As filed with the Securities and Exchange Commission on May 12, 2000
Registration No. 33- ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 77-0096608
-------------------------- --------------------------------
(State or Incorporation) (I.R.S. Employer Identification No.)
5380 North Sterling Center Drive
Westlake, California 91361
(Address of principal executive offices and zip codes)
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
(Full title of the plan)
------------------------
Copy To:
Marvin Mears, President Mark J. Richardson, Esq.
Environmental Products & Technologies Corporation Richardson & Associates
5380 North Sterling Center Drive 1299 Ocean Avenue, Suite 900
Westlake, California 91361 Santa Monica, California 90401
(818) 865-2205 (310) 393-9992
(Name, address and telephone
number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================
Proposed Proposed
Title of Each Class Maximum Maximum Amount of
of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Share Offering Price Fee
- ------------------------------------- --------------------- ----------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 492,728 shares $1.10(1) $542,000.80 $ 143.09
- ------------------------------------- --------------------- ----------------- ------------------ -----------------
Total 492,728 shares $1.10(1) $542,000.80 $ 143.09
==================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (h) and based upon the last sale price of
the Company's Common Stock on May 10, 2000 as reported on the OTC
Bulletin Board.
This Form S-8 consists of 41 pages, including exhibits. The index to
exhibits is set forth on page 8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Environmental Products & Technologies Corporation (the
"Company" or "Registrant") incorporates by reference in this Registration
Statement the following documents:
(a) The Registrant's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1999.
(b) The Registrant's quarterly report on Form 10-QSB for
the quarter ended December 31, 1999.
(c) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), since
December 31, 1997.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of the filing hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
General. The authorized capital stock of the Company consists
of 20,000,000 shares of Common Stock, par value $.01 per share, and 20,000,000
shares of Preferred Stock, par value $.01 per share. At May 10, 2000, the
Company had 8,905,597 shares of Common Stock issued and outstanding and 2,000
shares of Series A Convertible Preferred Stock issued and outstanding.
Common Stock. All outstanding shares of Common Stock are, and
the shares to be issued as contemplated herein will be, fully paid and
nonassessable. As a class, holders of the Common Stock are entitled to one vote
per share in all matters to be voted upon by the stockholders. Holders of Common
Stock are not entitled to cumulative voting rights with respect to the election
of directors. Holders of Common Stock are entitled to receive such dividends
when and as declared by the Board of Directors out of the surplus or net profits
of the Company legally available therefor, equally, on a share for share basis.
The Company does not anticipate paying dividends in the near future. In the
event of a liquidation, dissolution or winding-up of the Company, the holders of
Common Stock are entitled to share equally, on a share for share basis, in all
assets remaining after payment of liabilities, subject to the prior distribution
rights of any other classes or series of capital stock then outstanding. The
Common Stock has no preemptive rights and is neither redeemable nor convertible,
and there are no sinking fund provisions. As of May 10, 2000, the Company's
8,905,597 shares of Common Stock outstanding were held by 989 stockholders of
record.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock
covered by this Prospectus will be passed upon for the Company by Richardson &
Associates, counsel to the Company, 1299 Ocean Avenue, Suite 900, Santa Monica,
California, 90401. In consideration for legal work being performed by Richardson
& Associates for EPTC, EPTC has issued 20,000 shares of its Common Stock to Mark
J. Richardson, Esq., which are covered by this Registration Statement.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and EPTC's Bylaws provide
that a director of EPTC will have no personal liability to EPTC or its
shareholders for monetary damages for breach of fiduciary duty as a director
except (i) for acts or omissions that involve intentional misconduct or a
knowing and culpable violation of law, (ii) for acts or omissions that a
director believes to be contrary to the best interests of the corporation or its
shareholders or that involve the absence of good faith on the part of the
director, (iii) for any transaction from which a director derived an improper
personal benefit, (iv) for acts or omissions that show a reckless disregard for
the director's duty to the corporation or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course
of performing a director's duties, of a risk of serious injury to the
corporation or its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the corporation or its shareholders, or (vi) for an unlawful dividend,
distribution, stock repurchase or redemption. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
EPTC's Bylaws and the Delaware General Corporation Law contain
comprehensive provisions for indemnification of directors, officers and agents
of Delaware corporations against expenses, judgments, fines and settlements in
connection with litigation. EPTC has a policy of providing indemnification for
its executive officers, directors and members of its committees, within the
scope of the Delaware General Corporation Law. We have entered into
indemnification agreements with our executive officers, directors and committee
members. Under the Delaware General Corporation Law, other than an action
brought by or in the right of EPTC, such indemnification is available if it is
determined that the proposed indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of EPTC and,
with respect to any criminal action or proceeding, has no reasonable cause to
believe his conduct was unlawful. In actions brought by or in the right of EPTC,
such indemnification is limited to expenses (including attorneys' fees) actually
and reasonably incurred if the indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of EPTC. No
indemnification may be made, however, in respect of any claim, issue or matter
as to which such person is adjudged to be liable to EPTC unless and only to the
extent that the court in which the action was brought determines that in view of
all the circumstances of the case, the person is fairly and reasonably entitled
to indemnity for such expenses as the court deems proper. To the extent that the
proposed indemnitee has been successful in defense of any action, suit or
proceeding, he must be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the action. EPTC's
Articles of Incorporation, as amended, provide for indemnification of the
directors and officers of EPTC against liabilities to the maximum extent
provided by Delaware law.
EPTC maintains insurance to protect officers and directors
from certain liabilities, including liabilities against which we cannot
indemnify our directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The shares of Common Stock which will be issued pursuant to
this registration statement will be issued pursuant to Rule 506 of Regulation D
promulgated under Section 4(2) of the Securities Act of 1933, as amended.
ITEM 8. EXHIBITS.
4.1 Articles of Incorporation of the Registrant, as amended.(1)
4.2 Bylaws of the Registrant.(1)
5.1 Opinion of Richardson & Associates as to the legality of the
securities being registered.
3
<PAGE>
10.1 Settlement Agreement and Mutual General Release By and Between
Marvin Mears, Morris Lerner, John Bird,Derek Bird and David Bird.
10.2. Agreement and Mutual Release By and Between EPTC and Lifeline
Enterprises, LLC.
23.1 Consent of Richardson & Associates(included as part of Exhibit
5.1).
23.2 Consent of Singer, Lewak, Greenbaum & Goldstein, LLC, Independent
Certified Public Accountants.
23.3 Consent of Bruce T. Andersen, Independent Certified Public
Accountant
24.1 Power of Attorney (contained on page 5 hereof).
99.1 Reoffer Prospectus, dated May 12, 2000.
- ------------------------------------------------------
(1) Incorporated by reference from the exhibits included with the Company's
Registration Statement (No. 333-53397) on Form SB-2 A filed with the SEC on
September 17, 1998.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement (or the most
recent post-effective amendment hereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in this Registration
Statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement or any material change to such
information in this Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
4
<PAGE>
B. The undersigned Registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
C. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the finial adjudication of such issue.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Marvin Mears, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming that said attorney-in-fact and agent or the substitute or substitutes
of him, may lawfully do or cause to be done by virtue hereof.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused his
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California on the 10th day
of May 2000.
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
By: /s/ Marvin Mears
-----------------------
Marvin Mears, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Marvin Mears President and Director (Chief Executive May 10, 2000
- ---------------- Officer)
Marvin Mears
/s/ Joel G. Wadman Secretary (Chief Financial Officer) May 10, 2000
- ------------------
Joel G. Wadman
</TABLE>
6
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 2000
REGISTRATION NO. 33-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
EXHIBIT VOLUME
TO THE
REGISTRATION STATEMENT
================================================================================
7
<PAGE>
INDEX TO THE EXHIBIT VOLUME TO
REGISTRATION STATEMENT ON FORM S-8
4.1 Articles of Incorporation of the Registrant,as amended.(1)
4.2 Bylaws of the Registrant.(1)
5.1 Opinion of Richardson & Associates as to the legality of
the securities being registered.
10.1 Settlement Agreement and Mutual General Release By and
Between EPTC, Marvin Mears, Morris Lerner, John Bird,
Derek Bird and David Bird
10.2 Agreement and Mutual Release By and Between EPTC and
Lifeline Enterprises, LLC
23.1 Consent of Richardson & Associates (included as part of
Exhibit 5.1).
23.2 Consent of Singer, Lewak, Greenbaum & Goldstein, LLP,
Independent Certified Public Accountants.
23.3 Consent of Bruce T. Andersen, Independent Certified Public
Accountant
24.1 Power of Attorney.
99.1 Reoffer Prospectus, dated May 12, 2000.
- -----------------------------------------------------------------
(1) Incorporated by reference from the exhibits included in the Company's
Registration Statement (No. 333-53397) on Form SB-2/A filed with the SEC on
September 17, 1998.
EXHIBIT 5.1
LEGAL OPINION
<PAGE>
RICHARDSON & ASSOCIATES
ATTORNEYS AT LAW
WILSHIRE PALISADES BUILDING
1299 OCEAN AVENUE
SUITE 900
SANTA MONICA, CALIFORNIA 90401
TELEPHONE (310) 393-9992
FACSIMILE (310) 393-2004
May 12, 2000
Environmental Products & Technologies Corporation
5380 North Sterling Center Drive
Westlake Village, California 91361
Re: Environmental Products & Technologies Corporation - Validity of
------------------------------------------------------------------
Issuance of Shares
------------------
Ladies and Gentlemen:
We have acted as special counsel to you in connection with the
registration on Form S-8 (File No. 33-______) under the Securities Act of 1933,
as amended ("Registration Statement"), of a total of 492,728 shares of the
Common Stock of Environmental Products & Technologies Corporation, par value
$.01 per share (the "Shares"). You have requested our opinion in connection with
the registration of the Shares covered by the Registration Statement. In
connection with our acting as counsel, we have examined the laws of the State of
California together with certain other documents and instruments prepared on
behalf of Environmental Products & Technologies Corporation as we have deemed
necessary and relevant in the preparation of our opinion as hereinafter set
forth.
In our examination, we have assumed the genuineness of all signatures
on original documents and the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, conformed or photostatic copies of originals, the authenticity of
such latter documents, and the proper execution, delivery and filing of the
documents referred to in this opinion.
Based upon the foregoing, we are of the opinion that the Shares to be
issued by Environmental Products & Technologies Corporation have been and will
be duly created and have been and will be validly issued shares of the Common
Stock, par value $.01 per share, of Environmental Products & Technologies
Corporation. Upon issuance of the Shares, the Shares will be fully paid and
nonassessable.
For the purposes of this opinion, we are assuming that the appropriate
certificates are duly filed and recorded in every jurisdiction in which such
filing and recordation is required in accordance with the laws of such
jurisdictions. We express no opinion as to the laws of any state or jurisdiction
other than California.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and we further consent to the use of our name in the Registration
Statement and the Prospectus which is a part of said Registration Statement.
Respectfully submitted,
By: /s/ Richardson & Associates
-------------------------------
Richardson & Associates
EXHIBIT 10.1
SETTLEMENT AGREEMENT AND
MUTUAL GENERAL RELEASE
<PAGE>
SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE
1. Parties.
The parties to this Settlement Agreement and Mutual General Release
("Agreement") are:
a. "Plaintiffs." John Bird, David Bird and Derek Bird.
b. "EPTC." Environmental Products & Technologies Corporation,
a California corporation.
c. "Mears." Marvin Mears.
d. "Lerner." Morris Lerner
e. "Defendants." EPTC, Mears and Lerner.
2. Recitals.
This Agreement is entered into with respect to the following facts:
a. On or about March 19, 1999, Plaintiffs filed a lawsuit
against Defendants entitled John Bird, David Bird and Derek
Bird v. Environmental Products & Technologies Corporation,
et al.. Los Angeles Superior Court Case Number BC207095
(the "Action").
b. Defendants Mears and Lerner were dismissed on demurrer, and
EPTC eventually answered Plaintiffs' Second Amended
Complaint, denying the material allegations thereof and
asserting various defenses thereto.
c. The parties have now agreed to resolve and settle their
differences and disputes, and each having determined that
it is to their individual advantage to do so, now agree to
settle and compromise all disputes and claims between them.
Accordingly, without the admission of any liability, the
parties agree as follows:
3. Stock Delivery.
On or before May 5, 2000, EPTC shall deliver to Plaintiffs'
certificates representing a total of 140,000 shares of free trading,
non-restricted stock in EPTC, registered as follows:
John Bird 70,000 shares
Derek Bird 42,000 shares
David Bird 28,000 shares
4. Release by Defendants.
Effective upon the execution hereof, EPTC, Mears and Lerner, for good
and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, for themselves, their heirs, successors and assigns, do
hereby release and forever discharge Plaintiffs and their employees,
agents, attorneys, successors, assigns, heirs, executors and
administrators, and each of them (collectively "the Bird Releasees"), from
any and all claims, demands, causes of action, and liabilities of every
kind and nature whatsoever, known and unknown, suspected and unsuspected,
which Plaintiffs ever had, now have, and hereafter can, shall or may have,
from the beginning of time to the date hereof, including but not limited to
any claims, demands, causes of action or liabilities arising from (a) any
services performed by Plaintiffs for EPTC, Mears or Lerner, and (b) any
services performed by Plaintiffs for any other person or entity in the
waste management, composting or recycling business, including any present
or future competitor of EPTC.
<PAGE>
5. Release by Plaintiffs.
Effective only upon the completed delivery of 100% of the stock
provided for in paragraph 3 above, Plaintiffs, for themselves, their heirs,
successors and assigns, will release and forever discharge Defendants,
their officers, directors, employees, agents, attorneys, successors,
assigns, heirs, executors and administrators, and each of them
(collectively, "the Defendant Releasees") from any and all claims, demands,
causes of action and liabilities of any kind and nature whatsoever, known
and unknown, suspected and unsuspected, which Plaintiffs ever had, then
have and thereafter can, shall or may have from the beginning of time to
the effective date hereof including, but not limited to, any claims,
demands, causes of action or liabilities that were asserted or could have
been asserted in the Action.
6. Power to Release.
The parties each represent and warrant to each other that they are the
sole owners of the claims, demands, causes of action and liabilities which
they are releasing, and that they have full power to give the releases
provided for herein. The parties further represent and warrant to each
other that they have not assigned or transferred any of the claims,
demands, causes of action or liabilities released herein and the parties
each agree to indemnify and hold the other harmless from and against any
claims, demands, causes of action and liabilities, including attorneys'
fees incurred, arising out of the assertion by any third party of any
claims released herein.
7. Waiver of Unknown Claims.
The parties each expressly waive the rights and benefits of section
1542 of the California Civil Code, which provides:
"Section 1542. General Release - Claims Extinguished. A general release
does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor."
8. Representation by Counsel.
Plaintiffs have been represented in this matter by Dennis A. Kendig of
Kendig & Ross, and Defendants have been represented in this matter by David
I. Lefkowitz of the Law Offices of David I. Lefkowitz. The parties have
each entered into this Agreement and have given the releases provided for
herein upon the advice of said counsel. The parties each represent and
warrant to each other that they have made such investigation of their
possible rights and claims that they deem appropriate, and they each agree
that they shall not be entitled to set aside the releases provided for
herein even if they hereafter learn that their understanding of the facts
or law was incorrect or for any other reason. The parties affirm that this
Agreement is intended to be final and binding between them, regardless of
any claim of misrepresentation, promise made without intention to perform,
concealment of fact, mistake of fact or law, or any other circumstance
whatsoever.
9. Costs and Attorneys Fees.
Each party shall bear his or its own attorney's fees and costs incurred
in the Action.
10. Integration.
This Agreement contains a single integrated contract expressing the
entire agreement of the parties. There are no other agreements, written or
oral, express or implied, prior or collateral, between the parties, except
the agreement set forth herein. No representative of any party hereto has
or had any authority to make any representations or promises not contained
in this Agreement, and each of the parties acknowledge they have not
executed this Agreement in reliance upon any such representation or
promise. This Agreement cannot be modified or changed except by a written
instrument signed by each of the parties.
<PAGE>
11. Governing Law; Jurisdiction and Venue.
This Agreement shall be governed by California law. The parties each
submit to the personal jurisdiction of the Los Angeles County Superior
Court for the resolution of any claims arising hereunder.
12. Captions and Interpretation.
Paragraphs, titles, and captions contained herein are inserted for
convenience and reference, and are not intended to define, limit or
describe the scope of the Agreement or any provision thereof. No provision
of the Agreement is to be interpreted for or against any party on the basis
that any particular party or his attorney drafted such provision.
13. Attorneys Fees.
The prevailing party in any dispute arising hereunder shall be entitled
to recover his or its reasonable attorney's fees and costs incurred in
enforcing this Agreement or in pursing claims for any breach thereof.
IN WITNESS WHEREOF, the undersigned hereby execute this Settlement
Agreement and Mutual General Release as of April 14, 2000.
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES
CORPORATION, a Delaware corporation
By:/s/ Marvin Mears
---------------------------
Marvin Mears, President
/s/ Morris Lerner
-----------------
Morris Lerner
/s/ John Bird
-------------
John Bird
/s/ Derek Bird
--------------
Derek Bird
/s/ David Bird
--------------
David Bird
EXHIBIT 10.2
AGREEMENT
AND MUTUAL RELEASE
<PAGE>
AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT AND MUTUAL RELEASE (hereinafter "Agreement") dated April
14, 2000 between Lifeline Enterprises, L L C, a Utah limited liability company,
having an office at 944 East 200 North, Springville, Utah 84663 (hereinafter
"Lifeline") and Environmental Products & Technologies Corporation, a Delaware
corporation having an office at 5380 North Sterling Center Drive, Westlake
Village, California 9163 1 (hereinafter "EPTC").
WHEREAS, Lifeline is the registered owner of U.S. Patent No. 5,981,270
for Bio- Catalytic Oxidation Reactor and the corresponding pending P.C.T. patent
application; and
WHEREAS, Lifeline owns EPTC stock certificates Nos. 0611 & 0612 for
50,000 shares of EPTC common stock which have been held for over two years; and
WHEREAS, EPTC desires to acquire U.S. Patent No. 5,981,270 and the
corresponding P.C.T. application and is willing to remove the restrictions from
the EPTC stock certificates 0611 & 0612;
WHEREAS, EPTC and Lifeline are parties to two Letters of Understanding,
one dated Nov 5, 1997 and the second dated May 18, 1 998, ( the "Letters of
Understanding"), and
WHEREAS, Lifeline and EPTC and their respective principals, agents and
employees desire to amicably terminate any and all contracts and business
relationship between them and in accordance therewith to enter into a mutual
release of all claims and causes of action which exist or may in the future
arise out of said contracts and/or relationship heretofore existing between
these parties.
NOW, THEREFORE, in consideration of the mutual promises and obligations
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by this Agreement, the parties
hereto agree as follows.
1. Patent Rights. Lifeline hereby agrees to deliver to EPTC a formal
assignment of all right, title and interest in and to U S Patent
No. 5,981,270 for Bio-Catalytic Oxidation Reactor, together with
an assignment of the corresponding P.C.T. patent application.
2. Restricted Stock. EPTC hereby agrees to deliver to Lifeline an
opinion by EPTC legal counsel sufficient to effectuate removal of
all restrictions from EPTC certificates 0611 & 0612.
3. Free-trading Stock. EPTC hereby agrees to deliver to Lifeline
60,000 shares of unrestricted, tree-trading stock of EPTC.
4. Closing and Delivery. All assignments, opinions, certificates
and/or documents called for by this Agreement shall be delivered
to the respective parties at the time of execution of this
Agreement. Closing shall be at a time and place mutually agreeable
to the parties, but shall occur on or before May 05, 2000.
5. Release by EPTC. Effective upon the execution hereof EPTC, for
good and valuab1e consideration, the adequacy and receipt of which
are hereby acknowledged, for itself, its successors and assigns,
do hereby release and forever discharge Lifeline and its members
(Gary D. Roberts, Linda L. Roberts, Verlin J. Roberts and Robert
B. Crouch ), employees, agents, attorneys, successors, assigns,
heirs, executors and administrators, and each of them (
collectively "the Lifeline Re1easees"), from any and all claims,
demands, causes of action, and liabilities of every kind and
nature whatsoever, known and unknown, suspected and unsuspected,
which EPTC ever had, now has, and hereafter can, shall, or may
have, from the beginning of time to the date hereof, including but
not limited to any claims, demands, causes of action or
liabilities arising from (a) Life1ine's obligations under the
Letters of Understanding, and(b) any services performed by the
Lifeline Releasees for any other person or entity in the waste
management, composting or recycling business, including any
present or future competitor of EPTC.
<PAGE>
6. Release by Lifeline. Effective only upon the completed delivery of
100% of the stock provided for in paragraph 3 above, Lifeline, for
itself, successors and assigns, will release and forever discharge
EPTC and its officers, directors, employees, agents, attorneys,
successors, assigns, heirs, executors and administrators, and each
of them (collectively, "the EPTC Releasees") from any and all
claims, demands, causes of action and liabilities of any kind and
nature whatsoever, known and unknown, suspected and unsuspected,
which Lifeline ever had, then has and thereafter can, shall or may
have from the beginning of time to the effective date hereof
inc1uding, but not limited to, any claims, demands, causes of
action or liabilities arising from EPTC's obligations under the
Letters of Understanding.
7. Power to Release. The parties each represent and warrant to each
other that they are the sole owners of the claims, demands, causes
of action and liabilities which they are releasing, and that they
have full power to give the releases provided for herein The
parties further represent and warrant to each other that they have
not assigned or transferred any of the claims, demands, causes of
action or liabilities released herein and the parties each agree
to indemnify and hold harmless from and against any claims,
demands, causes of action and liabilities, including attorneys'
fees incurred, arising out of the assertion by any third party of
any claims released herein.
8. Waiver of Unknown Claims. The parties each expressly waive the
provisions, rights and benefits of section 1542 of the California
Civil Code, which provides:
"Section 1542 General Release-Claims Extinguished. A general
release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
9. Representation by Counsel. Lifeline has been represented in this
matter by John L. Runft of the Law Offices of John L Runft, and
EPTC have been represented in this matter by David I. Lefkowitz of
the Law Offices of David I Lefkowitz. The parties have each
entered into this Agreement and have given the releases provided
for herein upon the advice of counsel. The parties each represent
and warrant to each other that they have made such investigation
of their possible rights and claims that they deem appropriate,
and they each agree that they shall not be entitled to set aside
the releases provided herein even if they hereafter learn that
their understanding of the facts or law was incorrect or for any
other reason. The parties affirm that this Agreement is intended
to be final and binding between them, regardless of any claim or
misrepresentation, promise made without intention to perform,
concealment of fact, mistake of fact or law, or any other
circumstance whatsoever.
10. Notice. Any notices required or permitted to be given pursuant to
this Agreement shall be given by prepaid, certified mail,
addressed to the other parties indicated below or to any change of
address given one party to the other pursuant to written notice.
Lifeline: Lifeline Enterprises, L.L.C.
944 East 200 North
Springville, Utah 84663
EPTC: Environmental Products & Technologies Corporation
5380 North Sterling Center Drive
Westlake Village, California 91361
<PAGE>
11. General Provisions.
A. Entire Agreement. This Agreement constitutes and is the entire
agreement of the parties and supersedes all other prior
understandings and/or agreements between the parties regarding
the matters herein contained, whether verbal or written and fully
supersedes all prior negotiations, agreements, and understandings
of the parties including, but not limited to the Letters of
Understanding No representations or warranties shall be deemed to
have been made by either party in connection with this
transaction unless expressly herein set forth.
B. Assignment. Neither party shall be entitled to assign its
interest without the prior written approval of the other party.
C. Execution of Other Documents. Each of the parties agrees to
execute any other documents reasonably required to fully perform
the intentions of this Agreement.
D. Binding Effect. This agreement shall inure to and be binding upon
the parties hereto, their agents, employees, heirs, personal
representatives, successors and assigns.
E. No Waiver of Future Breach. The failure of one party to insist
upon strict performance or observance of this Agreement shall not
be a waiver of any future breach or of any terms or conditions of
this Agreement.
F. Attorney's Fees. In the event of any litigation arising out of
this Agreement, between any of the parties hereto, their heirs,
personal representatives, agents, successors or assigns, the
prevailing party shall be entitled to recover costs and
attorney's fees.
G. Time of Essence. The parties agree that time is of the essence in
regard to this Agreement.
H. Governing Law. This Agreement shall be governed and interpreted
by the laws of the State of California.
I. Execution of Multiple Originals. Two original counterparts of
this Agreement shall be executed by these parties.
J. Severability. In the event any provision of this Agreement
conflicts with the applicable law, such conflicts shall not
affect the provisions of this Agreement which can be given effect
without the conflicting provision.
IN WITNESS WHEREOF, the parties have hereunto set their hands the day
and year first above written.
ENVIRONMENTAL PRODUCTS &
TECHNOLOGIES CORPORATION,
a Delaware corporation
By: /s/ Marvin Mears
-----------------------
Marvin Mears, President
LIFELINE ENTERPRISES, LLC,
a Utah limited liability company
/s/ Robert Crouch
-----------------------
Robert Crouch, Manager
EXHIBIT 23.2
CONSENT OF SINGER, LEWAK, GREENBAUM & GOLDSTEIN, LLP
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The undersigned independent certified public accounting firm hereby
consents to the inclusion of its report on the financial statements of
Environmental Products & Technologies Corporation for the year September 30,
1999, and to the reference to it as experts in accounting and auditing relating
to said financial statements, in the Registration Statement on Form S-8 for
Environmental Products & Technologies Corporation dated May 10, 2000.
/s/ Singer, Lewak, Greenbaum & Goldstein, LLC
- ---------------------------------------------
Singer, Lewak, Greenbaum & Goldstein, LLC
Beverly Hills, California
May 10, 2000
EXHIBIT 23.3
CONSENT OF BRUCE T. ANDERSEN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The undersigned independent certified public accounting firm hereby
consents to the inclusion of its report on the financial statements of
Environmental Products & Technologies Corporation for the period ended December
31, 1999, and to the reference to it as experts in accounting and auditing
relating to said financial statements, in the Registration Statement on Form S-8
for Environmental Products & Technologies Corporation dated May 10, 2000.
/s/ Bruce T. Andersen
- ---------------------
Bruce t. andersen
Los Angeles, California
May 10, 2000
EXHIBIT 99.1
REOFFER PROSPECTUS
<PAGE>
- -6-
Dated May 12, 2000
PROSPECTUS
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
492,728 Shares of Common Stock
This Prospectus covers 492,728 shares of the Common Stock, par value
$.01 per share (the "Common Stock") of Environmental Products & Technologies
Corporation, a Delaware corporation ("EPTC"). The shares of Common Stock include
(a) 140,000 shares that may be issuable to three individuals formerly affiliated
with EPTC pursuant to a settlement and mutual general release agreement (the "SR
Agreement"), (b) 60,000 shares issuable to another former affiliate of EPTC
pursuant to an Agreement and Mutual Release (the "Lifeline Agreement"), (c)
20,000 shares issued to special legal counsel to EPTC for legal work performed
for EPTC, and (d) 272,728 shares issued to other legal counsel to EPTCfor legal
work performed and to be performed (collectively, the "Selling
Securityholders"). We will not receive any of the proceeds from the sale of
securities by the Selling Securityholders.
Copies of the SR Agreement and the Lifeline Agreement are attached to
this Prospectus as Exhibits A and B, respectively.
Our Common Stock is traded on the OTC Bulletin Board under the symbol
"EPTC." On May 10, 2000, the last bid price and ask price for the Common Stock
as reported on the OTC Bulletin Board was $1.10 and $1.25, respectively.
For a discussion of certain factors that should be considered in
connection with an investment in EPTC's Common Stock, see "Risk Factors"
beginning on page 3.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The Selling Securityholders may from time to time sell all or a portion
of the securities offered by this Prospectus in transactions in the
over-the-counter market, in negotiated transactions, or otherwise, at fixed
prices that may be changed, at market prices prevailing at the time of sale, or
at negotiated prices. The Selling Securityholders may effect such transactions
by selling such securities directly to purchasers or through dealers or agents
who may receive compensation in the form of discounts, concessions or
commissions from the Selling Securityholders and/or the purchasers of the
securities for whom they may act as agents.
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<PAGE>
ADDITIONAL INFORMATION
This Prospectus is part of a Registration Statement on Form S-8
(together with all amendments and exhibits (the "Registration Statement") which
has been filed by EPTC with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the securities offered by this Prospectus. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, you may read the Registration
Statement. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to in this Prospectus are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, you may read the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance with the Exchange Act we file reports, proxy and information
statements and other information with the Commission. Such reports, proxy and
information statements and other information, as well as the Registration
Statement and Exhibits of which this Prospectus is a part, filed by us may be
inspected and copied at the public reference facilities of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, as well as
at the following Regional Offices: 7 World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You may obtain copies of such material from the
Commission by mail at prescribed rates. You should direct your requests to the
Commission's Public Reference Section, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549. The Commission maintains a web site that
contains reports, proxies, and information statements regarding registrants that
file electronically with the Commission. The address of the web site is
http://www.secgov. Our Common Stock is traded on the Nasdaq Small Cap Market.
Reports and other information concerning us can also be obtained at the offices
of the National Association of Security Dealers, Inc., Market Listing Section,
1735 K Street, N.W., Washington, D.C., 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We hereby incorporate by reference into this Prospectus the following
documents previously filed with the Commission:
1. Our Annual Report on Form 10-KSB for the year ended September
30, 1999.
2. Our Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1999.
3. The description of our Common Stock contained in our
Registration Statement on Form SB-2/A, dated September 17,
1998.
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering are deemed incorporated by reference in this
Prospectus and are a part of this Prospectus from the date of the filing of such
documents. See "Additional Information." Any statement contained in a document
incorporated or deemed to be incorporated in this Prospectus by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
We will provide without charge to each person to whom this Prospectus
is delivered, upon request of any such person, a copy of any of the foregoing
documents incorporated in this Prospectus by reference, other than exhibits to
such documents not specifically incorporated by reference. Written or telephone
requests should be directed to our President at our principal executive offices:
Environmental Products & Technologies Corporation, 5380 North Sterling Center
Drive, Westlake Village, California, telephone number (818) 865-2205.
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<PAGE>
RISK FACTORS
Purchasing shares of Common Stock in Environmental Products &
Technologies Corporation is risky. You should be able to bear a complete loss of
your investment. You should carefully consider the following factors, among
others.
Forward-Looking Statements. The following cautionary statements are
made pursuant to the Private Securities Litigation Reform Act of 1995 in order
for EPTC to avail itself of the "safe harbor" provisions of that Act. The
discussions and information in this Prospectus including the documents
incorporated by reference may contain both historical and forward-looking
statements. To the extent that the Prospectus contains forward-looking
statements regarding the financial condition, operating results, business
prospects or any other aspect of EPTC, please be advised that our actual
financial condition, operating results and business performance may differ
materially from that projected or estimated by us in forward-looking statements.
We have attempted to identify, in context, certain of the factors that we
currently believe may cause actual future experience and results to differ from
our current expectations. The differences may be caused by a variety of factors,
including but not limited to adverse economic conditions, intense competition,
including entry of new competitors, increased or adverse federal, state and
local government regulation, inadequate capital, unexpected costs, lower
revenues and net income than forecast, price increases for supplies, inability
to raise prices, the risk of litigation and administrative proceedings involving
EPTC and its employees, higher than anticipated labor costs, the possible
fluctuation and volatility of EPTC's operating results and financial condition,
adverse publicity and news coverage, inability to carry out marketing and sales
plans, loss of key executives, technological advances or product obsolescence,
changes in general economic conditions, changes in interest rates, inflationary
factors, and other specific risks that may be alluded to in this Prospectus or
in other reports filed by us.
Accumulated Deficit; History of Operating Losses; Expectation of Future
Losses. We have experienced significant operating losses since our inception.
Such losses have resulted principally from no revenues from operations and costs
associated with the acquisition of our technologies and general and
administrative expenses. We have generated no revenues from operations and
incurred increased losses to date. We expect that we will continue to incur
losses until such time, if ever, as revenues from product sales are sufficient
to fund our continuing operations. Our profitability will depend on our ability
to commercialize our waste management system. We cannot assure that we will ever
generate sufficient revenues to achieve profitability.
Development Stage Company. We have been designated by our independent
auditors as a development stage company in accordance with SFAS 7 "Accounting
and Report by Development Stage Enterprises" which defines a development stage
company as an enterprise that devotes substantially all of its time to
establishing a new business and has not yet commenced its planned operations. At
this time we cannot assure that we will be able to raise sufficient capital and
develop a profitable market for our planned product. Our business is capital
intensive. We cannot assure that we will not encounter unforeseen difficulties
that may deplete capital resources more rapidly than anticipated, which would
require that we seek additional funds through equity, debt or other external
financing. In any event, it is likely that we will attempt to raise additional
capital to meet our obligations and to accelerate our growth. We cannot assure
that any additional capital resources which we may need will be available to us
if and when required, or on terms that will be acceptable to us. If additional
financing is required, or desired, we may be required to forgo a substantial
interest in our future revenues or dilute the equity interests of existing
stockholders, and a change in control of the Company may result. Further, if we
are unable to obtain necessary financing, we may be required to significantly
curtail our activities or cease operations.
Limited Operating History; New Business; No Product Sales. We have a
limited operating history and have not generated any revenues to date. We cannot
assure that we will be able to market our waste management system, products and
services successfully. While attempting to commercialize our products, we will
be subject to risks inherent in a new business. Such risks include unanticipated
problems relating to environmental regulatory compliance, the competitive
environment in which we operate and marketing problems, and additional costs and
expenses that may exceed current estimates. We cannot assure that, even after
the expenditure of substantial funds and efforts, we will ever achieve or
maintain a substantial level of sales of our products. The failure to
successfully market our products and services will have a material adverse
effect on our financial condition, business and results of operations.
3
<PAGE>
Uncertain Market Acceptance of Our Products. Through May 10, 2000, we
have had no sales of our waste management system. We cannot assure that
significant, or any, sales will occur or that our waste management system will
obtain broad, or even limited, market acceptance. The decision by a potential
customer to utilize our waste management system is, among other things,
technical in nature, requiring the customer to make an evaluation as to whether
changes in its capital equipment or operating procedures will be required in
order to realize the performance benefits of our products. We cannot assure that
potential customers will choose to change their equipment or established
procedures or be willing to incur any necessary costs to make such changes or
that the benefits derived from utilizing our waste management system will
outweigh the costs incurred to make such changes.
Further, we cannot assure that all customers will experience the
performance and cost advantages expected by us. For example, a by-product of our
waste management system is the ability to convert the methane by-product into
electricity. Such ability may be of little or no interest to consumers at a time
when electricity is relatively inexpensive. If we are not successful in
marketing our waste management system, our ability to generate revenues will be
greatly diminished and we will be dependent on other future products and
services that may be developed or otherwise obtained by us. We cannot assure
that our waste management system will be successfully marketed or that future
products and services will be developed or obtained.
Development Risks. EPTC is a development stage company. We have
products in various stages of development, and have not recognized any revenue
from the sale of our products. We have developed and plan to market new products
and new applications of technology and, accordingly, are subject to risks
associated with such ventures. Our probability of success must be considered in
light of the expenses and delays frequently encountered in connection with the
operation of a new business and the development of practical production
techniques for new products. Our failure to effect prompt repairs and otherwise
keep our waste management systems operating at targeted capacities could have a
material adverse effect on our business, financial condition and results of
operations. We may experience problems associated with the manufacturing,
assembling and engineering of additional waste management systems, including,
without limitation, cost overruns, start-up delays and technical or mechanical
problems. To date, we have engaged in only limited manufacturing and we cannot
assure that our efforts to expand our manufacturing capabilities will not exceed
estimated costs or take longer than expected, or that other unanticipated
problems will not arise that would materially adversely affect our business and
results of operations.
Dependence on Major Subcontractors and Suppliers. We rely on
subcontractors and suppliers to manufacture subassemble and perform certain
testing of all of the components of our waste management system. We plan to
outsource the manufacture of major components and complete final assembly and
testing of our waste management systems at our customers' operations. The
inability to develop relationships with, or the loss of, subcontractors or
suppliers, or the failure of our subcontractors or suppliers to meet our price,
quality, quantity and delivery requirements, could require us to reduce or
eliminate expenditures for research and development, production or marketing of
our products, or otherwise to curtail or discontinue our operations, which could
have a material adverse effect on our business, financial condition and results
of operations.
Product Warranty. We intend to warrant our waste management systems to
be free of defects in workmanship and materials for 90 days from installation at
the location of the end user. We cannot assure that we will not experience
warranty claims or parts failure rates in excess of those which we have assumed
in pricing our products and spare parts. Any such excess warranty claims or
spare parts failure rates could have a material adverse effect on our business,
financial condition or results of operations. We currently have no experience
with warranty claims relating to our products.
Dependence on a Single Product Line. We anticipate that we will derive
substantially all of our revenue in the foreseeable future from sales of our
waste management systems, related consumables and spare parts. If we are unable
to generate sufficient sales of our waste management systems due to market
conditions, manufacturing difficulties or other reasons, we may not be able to
continue our business. Similarly, if purchasers of our waste management systems
were to continue utilizing current waste management practices, our business,
results of operations and financial condition could be materially adversely
affected. Dependence on a single product line makes us particularly vulnerable
to the successful introduction of competitive products.
4
<PAGE>
No Product Liability Insurance. We could be subject to product
liability claims in connection with the use of the products that we sell. We
cannot assure that we would have sufficient resources to satisfy any liability
resulting from these claims or would be able to have our customers indemnify or
insure us against such claims. We do not currently carry product liability
insurance and we cannot assure that such coverage, if obtainable, would be
adequate in terms and scope to protect us against material adverse effects in
the event of a successful product liability claim. Accordingly, any product
liability claim brought against us could, and probably would, have a material
adverse effect on or business, financial condition and results of operations.
Risks Inherent in International Operations. We intend to market our
products and services internationally and plan to seek opportunities overseas,
either independently or through joint ventures or other collaborative
arrangements with strategic partners. To the extent that we operate our business
overseas and/or sell our products in foreign markets, we will be subject to all
of the risks inherent in international operations and transactions, including
the burdens of complying with a wide variety of foreign laws and regulations,
exposure to fluctuations in currency exchange rates and tariff regulations,
potential economic instability and export license requirements. In addition,
international environmental regulations and enforcement of such regulations vary
by country and are subject to changes which may adversely affect our operations.
Competition. We will directly and indirectly compete with other
businesses, including businesses in the solid waste collection and disposal
business. In many cases, these potential competitors are larger and more firmly
established than we are. In addition, many of such potential competitors have
greater marketing and development budgets and greater capital resources than we
have. Accordingly, we cannot assure that we will be able to achieve and maintain
a competitive position in the businesses in which we will compete.
Dependence on Patents and Proprietary Technology. Our success will
depend, in part, on our ability to maintain protection for our products and
processes under United States and foreign patent laws, to preserve our trade
secrets and to operate without infringing the proprietary rights of third
parties. Currently, a portion of the technology for our waste management system
is licensed from third parties and we have not obtained indemnification from the
licensors of such technology. Accordingly, if the technology licensed by such
licensors to us infringes the rights of third parties, we could be held liable
for damages to such third party and could not seek reimbursement from the
licensor. We do not maintain any insurance to protect against such claim and, if
such a claim were made against us it could have a material adverse effect on our
business, financial condition and results of operations. We do not possess any
patents but do have applications pending. We cannot assure that any issued
patents will afford adequate protection to us or not be challenged, invalidated,
infringed or circumvented or that any rights thereunder will afford competitive
advantages to us. Furthermore, we cannot assure that others have not
independently developed, or will not independently develop, similar products and
technologies or otherwise duplicate any of our products and technologies.
We cannot assure that the validity of any patent issued to us or any
licensor of technology to us would be upheld if challenged by others in
litigation or that our activities would not infringe patents owned by others. We
could incur substantial costs in defending ourselves in suits brought against
us, or in suits in which we seek to enforce our patent and/or license rights
against others. Should our products or technologies be found to infringe patents
issued to third parties, we would be required to cease the manufacture, use and
sale of our products and we could be required to pay substantial damages. In
addition, we may be required to obtain licenses to patents or other proprietary
rights of third parties in connection with the development and use of our
products and technologies. We cannot assure that any such licenses required
would be made available on terms acceptable to us, or at all.
We also rely on trade secrets and proprietary know-how, which we seek
to protect, in part, by confidentiality agreements with our employees,
consultants, advisors and others. We cannot assure that such parties will
maintain the confidentiality of such trade secrets or proprietary information,
or that our trade secrets or proprietary information will not otherwise become
known or be independently developed by competitors in a manner that would have a
material adverse effect on our business, financial condition and results of
operations.
Dependence on Environmental Regulation. Federal, state and local
environmental legislation and regulations mandate stringent waste management and
operations practices, which require substantial capital expenditures and often
impose strict liabilities for non-compliance. Environmental laws and regulations
are, and will continue to be, a principal factor affecting demand for the
5
<PAGE>
technology and services being developed or offered by us. The level of
enforcement activities by federal, state and local environmental protection and
related agencies, and changes in regulations and waste generator compliance
activities, will also affect demand. To the extent that the burdens of complying
with such laws and regulations may be eased as a result of, among other things,
political factors, or that producers of industrialized farm waste find
alternative means to comply with applicable regulatory requirements, demand for
our products and services could be adversely affected, which could have a
material adverse effect on our business, financial condition and results of
operations. Any changes in these regulations which increase compliance standards
may require us to change or improve our operating procedures. To the extent we
conduct our business overseas, international environmental regulations will be
applicable. Such regulations vary by country and are subject to changes which
may adversely affect our operations.
Regulatory Status of Operations. Our customers and we operate in a
highly regulated environment, and our potential customers and/or our products
and services may be required to have various federal, state and/or local
government permits and authorizations, registrations and/or exemptions. Any of
these permits or approvals may be subject to denial, revocation or modification
under various circumstances. Failure to comply with the conditions of such
permits, approvals, registrations, authorizations or exemptions may adversely
affect the installation or operation of our waste management system and may
subject us to federal, state or locally-imposed penalties. Our ability to
satisfy the permitting requirements for a particular installation does not
assure that permitting requirements for other installations will be satisfied.
In addition, if new environmental legislation is enacted or current regulations
are amended or are interpreted or enforced differently, our customers or we may
be required to obtain additional operating permits, registrations,
certifications, exemptions or approvals. We cannot assure that our customers or
we will meet all of the applicable regulatory requirements.
Potential Environmental Liability. Our business exposes us to the risk
that harmful substances may be released or escape into the environment from our
processes or equipment, resulting in potential liability for the clean-up or
remediation of the release and/or potential personal injury associated with the
release. Liability for investigation and/or clean-up and corrective action costs
exists under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), and corresponding state laws.
Additionally, we are potentially subject to regulatory liability for the
generation, transportation, treatment, storage or disposal of hazardous waste if
we do not act in accordance with the requirements of federal or state hazardous
waste regulations or facility specific regulatory determinations, authorizations
or exemptions. We are also potentially subject to regulatory liability for
releases into the air or water under the Clean Air Act of 1970, as amended, and
the Federal Water Pollution Control Act of 1972, as amended (hereinafter the
"Clean Water Act"), and analogous state laws and regulations and various other
applicable federal or state laws and regulations if we do not comply with those
requirements.
Dependence on Key Management and Personnel. We are highly dependent
upon the efforts of our senior management and, effective April 15, 1998, entered
into a four-year employment agreement with Marvin Mears, our President and Chief
Executive Officer. We do not possess any key-man life insurance on Mr. Mears but
intend to apply for a $1 million key-man life insurance policy on him. No
assurance can be given that we will be able to obtain such a policy or, if
obtainable, that it will be on terms favorable to us. We are also dependent upon
our other management personnel, as well as certain scientific advisors and
consultants. The loss of the services of one or more of these individuals could
have a material adverse effect upon us. Our future success will depend in large
part upon our ability to attract and retain additional highly skilled
scientific, managerial, manufacturing and marketing personnel. We face
competition for hiring such personnel from other companies, research and
academic institutions, government agencies and other organizations. We cannot
assure that we will continue to be successful in attracting and retaining such
personnel.
Prior Legal Actions Involving Chief Executive Officer and Principal
Stockholders. On March 12, 1993, the United States District Court for the
Central District of California permanently enjoined Mr. Marvin Mears, the
President, Chief Executive Officer, Director and a major stockholder of EPTC,
from, among other things, future violations or aiding and abetting violations of
the antifraud provisions of the Securities Act of 1933, as amended (the "1933
Act"), and the Securities Exchange Act of 1934 (the "1934 Act"), as amended.
Further, Mr. Mears was permanently restrained and enjoined from making any
untrue statement of a material fact in any registration statement, application,
report, account, record or other document filed or transmitted pursuant to the
Investment Company Act of 1940, or omitting to state therein any fact necessary
in order to prevent the statements made therein, in light of the circumstances
under which they were made, from being materially misleading in violation of the
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Investment Company Act of 1940. In addition, by order dated February 27, 1996,
Mr. Mears, without admitting or denying any of the findings contained in an
order issued by the Securities and Exchange Commission, consented to the entry
of an Order Making Findings and Imposing Sanctions Pursuant to Section 9(b) of
the Investment Company Act of 1940 whereby Mr. Mears agreed to be barred from
association with any investment advisor or investment company.
In February 1993, the United States District Court for the Central
District of California permanently enjoined Mr. Morris Lerner, a major
stockholder of EPTC and formerly an officer and director of the Company, from,
among other things, future violations or aiding and abetting violations of the
antifraud provisions of the 1933 Act and the 1934 Act. In addition, Mr. Lerner
was permanently restrained and enjoined from making any untrue statement of a
material fact in any registration statement, application, report, account,
record or other document filed or transmitted pursuant to the Investment Company
Act of 1940, or omitting to state therein any fact necessary in order to prevent
the statements made therein, in light of the circumstances under which they were
made, from being materially misleading in violation of the Investment Company
Act of 1940.
Control by Existing Management. Our executive officers and directors
currently beneficially own approximately 40% of the outstanding shares of Common
Stock. These persons, if acting in concert, will have significant voting power
with respect to the election of directors and, in general, the outcome of any
other matter submitted to a vote of stockholders.
Potential Adverse Effects of Preferred Stock. Our Certificate of
Incorporation authorizes the issuance of shares of "blank check" preferred
stock, which will have such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without stockholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or other rights which could
adversely affect the voting power or other rights of the holders of the Common
Stock. The preferred stock could be utilized to discourage, delay or prevent a
change in control of us. Although the we have no present intention to issue any
shares of preferred stock other than the shares of Series A Preferred Stock
currently outstanding, we cannot assure that we will not do so in the future.
No Dividends. We have not paid any cash dividends on our Common Stock
and do not expect to declare or pay any cash or other dividends in the
foreseeable future. We intend to retain earnings, if any, to provide funds for
the expansion of our business. So long as any shares of Series A Convertible
Preferred Stock are outstanding, we may not, without first obtaining the
approval of the holders of 67% of the then outstanding shares of Series A
Convertible Preferred Stock, redeem, declare or pay any dividend or distribution
with respect to shares of Common Stock.
Outstanding Warrants and Options. Exercise of Registration Rights. We
have outstanding (i) warrants to purchase an aggregate of 25,000 shares of
Common Stock at an exercise price of $2.00 per share; (ii) warrants sold in a
private placement (the "Private Placement Warrants") to purchase 25,000 shares
of Common Stock at an exercise price of $3.875 per share; and (iii) options to
purchase an aggregate of 330,000 shares of Common Stock granted under our 1996
Stock Option Plan at an exercise price of $.1875 per share. We have reserved an
aggregate of 400,000 shares of Common Stock for issuance our stock option plan.
Holders of such warrants and options are likely to exercise them when, in all
likelihood, we could obtain additional capital on terms more favorable than
those provided by such warrants and options. Further, while these warrants and
options are outstanding, our ability to obtain additional financing on favorable
terms may be adversely affected.
Risks Associated with Management of Potential Growth. Our growth is
expected to place a significant strain on our managerial, operation, financial
and information systems resources. To accommodate our current size and manage
growth, we must continue to implement and improve our operational, financial and
information systems, and expand, train and manage our employee base.
Additionally, expansion of our information and network systems is required to
accommodate our growth. We cannot assure that we will be able to manage the
expansion of our operations effectively, or that our facilities, systems,
procedures or controls will be adequate to support our operations. Our inability
to manage our future growth effectively would have a material adverse effect on
our business, financial condition and results of operations. This problem may be
exacerbated to the extent we continues to acquire additional technologies, as
each such technology must then be integrated into our operations and systems.
7
<PAGE>
Delaware Anti-Takeover Statute; Issuance of Preferred Stock; Barriers
to Takeover. We are a Delaware corporation and thus, are subject to the
prohibitions imposed by Section 203 of the Delaware General Corporation Law,
which is generally viewed as an anti-takeover statute. In general, this statute
prohibits us from entering into certain business combinations without the
approval of our Board of Directors and, as such, could prohibit or delay mergers
or other attempted takeovers or changes in control with respect to the Company.
Such provisions may discourage attempts to acquire us. In addition, our
authorized capital consists of 40,000,000 shares of capital stock of which
20,000,000 shares are designated as Common Stock and 20,000,000 shares are
designated as preferred stock. The Board of Directors, without any action by our
stockholders, is authorized to designate and issue shares in such classes or
series (including classes or series of preferred stock) as it deems appropriate
and to establish the rights, preferences and privileges of such shares,
including dividends, liquidation and voting rights. The rights of holders of
preferred stock and other classes of Common Stock that may be issued may be
superior to the rights granted to the holders of the existing classes of Common
Stock. Further, the ability of the Board of Directors to designate and issue
such undesignated shares could impede or deter an unsolicited tender offer or
takeover proposal regarding us and the issuance of additional shares having
preferential rights could adversely affect the voting power and other rights of
holders of Common Stock. Issuance of preferred stock, which may be accomplished
through a public offering or a private placement, may dilute the voting power of
holders of Common Stock (such as by issuing preferred stock with super voting
rights) and may render more difficult the removal of current management, even if
such removal may be in the stockholders' best interests. Any such issuance of
preferred stock could prevent the holders of Common Stock from realizing a
premium on their shares.
Limited Market for the Common Stock - Delisting from OTC Bulletin
Board. Our Common Stock is traded on the OTC Bulletin Board, but is not listed
on any stock exchange or on NASDAQ. Trading volume in the Common Stock has
fluctuated considerably in the recent past. We filed for the registration of the
entire class of our Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act" ), in order to make us a "reporting
company." Accordingly, we are required to file all of the reports, proxy
statements and other information required to be filed with the Securities and
Exchange Commission (the "Commission") under the Exchange Act. In 1999 and 2000,
we were late in filing our periodic reports with the Securities and Exchange
Commission, primarily because of a lack of funding to pay the costs of the
reports and related audit of our financial statements. As a result, our stock
was temporarily delisted from trading on the OTC Bulletin Board and thereafter
traded sporadically only on the "pink sheets." In March 2000, EPTC filed the
necessary public reports and audited financial statements, making it eligible
again for trading on the OTC Bulletin Board. There is no assurance, however,
that EPTC, will remain current with its public reports and audited financial
statements, especially in light of its severe lack of capital. If we do not
continue to file our public reports with the Securities and Exchange Commission
on a timely basis, our Common Stock will again be delisted from the OTC Bulletin
Board, potentially reducing liquidity and causing a decline of our stock price.
Possible Volatility of Stock Prices; Penny Stock Rules. The
over-the-counter markets for securities such as our Common Stock historically
have experienced extreme price and volume fluctuations during certain periods.
These broad market fluctuations and other factors, such as new product
developments and general trends in the investment markets, as well as general
economic conditions and quarterly variations in our results of operations, may
adversely affect the market price of our Common Stock. Moreover, unless and
until it is approved for quotation on NASDAQ, our Common Stock could become
subject to rules adopted by the Commission regulating broker-dealer practices in
connection with transactions in "penny stocks." Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on NASDAQ,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or the NASDAQ system). Unless an
exemption from the definition of a "penny stock" were available, any broker
engaging in a transaction in our Common Stock would be required to provide any
customer with a risk disclosure document, disclosure of market conditions, if
any, disclosure of the compensation of the broker-dealer and its salesperson in
the transaction, and monthly accounts showing the market values of our Common
Stock held in the customer's account. The bid and offer quotation and
compensation information must be provided prior to effecting the transaction and
must be contained on the customer's confirmation. It may be anticipated that a
number of brokers may be unwilling to engage in transactions in our Common Stock
because of the need to comply with the "penny stock" rules, thereby making it
more difficult for purchasers of Common Stock offered hereby to dispose of their
shares. Our Common Stock is covered by a Securities and Exchange Commission rule
that imposes additional sales practice requirements on broker-dealers who sell
such securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
8
<PAGE>
$200,000 or $300,000 jointly with their spouse). For transactions covered by the
rule, the broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction prior
to the sale. Consequently, the rule may affect the ability of broker-dealers to
sell our securities and also may affect the ability of purchasers in this
offering to sell their shares in the secondary market.
Risks of Decline in Stock Price. The market trading price of our stock
could decline or become volatile because of the eligibility of the Common Stock
covered by this Prospectus to be sold in the open market. This Prospectus causes
the supply of free trading shares to increase substantially. We cannot assure
that the price of our stock on the OTC Bulletin Board or "pink sheets" will not
decline because of the availability of the Common Stock covered by this
Prospectus for potential sale, and for other reasons. EPTC may register more
shares of its stock in the future, potentially increasing the supply of free
trading shares and possibly exerting downward pressure on our stock price.
Risk of Dilution Through Additional Issuances of Shares. We may issue
more shares of our common or preferred stock in the future in order to raise
capital and make acquisitions of other businesses. Outstanding warrants and
stock options may be exercised, causing more dilution in the outstanding shares
of our capital stock. We are generally permitted to issue additional shares of
our capital stock with the approval of our Board of Directors and without the
consent of EPTC's shareholders.
Risk of Failure of Settlement Agreements. The SR Agreement with John
Bird and his sons (collectively, the "Plaintiffs"), a copy of which is attached
to this Prospectus as Exhibit A, states in part, in paragraph 3 that: "On or
before May 5, 2000, EPTC shall deliver to Plaintiffs certificates representing a
total of 140,000 shares of free trading, non-restricted stock in EPTC..." The
Agreement and Mutual Release with Lifeline Enterprises LLC, ("Lifeline"), a copy
of which is attached to this Prospectus as Exhibit B, states in paragraph 3,
that: "Closing shall be at a time and place mutually agreeable to the parties,
but shall occur on or before May 5, 2000." After utilizing its best efforts,
EPTC filed the registration statement on May 12, 2000. Plaintiffs' legal counsel
and Lifeline have informed EPTC that the Plaintiffs and Lifeline will not abide
by the agreements because they deem EPTC to be in breach of the agreements. The
Plaintiffs' legal counsel has indicated that Plaintiffs will proceed with the
litigation against EPTC. EPTC will not issue the shares registered for the
Plaintiffs or Lifeline, absent agreements. Absent agreements, the shares
allocated herein for Plaintiffs and Lifeline will remain unissued, and EPTC will
proceed with the litigation with the Plaintiffs. There is no assurance that
agreements with Plaintiffs or Lifeline will be honored by the Plaintiffs or
Lifeline, or that litigation with the Birds will not proceed, causing EPTC to
incur additional fees and costs.
USE OF PROCEEDS
EPTC will not receive any proceeds from the sale of the shares offered
by the Selling Securityholders.
SELLING SECURITYHOLDERS
The shares of Common Stock being offered by the Selling Securityholders
have been issued to them in consideration for consulting services rendered and
legal services performed for EPTC, as well as certain other covenants made for
the benefit of EPTC. The following table sets forth certain information with
respect to the shares of Common Stock owned by each Selling Securityholder.
<TABLE>
<CAPTION>
Name of Stock Position No. of Shares of Common
Holder With Company Stock Owned
------ ------------ -----------
<S> <C> <C>
John Bird Former Affiliate 70,000(1)
Derek Bird Former Affiliate 42,000(2)
Life Line Enterprises, LLC Former Affiliate 60,000(4)
Mark J. Richardson Special Legal Counsel 20,000(5)
David I. Lefkowitz Legal Counsel 272,728(6)
</TABLE>
9
<PAGE>
- --------------------------------------------
(1) Granted in consideration for the settlement of his claim against EPTC,
a general release of all claims against EPTC, and prior services
purportedly performed by Mr. John Bird for EPTC.
(2) Granted in consideration for the settlement of his claim against EPTC,
a general release of all claims against EPTC, and prior services
purportedly performed by Mr. John Bird for EPTC.
(3) Granted in consideration for the settlement of his claim against EPTC,
a general release of all claims against EPTC, and prior services
purportedly performed by Mr. John Bird for EPTC.
(4) Granted in consideration for prior consulting services for and the
assignment of a patent to EPTC.
(5) Granted in consideration for legal services performed for EPTC.
(6) 72,728 shares have been granted to Mr. David I. Lefkowitz in
consideration for prior legal services performed for EPTC. An
additional 200,000 shares have been reserved for issuance to Mr.
Lefkowitz for future legal services to be performed, to be issued as
the services are performed by Mr. Lefkowitz for EPTC.
PLAN OF DISTRIBUTION
Sales of the shares of Common Stock by the Selling Securityholders may
be effected from time to time in transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions,
through the writing of options on the Common Stock or a combination of such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the shares of Common
Stock directly to purchasers or through broker-dealers that may act as agents or
principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders and/or
the purchasers of shares of Common Stock for whom such broker-dealers may act as
agents or to whom they sell as principals, or both. Such compensation as to a
particular broker-dealer might be in excess of customary commissions.
The Selling Securityholders and any broker-dealers that act in
connection with the sale of the shares of Common Stock as principals may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Any commissions received by them and any profit on the resale of
the shares of Common Stock earned by them as principals might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Securityholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares of Common Stock
against certain liabilities, including liabilities under the Securities Act.
EPTC will not receive any proceeds from the sale of the shares of Common Stock.
The shares of Common Stock are offered by the Selling Securityholders
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
We have agreed to pay all expenses incurred in connection with the registration
of the shares offered by the Selling Securityholders except that the Selling
Securityholders are exclusively liable to pay all commissions, discounts and
other payments to broker-dealers incurred in connection with their sale of
Common Stock.
LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS
Under the Delaware General Corporation Law and EPTC's Amended and
Restated Articles of Incorporation, our directors will have no personal
liability to EPTC or its shareholders for monetary damages incurred as the
result of the breach or alleged breach by a director of his "duty of care." This
10
<PAGE>
provision does not apply to the directors' (i) acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law, (ii) acts or
omissions that a director believes to be contrary to the best interests of the
corporation or its shareholders or that involve the absence of good faith on the
part of the director, (iii) approval of any transaction from which a director
derives an improper personal benefit, (iv) acts or omissions that show a
reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the corporation or its shareholders, (v) acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders, or
(vi) approval of an unlawful dividend, distribution, stock repurchase or
redemption. This provision would generally absolve directors of personal
liability for negligence in the performance of duties, including gross
negligence.
The effect of this provision in EPTC's Amended and Restated Articles of
Incorporation is to eliminate the rights of EPTC and its shareholders (through
shareholder's derivative suits on behalf of EPTC) to recover monetary damages
against a director for breach of his fiduciary duty of care as a director
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i) through (vi) above. This
provision does not limit nor eliminate the rights of EPTC or any shareholder to
seek non-monetary relief such as an injunction or rescission in the event of a
breach of a director's duty of care. In addition, EPTC's Restated Articles of
Incorporation provide that if Delaware law is amended to authorize the future
elimination or limitation of the liability of a director, then the liability of
the directors will be eliminated or limited to the fullest extent permitted by
the law, as amended. The Delaware General Corporation Law grants corporations
the right to indemnify their directors, officers, employees and agents in
accordance with applicable law. EPTC's Bylaws provide for indemnification of
such persons to the full extent allowable under applicable law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling EPTC pursuant
to the foregoing provisions, EPTC has been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed
upon by Richardson & Associates, 1299 Ocean Avenue, Suite 900, Santa Monica,
California 90401. Mark J. Richardson, Esq. is a partner of Richardson &
Associates and is being issued 20,000 shares of EPTC's Common Stock in
consideration for certain legal services performed by him for EPTC, including
assistance in the preparation of this Prospectus. These shares are covered by
this Prospectus.
EXPERTS
The financial statements and the related supplemental schedules
incorporated in this Prospectus by reference from EPTC's Annual Report on Form
10-KSB for the year ended September 30, 1999 have been audited by Singer, Lewak,
Greenbaum, and Goldstein, LLC, independent certified public accountants, as set
forth in their report appearing with the financial statements, and have been so
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
11
<PAGE>
No dealer, salesman or any other person
has been authorized by EPTC to give any
information or to make any
representations other than those
contained in this Prospectus in
connection with the offering made
hereby, and if given or made, such
information or representations may not
be relied upon. The Prospectus does not
constitute an offer to sell or the
solicitation of an offer to buy any
securities other than those specifically
offered hereby or an offer to sell, or a
solicitation of an offer to buy, to any
person in any jurisdiction in which such
offer or sale would be unlawful. Neither
the delivery of this Prospectus nor any ENVIRONMENTAL PRODUCTS &
sale made hereunder shall under any TECHNOLOGIES CORPORATION
circumstances create any implication
that there has been no change in the
affairs of EPTC since the dates as of [LOGO]
which information is furnished or since ----------
the date of this Prospectus. PROSPECTUS
----------
- - - - - - - - - - - - - - - - - - - May 12 2000
TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION ................2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE ................2
RISK FACTORS...........................3
USE OF PROCEEDS .......................9
SELLING SECURITYHOLDERS ...............9
PLAN OF DISTRIBUTION .................11
LIMITATION ON LIABILITY AND
INDEMNIFICATION OF DIRECTORS .........11
LEGAL MATTERS ........................11
EXPERTS ..............................11
SETTLEMENT, CONSULTING, AND
MUTUAL GENERAL RELEASE AGREEMENT.......A
CONSULTING AGREEMENT AND
MUTUAL RELEASE.........................B
12
<PAGE>
EXHIBIT A
SETTLEMENT AND MUTUAL
GENERAL RELEASE AGREEMENT
1
<PAGE>
SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE
1 Parties.
The parties to this Settlement Agreement and Mutual General Release
("Agreement") are:
a. "Plaintiffs." John Bird, David Bird and Derek Bird.
b. "EPTC." Environmental Products & Technologies Corporation, a California
corporation.
c. "Mears." Marvin Mears.
d. "Lerner." Morris Lerner
e. "Defendants." EPTC, Mears and Lerner.
2. Recitals.
This Agreement is entered into with respect to the following facts:
a. On or about March 19, 1999, Plaintiffs filed a lawsuit against
Defendants entitled John Bird, David Bird and Derek Bird v.
Environmental Products & Technologies Corporation, et al.. Los Angeles
Superior Court Case Number BC207095 (the "Action").
b. Defendants Mears and Lerner were dismissed on demurrer, and EPTC
eventually answered Plaintiffs' Second Amended Complaint, denying the
material allegations thereof and asserting various defenses thereto.
c. The parties have now agreed to resolve and settle their differences and
disputes, and each having determined that it is to their individual
advantage to do so, now agree to settle and compromise all disputes and
claims between them. Accordingly, without the admission of any
liability, the parties agree as follows:
3. Stock Delivery.
On or before May 5, 2000, EPTC shall deliver to Plaintiffs'
certificates representing a total of 140,000 shares of free trading,
non-restricted stock in EPTC, registered as follows:
John Bird 70,000 shares
Derek Bird 42,000 shares
David Bird 28,000 shares
4. Release by Defendants.
Effective upon the execution hereof, EPTC, Mears and Lerner, for good
and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, for themselves, their heirs, successors and assigns, do
hereby release and forever discharge Plaintiffs and their employees,
agents, attorneys, successors, assigns, heirs, executors and
administrators, and each of them (collectively "the Bird Releasees"), from
any and all claims, demands, causes of action, and liabilities of every
kind and nature whatsoever, known and unknown, suspected and unsuspected,
which Plaintiffs ever had, now have, and hereafter can, shall or may have,
from the beginning of time to the date hereof, including but not limited to
any claims, demands, causes of action or liabilities arising from (a) any
2
<PAGE>
services performed by Plaintiffs for EPTC, Mears or Lerner, and (b) any
services performed by Plaintiffs for any other person or entity in the
waste management, composting or recycling business, including any present
or future competitor of EPTC.
5. Release by Plaintiffs.
Effective only upon the completed delivery of 100% of the stock
provided for in paragraph 3 above, Plaintiffs, for themselves, their heirs,
successors and assigns, will release and forever discharge Defendants,
their officers, directors, employees, agents, attorneys, successors,
assigns, heirs, executors and administrators, and each of them
(collectively, "the Defendant Releasees") from any and all claims, demands,
causes of action and liabilities of any kind and nature whatsoever, known
and unknown, suspected and unsuspected, which Plaintiffs ever had, then
have and thereafter can, shall or may have from the beginning of time to
the effective date hereof including, but not limited to, any claims,
demands, causes of action or liabilities that were asserted or could have
been asserted in the Action.
6. Power to Release.
The parties each represent and warrant to each other that they are the
sole owners of the claims, demands, causes of action and liabilities which
they are releasing, and that they have full power to give the releases
provided for herein. The parties further represent and warrant to each
other that they have not assigned or transferred any of the claims,
demands, causes of action or liabilities released herein and the parties
each agree to indemnify and hold the other harmless from and against any
claims, demands, causes of action and liabilities, including attorneys'
fees incurred, arising out of the assertion by any third party of any
claims released herein.
7. Waiver of Unknown Claims.
The parties each expressly waive the rights and benefits of section
1542 of the California Civil Code, which provides:
"Section 1542. General Release - Claims Extinguished. A general release
does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."
8. Representation by Counsel.
Plaintiffs have been represented in this matter by Dennis A. Kendig of
Kendig & Ross, and Defendants have been represented in this matter by David
I. Lefkowitz of the Law Offices of David I. Lefkowitz. The parties have
each entered into this Agreement and have given the releases provided for
herein upon the advice of said counsel. The parties each represent and
warrant to each other that they have made such investigation of their
possible rights and claims that they deem appropriate, and they each agree
that they shall not be entitled to set aside the releases provided for
herein even if they hereafter learn that their understanding of the facts
or law was incorrect or for any other reason. The parties affirm that this
Agreement is intended to be final and binding between them, regardless of
any claim of misrepresentation, promise made without intention to perform,
concealment of fact, mistake of fact or law, or any other circumstance
whatsoever.
9. Costs and Attorneys Fees.
Each party shall bear his or its own attorney's fees and costs incurred
in the Action.
10. Integration.
This Agreement contains a single integrated contract expressing the
entire agreement of the parties. There are no other agreements, written or
3
<PAGE>
oral, express or implied, prior or collateral, between the parties, except
the agreement set forth herein. No representative of any party hereto has
or had any authority to make any representations or promises not contained
in this Agreement, and each of the parties acknowledge they have not
executed this Agreement in reliance upon any such representation or
promise. This Agreement cannot be modified or changed except by a written
instrument signed by each of the parties.
11. Governing Law; Jurisdiction and Venue.
This Agreement shall be governed by California law. The parties each
submit to the personal jurisdiction of the Los Angeles County Superior
Court for the resolution of any claims arising hereunder.
12. Captions and Interpretation.
Paragraphs, titles, and captions contained herein are inserted for
convenience and reference, and are not intended to define, limit or
describe the scope of the Agreement or any provision thereof. No provision
of the Agreement is to be interpreted for or against any party on the basis
that any particular party or his attorney drafted such provision.
13. Attorneys Fees.
The prevailing party in any dispute arising hereunder shall be entitled
to recover his or its reasonable attorney's fees and costs incurred in
enforcing this Agreement or in pursing claims for any breach thereof.
IN WITNESS WHEREOF, the undersigned hereby execute this Settlement
Agreement and Mutual General Release as of April 14, 2000.
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES
CORPORATION, a Delaware corporation
By: /s/ Marvin Mears
--------------------
Marvin Mears, President
/s/ Morris Lerner
-----------------
Morris Lerner
/s/ John Bird
-------------
John Bird
/s/ Derek Bird
--------------
Derek Bird
/s/ David Bird
--------------
David Bird
4
<PAGE>
EXHIBIT B
CONSULTING AGREEMENT
AND MUTUAL RELEASE
5
<PAGE>
AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT AND MUTUAL RELEASE (hereinafter "Agreement") dated April
14, 2000 between Lifeline Enterprises, L L C, a Utah limited liability company,
having an office at 944 East 200 North, Springville, Utah 84663 (hereinafter
"Lifeline") and Environmental Products & Technologies Corporation, a Delaware
corporation having an office at 5380 North Sterling Center Drive, Westlake
Village, California 9163 1 (hereinafter "EPTC")
WHEREAS, Lifeline is the registered owner of U.S. Patent No. 5,981,270
for Bio- Catalytic Oxidation Reactor and the corresponding pending P.C.T. patent
application; and
WHEREAS, Lifeline owns EPTC stock certificates Nos. 0611 & 0612 for
50,000 shares of EPTC common stock which have been held for over two years; and
WHEREAS, EPTC desires to acquire U.S. Patent No. 5,981,270 and the
corresponding P.C.T. application and is willing to remove the restrictions from
the EPTC stock certificates 0611 & 0612.
WHEREAS, EPTC and Lifeline are parties to two Letters of Understanding,
one dated Nov 5, 1997 and the second dated May 18, 1 998, ( the "Letters of
Understanding"), and
WHEREAS, Lifeline and EPTC and their respective principals, agents and
employees desire to amicably terminate any and all contracts and business
relationship between them and in accordance therewith to enter into a mutual
release of all claims and causes of action which exist or may in the future
arise out of said contracts and/or relationship heretofore existing between
these parties.
NOW, THEREFORE, in consideration of the mutual promises and obligations
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by this Agreement, the parties
hereto agree as follows.
1. Patent Rights. Lifeline hereby agrees to deliver to EPTC a formal
assignment of all right, title and interest in and to U S Patent
No. 5,981,270 for Bio-Catalytic Oxidation Reactor, together with
an assignment of the corresponding P.C.T. patent application.
2. Restricted Stock. EPTC hereby agrees to deliver to Lifeline an
opinion by EPTC legal counsel sufficient to effectuate removal of
all restrictions from EPTC certificates 0611 & 0612.
3. Free-trading Stock. EPTC hereby agrees to deliver to Lifeline
60,000 shares of unrestricted, tree-trading stock of EPTC.
4. Closing and Delivery. All assignments, opinions, certificates
and/or documents called for by this Agreement shall be delivered
to the respective parties at the time of execution of this
Agreement. Closing shall be at a time and place mutually agreeable
to the parties, but shall occur on or before May 05, 2000.
5. Release by EPTC. Effective upon the execution hereof EPTC, for
good and valuab1e consideration, the adequacy and receipt of which
are hereby acknowledged, for itself, its successors and assigns,
do hereby release and forever discharge Lifeline and its members
(Gary D. Roberts, Linda L. Roberts, Verlin J. Roberts and Robert
B. Crouch ), employees, agents, attorneys, successors, assigns,
heirs, executors and administrators, and each of them (
collectively "the Lifeline Re1easees"), from any and all claims,
6
<PAGE>
demands, causes of action, and liabilities of every kind and
nature whatsoever, known and unknown, suspected and unsuspected,
which EPTC ever had, now has, and hereafter can, shall, or may
have, from the beginning of time to the date hereof, including but
not limited to any claims, demands, causes of action or
liabilities arising from (a) Life1ine's obligations under the
Letters of Understanding, and(b) any services performed by the
Lifeline Releasees for any other person or entity in the waste
management, composting or recycling business, including any
present or future competitor of EPTC.
6. Release by Lifeline. Effective only upon the completed delivery of
100% of the stock provided for in paragraph 3 above, Lifeline, for
itself, successors and assigns, will release and forever discharge
EPTC and its officers, directors, employees, agents, attorneys,
successors, assigns, heirs, executors and administrators, and each
of them (collectively, "the EPTC Releasees") from any and all
claims, demands, causes of action and liabilities of any kind and
nature whatsoever, known and unknown, suspected and unsuspected,
which Lifeline ever had, then has and thereafter can, shall or may
have from the beginning of time to the effective date hereof
inc1uding, but not limited to, any claims, demands, causes of
action or liabilities arising from EPTC's obligations under the
Letters of Understanding.
7. Power to Release. The parties each represent and warrant to each
other that they are the sole owners of the claims, demands, causes
of action and liabilities which they are releasing, and that they
have full power to give the releases provided for herein The
parties further represent and warrant to each other that they have
not assigned or transferred any of the claims, demands, causes of
action or liabilities released herein and the parties each agree
to indemnify and hold harmless from and against any claims,
demands, causes of action and liabilities, including attorneys'
fees incurred, arising out of the assertion by any third party of
any claims released herein.
8. Waiver of Unknown Claims. The parties each expressly waive the
provisions, rights and benefits of section 1542 of the California
Civil Code, which provides:
"Section 1542 General Release-Claims Extinguished. A general
release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
9. Representation by Counsel. Lifeline has been represented in this
matter by John L. Runft of the Law Offices of John L Runft, and
EPTC have been represented in this matter by David I. Lefkowitz of
the Law Offices of David I Lefkowitz. The parties have each
entered into this Agreement and have given the releases provided
for herein upon the advice of counsel. The parties each represent
and warrant to each other that they have made such investigation
of their possible rights and claims that they deem appropriate,
and they each agree that they shall not be entitled to set aside
the releases provided herein even if they hereafter learn that
their understanding of the facts or law was incorrect or for any
other reason. The parties affirm that this Agreement is intended
to be final and binding between them, regardless of any claim or
misrepresentation, promise made without intention to perform,
concealment of fact, mistake of fact or law, or any other
circumstance whatsoever.
10. Notice. Any notices required or permitted to be given pursuant to
this Agreement shall be given by prepaid, certified mail,
addressed to the other parties indicated below or to any change of
address given one party to the other pursuant to written notice.
Lifeline:Lifeline Enterprises, L.L.C.
944 East 200 North
Springville, Utah 84663
7
<PAGE>
EPTC: Environmental Products & Technologies Corporation
5380 North Sterling Center Drive
Westlake Village, California 91361
11. General Provisions.
A. Entire Agreement. This Agreement constitutes and is the entire
agreement of the parties and supersedes all other prior
understandings and/or agreements between the parties regarding
the matters herein contained, whether verbal or written and fully
supersedes all prior negotiations, agreements, and understandings
of the parties including, but not limited to the Letters of
Understanding No representations or warranties shall be deemed to
have been made by either party in connection with this
transaction unless expressly herein set forth.
B. Assignment. Neither party shall be entitled to assign its
interest without the prior written approval of the other party.
C. Execution of Other Documents. Each of the parties agrees to
execute any other documents reasonably required to fully perform
the intentions of this Agreement.
D. Binding Effect. This agreement shall inure to and be binding upon
the parties hereto, their agents, employees, heirs, personal
representatives, successors and assigns.
E. No Waiver of Future Breach. The failure of one party to insist
upon strict performance or observance of this Agreement shall not
be a waiver of any future breach or of any terms or conditions of
this Agreement.
F. Attorney's Fees. In the event of any litigation arising out of
this Agreement, between any of the parties hereto, their heirs,
personal representatives, agents, successors or assigns, the
prevailing party shall be entitled to recover costs and
attorney's fees.
G. Time of Essence. The parties agree that time is of the essence in
regard to this Agreement.
H. Governing Law. This Agreement shall be governed and interpreted
by the laws of the State of California.
I. Execution of Multiple Originals. Two original counterparts of
this Agreement shall be executed by these parties.
J. Severability. In the event any provision of this Agreement
conflicts with the applicable law, such conflicts shall not
affect the provisions of this Agreement which can be given effect
without the conflicting provision.
8
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands the day
and year first above written.
ENVIRONMENTAL PRODUCTS &
TECHNOLOGIES CORPORATION,
a Delaware corporation
By:/s/ Marvin Mears
-------------------
Marvin Mears, President
LIFELINE ENTERPRISES, LLC,
a Utah limited liability company
/s/ Robert Croch
----------------
Robert Crouch, Manager
