, subdivide or combine its outstanding shares of Common Stock, pay a dividend of other securities to the holders of such shares, or pay a dividend of shares of Common Stock to holders of any such stock of the Company of any class, this Warrant shall, after that subdivision, combination, or dividend, evidence the right to purchase the number of shares of Common Stock or other securities that would have been issuable to the holder of this Warrant as a result of that subdivision, combination or dividend with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision, combination, or dividend or any record date thereafter. If the Company shall at any time subdivide the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately before that combination shall be proportionately increased. Any judgment under this Section 4 shall become effective at the close of business on the date the subdivision, combination or dividend becomes effective retroactive to the record date therefor, if any. 5. REORGANIZATION, RECLASSIFICATION. If the Common Stock issuable on exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above, the holder of this Warrant shall, on its exercise, be entitled to purchase, in lieu of the Common Stock which that holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock which the holder of this Warrant would have owned or have been entitled to receive after such change, had this Warrant been exercised immediately before that change or any record date therefor. 6. CONSOLIDATION, MERGERS. If at any time there shall be a capital reorganization of the Common Stock issuable upon exercise of this Warrant (other than a combination, reclassification, exchange or subdivision of shares provided for elsewhere in this Warrant) or a merger or consolidation of the Company with or into another corporation, or the sale of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, or sale, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive on exercise of this Warrant, during the period specified in this Warrant and on payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation, to which a holder of the Common Stock deliverable on exercise of this Warrant would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder of this Warrant after the reorganization, merger, consolidation, or sale such that the provisions of this Warrant (including adjustments of the Purchase Price then in effect and number of shares purchasable on exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event on exercise of this Warrant. 7. NOTICE. The Company shall promptly give written notice of each adjustment of the Purchase Price or the number of shares of Common Stock or other securities issuable on exercise of this Warrant, by certified mail, return receipt requested, postage prepaid, to the registered holder of this Warrant at that holder's address as shown on the Company's books. The notice shall state the adjustment and show in reasonable detail the facts on which that adjustment is based. If (i) the Company shall pay any dividend payable in stock on its Common Stock or make any other distributions to the holders of its Common Stock (other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant), or (ii) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other rights, or (iii) there shall be any capital reorganization or reclassification of the Company's Common Stock or consolidation or merger of the Company with or into another corporation, or (iv) there shall be any sale of all or substantially all of the Company's properties and assets, or (v) there shall be a voluntary of involuntary dissolution, liquidation, or winding up of the Company, or (vi) the Company shall have received an offer approved by the Board of Directors to purchase all or substantially of its assets; then, in each case, the Company shall give at least 15 calendar days prior written notice (by certified mail, return receipt requested) to the registered holder of this Warrant at the address of that holder shown on the books of the Company, of the date as of which the books of the Company shall close or a record shall be taken for such dividend, distribution, or subscription rights, or the date as of which the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up shall take place. That notice shall also specify the date as of which the holders of the Common Stock of record shall participate in that dividend, distribution, or subscription rights, or shall be entitled to exchange their Common Stock for securities or other property deliverable on such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding up (on which date, in the event of voluntary or involuntary dissolution, liquidation, or winding up of the Company, or consolidation or merger in which the Company is not a surviving entity or becomes a wholly-owned subsidiary, the right to exercise this Warrant shall cease). 8. COVENANTS. (a) The Company covenants that it will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action avoid, or seek to avoid, the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in carrying out all those terms and in taking all action necessary or appropriate to protect the rights of the holder of this Warrant against other impairment. Without limiting the generality of the above provision, the Company: (i) will take all necessary or appropriate action in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on exercise of this Warrant; (ii) will not increase the par value of the shares of Common Stock receivable on the exercise of this Warrant above the amount payable for those shares on such exercise; and (iii) will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. (b) The Company shall use its best efforts, on or before October 1, 2000, to file with the Securities and Exchange Commission (the "SEC"), a registration statement on the appropriate Form under the Securities Act of 1933, covering the sale by the Warrant holders in the open market of the shares of Common Stock issuable upon exercise of the Warrants as well as other shares of the Company's Common Stock owned by the Warrant holder. The Company also will undertake reasonable best efforts to cause the registration statement to become effective with the SEC as soon as possible after its filing. In addition, the Warrant holder will have piggyback registration rights on any registration statement filed by the Company (except on Forms S-8, S-4 or other non- applicable forms) with respect to the shares underlying the Warrants. 9. CHANGES IN WARRANT. The form of this Warrant need not be changed because of any adjustment in the Purchase Price or in the number of shares of Common Stock purchasable upon its exercise. A Warrant issued after any such adjustment or any partial exercise or in replacement may continue to express the same Purchase Price and the same number of shares of Common Stock (appropriately reduced in the case of partial exercise) as are stated on the face of this Warrant as initially issued, and that Purchase Price and the number of shares shall be considered to have been so changed as of the close of business on the date of adjustment. 10. LOST CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, upon delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 11. TRANSFERABILITY. This Warrant shall not be transferred or assigned unless the Company receives an opinion of counsel reasonably acceptable to the Company (which counsel may be counsel for the Company), stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended, and the registration and qualification requirements under applicable state law. 12. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with the laws of California. 13. TAXES. The Company shall pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of all or any part of this Warrant; provided, however, that the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Warrant. 14. RIGHTS OF WARRANT HOLDER. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 15. AMENDMENT. This Warrant and any of its terms may be changed only by a written instrument signed by the Company and the holder of this Warrant. DATED: March 31, 2000 The Company: POLLUTION RESEARCH AND CONTROL CORP., a California corporation BY:/S/ Albert E. Gosselin Albert E. Gosselin, Jr., President and Chief Executive Officer SUBSCRIPTION FORM TO: POLLUTION RESEARCH AND CONTROL CORP. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, shares of Common Stock of POLLUTION RESEARCH AND CONTROL CORP., and herewith makes payment of and requests that the certificates for those shares be issued in the name of, and delivered to , whose address is and if said number of shares shall not be all the shares now purchasable under the attached Warrant, the undersigned hereby requests that a new certificate be registered in the name of and delivered to the undersigned for the balance of the shares purchasable under the attached Warrant. DATED: (Signature) ------------------------------------------- Address: ------------------------------------------- Note: The above signature must correspond with the name written upon the face of the attached Warrant Certificate unless the Warrant has been properly and lawfully assigned. EX-21 30 LIST OF SUBSIDIARIES EXHIBIT 21 LIST OF SUBSIDIARIES Dasibi Environmental Corp. 506 Paula Avenue Glendale, CA 91201 EX-27 31 FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-1999 DEC-31-1999 214,216 0 1,101,690 0 1,387,711 3,106,416 410,281 207,129 5,892,077 1,760,205 0 0 0 7,840,920 0 5,802,077 7,314,975 7,328,475 5,142,575 0 370,106 0 336,675 (1,533,363) 2,659,000 1,125,637 0 0 0 1,125,637 0 0
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