U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
Commission file no. 0-26609
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
f/k/a
GINSITE MATERIALS, INC.
--------------------------------------------
(Name of small business issuer in its charter)
Florida 65-0774999
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2870 Speer Boulevard, Suite 205, Denver, CO 80211
- - --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (303) 455-3100
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on
which registered
None
- --------------------------- -------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
-----------------------------------
(Title of class)
Copy of Communications to:
Donald F. Mintmire & Peter G. Futro
Mintmire & Associates Futro & Trauernicht, LLC
265 Sunrise Avenue Alamo Plaza
Suite 204 1401 Seventeenth Street, 11th Floor
Palm Beach, FL 33480 Denver, Colorado 80202
(561) 832-5696 (303) 295-3360
<PAGE>
Indicate by Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
As of November 22, 1999, there are 8,866,126 shares of voting stock of
the registrant issued and outstanding. There are a total of 59 active
shareholders.
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statements of Changes in Stockholders' Equity F-4
Consolidated Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-6
<PAGE>
<TABLE>
<CAPTION>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Consolidated Balance Sheets
September 30, 1999 December 31, 1998
------------------ -----------------
(unaudited)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 4,596 $ 360
Accounts receivable
Trade 0 1,323
Related party 0 18,696
Inventories 13,566 23,379
Advance to related party 5,000 0
Note receivable-related party
(net of allowance of $105,750 and $0, respectively) 109,788 0
------------------ -----------------
Total current assets 132,950 43,758
------------------ -----------------
PROPERTY AND EQUIPMENT
Equipment 124,606 128,624
Leasehold improvements 56,550 56,550
Less: Accumulated depreciation (38,164) (19,021)
------------------ ------------------
Total property and equipment 142,992 166,153
------------------ ------------------
OTHER ASSETS
Deposits 14,473 13,448
Intangible asset-patent pending 183,134 40,781
------------------- -------------------
Total other assets 197,607 54,229
------------------- -------------------
Total Assets $ 473,549 $ 264,140
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 110,062 $ 68,352
Accounts payable-related party 4,350 4,350
Salaries payable 0 4,816
Payroll taxes payable 92,574 14,834
Note payable-related party 267,676 47,007
------------------- ------------------
Total current liabilities 474,662 139,359
------------------- ------------------
LONG-TERM LIABILITIES
Notes payable 670,887 0
------------------- ------------------
Total long-term liabilities 670,887 0
------------------- ------------------
Total Liabilities 1,145,549 139,359
------------------- ------------------
STOCKHOLDERS' EQUITY
Preferred stock, no par value,
authorized 10,000,000; 0 issued and outstanding 0 0
Common stock, $0.001 par value,
authorized 50,000,000 and 100,000,000 shares,
respectively; with 10,977,636 and 13,783,662 issued and
outstanding, respectively 10,978 13,784
Additional paid-in capital 7,062,448 3,867,255
Deficit accumulated during the development stage (7,745,426) (3,756,258)
------------------- ------------------
Total stockholders' equity (672,000) 124,781
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 473,549 $ 264,140
=================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
<TABLE>
<CAPTION>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Operations
(unaudited)
Cumulative
since Inception
For the NineMonths Ended through
September 30, 1999 September 30, 1998 September 30, 1999
--------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Revenues
Product sales $ 26,788 $ 14,312 $ 42,618
Distributor fees 0 0 6,980
--------------------- ----------------------- ---------------------
Total revenues 26,788 14,312 49,598
--------------------- ----------------------- ---------------------
Costs and expenses
Compensation :
Officers 1,101,890 1,962,930 2,815,253
Other 340,182 1,220,411 1,519,989
Related party 255,250 0 274,990
Consultants 1,273,891 0 1,273,891
Depreciation and amortization 26,615 18,715 56,017
General and Administrative 576,450 519,245 1,506,387
Bad debt expense 10,000 0 227,817
--------------------- ----------------------- ---------------------
Total expense 3,584,278 3,721,301 7,674,344
--------------------- ----------------------- ---------------------
Loss from operations (3,557,490) (3,706,989) (7,624,746)
Other income (expense)
Interest income 3,030 17 4,690
Interest expense (115,435) (1,354) (125,370)
--------------------- ----------------------- ---------------------
Net loss $ (3,669,895)$ (3,708,326)$ (7,745,426)
===================== ======================= =====================
Net loss per weighted average share, basic $ (0.35)$ (1.52)$ (0.77)
===================== ======================= =====================
Weighted average number of shares, basic* 10,346,692 2,440,469 10,101,989
===================== ======================= =====================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Equity
Deficit
Accumulated
Additional Bene. During the Total
Number of Common Paid-in Conv. Development Stockholders'
Shares Stock Capital Feature Stage Equity
------------ ----------- -------------- ---------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
BEGINNING BALANCE, December
31, 1997 $ 9,335,500 $ 9,336 $ 36,127 $ 0 $ (40,939) $ 4,524
First quarter - cash ($0.35/sh) 754,986 755 263,490 0 0 264,245
First quarter - services ($0.11/sh) 500,000 500 54,188 0 0 54,688
First quarter - services ($2.49/sh)* 200,000 200 498,238 0 0 498,438
First quarter - services ($2.73/sh)** 425,000 425 1,158,363 0 0 1,158,788
Second quarter - cash ($0.35/sh) 879,300 879 306,876 0 0 307,755
Second quarter - services ($2.56/sh)* 250,000 250 640,375 0 0 640,625
Third quarter - cash ($0.35/sh) 646,714 647 225,703 0 0 226,350
Third quarter - cash ($0.67/sh) 67,164 67 44,933 0 0 45,000
Third quarter - services ($2.13/sh)* 200,000 200 424,800 0 0 425,000
Fourth quarter - cash ($0.35/sh) 474,998 475 165,774 0 0 166,249
Fourth quarter - services ($0.97/sh)* 50,000 50 48,388 0 0 48,438
Net loss 0 0 0 0 (3,715,319) (3,715,319)
------------ ----------- -------------- --------- ---------------- -----------------
BALANCE, December 31, 1998 $ 13,783,662 $ 10,091 $ 3,867,255 0 $ (3,756,258) $ 124,781
------------ ----------- -------------- --------- ---------------- -----------------
Beneficial conversion feature creation 0 0 0 84,667 0 84,667
First quarter - cash/services($0.26/sh) 2,500,000 2,500 647,500 0 0 650,000
First quarter - services 301,000 301 436,340 0 0 436,641
First quarter - services ($1.58/sh)** 100,000 100 157,712 0 0 157,813
First quarter - services ($.26/sh)** 175,000 175 45,325 0 0 45,500
First quarter - services ($.41/sh)* 950,000 950 392,409 0 0 393,359
First quarter - debt conversion 427,908 428 144,572 0 0 145,000
First quarter - debt conversion 0 0 48,334 0 0 0
Second quarter - cash ($0.13/sh) 400,000 400 49,600 0 0 50,000
Second quarter - services 800,000 800 163,200 0 0 164,000
Second quarter - services ($0.25/sh)* 2,000,000 2,000 498,000 0 0 500,000
Second quarter - debt conversion 607,703 608 108,392 0 0 109,000
Second quarter - debt conversion 0 0 36,333 0 0 0
Third quarter - acquisition 32,842,909 32,843 423,565 0 0 137,135
Third quarter - reverse split (43,910,546) (43,911) 43,911 0 0 0
Net loss 0 0 0 0 (3,169,895) (3,669,895)
------------ ----------- -------------- --------- ---------------- -----------------
ENDING BALANCE,
September 30, 1999 (unaudited) $ 10,977,636 $ 10,978 $ 7,062,448 $ 0 $ (7,745,426) $ (671,999)
============ =========== ============== ========= ================ =================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows
(unaudited)
Cumlitive
since
For the Nine Months Ended Inception
September 30, September 30, September 30,
1999 1998 1999
----------------- ---------------- ----------------
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
<S> <C> <C> <C>
Net loss $ (3,669,895) $ (3,708,326) $ (7,745,426)
Adjustments to reconcile net loss to net cash used by
development activities
Amortization - beneficial conversion feature 84,667 0 84,667
Amortization - other 7,647 7,646 17,842
Depreciation 18,968 11,069 38,175
Stock issued in lieu of cash - third parties 1,995,891 54,688 2,050,578
Stock issued in lieu of cash - officers and employees 1,215,172 2,722,851 4,001,905
Bad debt 10,000 0 227,817
Changes in assets and liabilities
(Increase) decrease in accounts receivable - trade 1,323 0 0
(Increase) decrease in accounts receivable-related party 18,696 (29,247) (28,000)
(Increase) decrease in inventory 9,813 (15,185) (13,566)
(Increase) decrease in accrued interest on note receivable - related party 0 0 (1,250)
(Increase) decrease in deposits (1,025) (20,520) (14,473)
Increase (decrease) in accounts payable (29,971) 10,308 59,986
Increase (decrease) in accounts payable-related party 0 (20,000) 4,350
Increase (decrease) in salaries payable 0 332,174 4,816
Increase (decrease) in payroll taxes payable 64,949 25,109 79,783
Increase (decrease) in accrued interest on note payable - related party 0 1,354 3,949
----------------- ---------------- ----------------
Net cash used by development activities (273,765) (628,079) (1,228,847)
----------------- ---------------- ----------------
CASH FLOW FROM INVESTING ACTIVITIES:
Issuance of note receivable - related party (215,538) (66,500) (292,038)
Purchase of property and equipment 0 (150,766) (177,034)
Purchase of property and equipment - related party 0 0 (10,000)
----------------- ---------------- ----------------
(479,072)h used by investing activities (215,538) (217,266) (479,072)
----------------- ---------------- ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Loans from related parties 189,539 0 298,986
Proceeds from issuance of convertible debt 254,000 0 254,000
Proceeds from issuance of common stock, net 50,000 843,350 1,159,529
----------------- ---------------- ----------------
Net cash provided by financing activities 493,539 843,350 1,712,515
----------------- ---------------- ----------------
Net increase (decrease) in cash 4,236 (1,995) 4,596
CASH, beginning of period 360 7,791 0
----------------- ---------------- ----------------
CASH, end of period $ 4,596 $ 5,796 $ 4,596
================= ================ ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash investing and financing activities:
Acquisition of patent from shareholder $ 0 $ 0 $ 50,976
================= ================ ================
Issuance of common stock for patent $ 0 $ 0 $ 7,918
================= ================ ================
Due to shareholder for patent $ 0 $ 0 $ 43,058
================= ================ ================
Conversion of convertible debt $ 254,000 $ 0 $ 254,000
================= ================ ================
Debt issued to acquire technology $ 0 $ 150,000 $ 150,000
================= ================ ================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Information with respect to periods ended September 30, 1999 and 1998 is
unaudited)
(1) Summary of Significant Accounting Principles
TheCompany Ginsite Materials, Inc., is a Florida chartered development
stage corporation which conducts business from its headquarters in Fort
Lauderdale, Florida. The Company was incorporated on August 7, 1997.
The Company is principally involved in the manufacturing, marketing and
sales of the Ginsite formulation, a material that enhances or replaces
wood, concrete and similar construction materials. Current activities
include raising additional equity and negotiating with potential
national distributors. The Company is in the development stage and has
just begun to acquire the necessary operating assets to carry on its
proposed business. While the Company is negotiating with potential
customer distribution channels, there is no assurance that any benefit
will result from such activities. The Company will not receive
significant operating revenues until the commencement of operations,
but will nevertheless continue to incur expenses until then.
The financial statements for the nine months ended September 30, 1999
and 1998 include all adjustments which, in the opinion of management,
are necessary for fair presentation. The following summarize the more
significant accounting and reporting policies and practices of the
Company:
a) Use of estimates The financial statements have been prepared
in conformity with generally accepted accounting principles. In
preparing the financial statements, management is required to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, as of the date of the statements of
financial condition, and revenues and expenses for the period
then ended. Actual results may differ significantly from those
estimates.
b) Start-up costs Costs of start-up activities, including
organization costs, are expensed as incurred.
c) Net loss per share Basic net loss per share is computed by
dividing the net loss by the weighted average number of common
shares outstanding during the period.
d) Compensation for services rendered for stock The Company
issues shares of common stock in exchange for services rendered
and in payment of shareholder loans. The costs of the services
are valued according to generally accepted accounting principles
and have been charged to operations.
e) Inventories Inventories are valued at the lower of cost or
market. Cost is determined using the first-in, first-out (FIFO)
method for substantially all inventory.
f) Basis of presentation The consolidated financial statements
include the accounts of Envirocon Corp., its wholly owned
subsidiary. Intercompany accounts and transactions have been
eliminated in the consolidation.
g) Intangible asset - patent pending Patents are recorded at
historical cost and amortized, beginning the date the patents are
placed in service over their estimated useful lives, using the
straight-line method.
h) Property and equipment All property and equipment are recorded
at cost and depreciated over their estimated useful lives, using
the straight-line method. Upon sale or retirement, the costs and
related accumulated depreciation are eliminated from their
respective accounts, and the resulting gain or loss is included
in the results of operations. Repairs and maintenance charges
which do not increase the useful lives of the assets are charged
to operations as incurred.
F-6
<PAGE>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(2) Significant Acquisitions On August 13, 1999, the Company acquired 100%
of the issued and outstanding common shares of Environcon Corp., a
Nevada corporation headquartered in Denver, Colorado. The Company
issued 32,842,909 shares of its common stock to effect this
transaction. This acquisition has been accounted for as a pooling of
interests.
(3) Intangible Asset - Patent Pending On August 7, 1997, a majority
shareholder formally assigned to the Company a certain patent pending
with the United States Patent and Trademark Office of the Department of
Commerce. The patent was recorded at its historical cost of $50,976,
which represents the accumulated expenditures of the majority
shareholder to refine the patent process. The patent is being amortized
over a period of five years, its estimated useful life, which began in
1998, the year the patent process was placed in service. Amortization
expense for the periods ended September 30, 1999 and 1998 was $7,647
and $7,646, respectively.
(4) Property and Equipment Depreciation expense for the periods ended
September 30, 1999 and 1998 was $18,968 and $11,069, respectively.
(5) Long Term Debt In February 1999, the Company issued a 9% convertible
note due on February 1, 2001 for $254,000 cash. The note is convertible
into shares of the Company's common stock at a conversion price equal
to the lesser of 100% of the lowest of the closing bid prices for the
common stock for the five trading days prior to the date of the note,
or 75% of the lowest of the closing bid prices for the common stock for
the five trading days immediately prior to the conversion date. As of
September 30, 1999, the debt was converted into 1,035,611 shares of
common stock at prices ranging from $0.17 to $0.66 per share.
The Company recognized a beneficial conversion feature discount, in
accordance with EITF Topic D-60 amounting to $84,665. The discount was
immediately amortized as the notes were immediately convertible. The
amount of reclassification from beneficial conversion feature to
additional paid-in capital due to conversion of the related debt for
the period ended September 30, 1999 was $84,665.
In March 1999, the Company was offered debt financing in the form of
non-interest bearing loans for up to $581,000, to be loaned on an as
needed basis throughout the remainder of 1999. There is no formal
written agreement regarding the repayment of these loans.
(6) Stockholders' Equity The shareholders, in January 1999, consented to
increase the number of authorized common shares, $0.001 par value, from
17,250,000 to 50,000,000 shares and to 100,000,000 shares in September
1999. Concurrently, 10,000,000 shares of preferred stock with no
determined par value were authorized. In September 1999, the Company
completed a one for five reverse split of the issued and outstanding
common shares. The Company had 10,977,636 and 13,783,662 shares of
common stock issued and outstanding at September 30, 1999 and December
31, 1998, respectively. There were no shares of preferred stock issued
as of September 30, 1999.
During the first quarter of 1999, the Company issued a total of
1,226,000 shares of restricted common stock for services rendered at a
total value of $598,438, the current market price less any applicable
marketability discount. 1,050,000 of these shares were issued to
officers, 175,000 to employees of the Company and 1,000 to a third
party. The Company issued a total of 150,000 shares of unrestricted
common stock to third parties for services rendered at a total value of
$181,750.
Also during the first quarter of 1999, the Company issued 2,500,000
shares of unrestricted common stock for $75,000 in cash. In accordance
with generally accepted accounting principles, these shares have been
recorded at the market value on the date of obligation of $0.26 per
share. Compensation expense of $575,000 has been charged to operations.
During the second quarter of 1999, the Company issued a total of
2,800,000 shares of restricted common stock for services rendered at a
total value of $664,000, the current market price less any applicable
marketability discount. These shares were all issued to officers of the
Company. During the second quarter, 400,000 shares were issued for
$50,000 in cash.
F-7
<PAGE>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(6) Stockholders' Equity (Continued) In August 1999, the Company issued
32,842,909 shares of restricted common stock, in exchange for 100% of
the issued and outstanding common stock of Environcon Corp.
During the nine months, $254,000 of convertible debt was converted to
1,035,611 shares of unrestricted common stock. The number of shares
issued under the conversion was determined according to the terms of
the note (Note 5), with conversion prices ranging from $0.17 per share
to $0.66 per share.
(7) Operating Lease The Company leases warehouse and office space located
in the Fort Lauderdale area. Total rent expense for the period ended
September 30, 1999 and 1998 was $124,120 and $104,855, respectively.
Future minimum lease payments under the noncancellable operating lease
at December 31, 1998 are as follows:
1999 $ 133,866
2000 140,560
2001 147,588
2002 154,967
2003 162,715
Thereafter 710,593
----------
$1,450,289
==========
(8) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company had net operating loss
carry-forwards for income tax purposes of approximately $802,745, which
expire beginning December 31, 2117.
The amount recorded as deferred tax assets, cumulative as of December
31, 1998, is $157,940 which represents the amount of tax benefits of
loss carry-forwards. The Company has established a valuation allowance
for this deferred tax asset of $164,254, as the Company has no history
of profitable operations.
(9) Related parties In January 1999, the Company advanced funds in the
amount of $30,000 to Progressive Technology, Inc., a company under
common control. These funds are considered a temporary advance and are
expected to be repaid within the subsequent year. As of September 30,
1999, the unpaid amount was $30,000 and is presented in Note receivable
- related party.
As of January 1, 1998, the Company provides personnel services for and
shares certain building expenses with Progressive Technology, Inc., a
company under common control. The Company is reimbursed for the cost of
providing these items and records the reimbursements as a reduction of
operating expenses. Unpaid amount at September 30, 1999 is $215,538 and
is presented net of allowance for doubtful accounts of $105,750 in
Notes receivable - related party.
During 1997, the Company paid $10,000 to Progressive Technology, Inc.,
a company under common control, for the design, labor and material
necessary to build certain property and equipment. This purchase is
presented in property and equipment at historical cost, net of
accumulated depreciation. During the period ended December 31, 1998,
the Company was advanced funds from Y2K Medical, Inc., a company under
common control. Unpaid amounts were $4,350 at March 31, 1999 and
December 31, 1998 and are presented in Accounts payable - related
party. Y2K Medical, Inc. is currently inactive and awaiting a formal
dissolution with the State of Florida.
During 1997, a majority shareholder formally assigned a certain patent
pending (Note 3) to the Company in exchange for a note bearing interest
of 6.343% annually. The note is unsecured and is due within one year.
The shareholder has the option to permit an extension of the repayment
period for an additional year if the Company so requests. The unpaid
principal amount was $43,058 at March 31, 1999 and December 31, 1998.
Accrued interest at September 30, 1999 was $5,125.
F-8
<PAGE>
Environmental Construction Products International
f/k/a Ginsite Materials, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(10) Going Concern The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The
Company's financial position and operating results raise substantial
doubt about its ability to continue as a going concern, as reflected by
the net loss of $7,745,426 accumulated from August 7, 1997 (Inception)
through March 31, 1999. The ability of the Company to continue as a
going concern is dependent upon developing sales and obtaining
additional capital and financing. The financial statements do not
include any adjustments that might be necessary if the Company is
unable to continue as a going concern. The Company is currently
negotiating with potential national distributors and seeking additional
capital and financing to allow it to continue its planned operations.
F-9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
General
Environmental Construction Products International, Inc., f/k/a/ Ginsite
Materials, Inc. a Florida corporation, ("ECPI") was formed for the initial
purpose of manufacturing GINSITE(TM), a resin-bound innovative coating material
which is non-porous, waterproof and bonds directly to various surfaces. The
product is manufactured exclusively for the construction and marine markets. The
founding philosophy arose from a concern regarding the continued destruction of
the world's natural resources and specifically trees.
The Company was in the development stage until August 1999 when it entered
into an Agreement and Plan of Reorganization("Agreement") with Envirocon, Inc.,
a Nevada corporation. Envirocon possesses similar construction and building
industry skills and presented additional managerial skills which the Company
believes will enhance its ability to successfully market its GINSITE(TM) product
and accomplish its founding philosophy. From the date of the Agreement in August
1999 through September 30, 1999, the Company has not generated significant
revenues due to its reorganization efforts. Since the date of the Agreement
through September 30, 1999, the Company has generated cumulative losses of
approximately $____________. Although the Company has entered into a joint
venture agreement which may prove to be very positive to future growth there can
be no assurance that profitability or significant revenues on a quarterly or
annual basis will occur in the future.
On August 13, 1999, Ginsite Materials, Inc. (the "Company"), a Florida
corporation, and Envirocon Corporation("ECORP"), a Nevada corporation, and the
individual holders of at least 80%(Eighty Percent) of the outstanding capital
stock of ECORP (the "Holders") consummated a re- organization(the
"Reorganization") pursuant to a certain Agreement and Plan of Reorganization
("Agreement") of such date. Pursuant to the Agreement, the Holders tendered to
the Company at least 80% of the issued and outstanding 3,800,000 shares of
common stock of ECORP in exchange for 60% of the Shares of common stock of the
Company issued and outstanding immediately after completion of the
reorganization. Upon closing, ECORP became a subsidiary of Ginsite. The
reorganization is being accounted for as a reverse acquisition.
Simultaneously with the closing of the Reorganization, all of the then
officers and directors of the Company tendered their respective resignations in
accordance with the terms of the Agreement. Frank Glinton, George Anagnost,
Murray Ginsberg and Wayne Doss were elected to serve on the Board of Directors
of the newly reorganized Company (the "Board"). The fifth position on the Board
of Directors will be filled by agreement of the new Directors. The new Board
appointed Frank Glinton as the President and George Anagnost as senior
vice-president, secretary and treasurer of the Company.
Upon the execution of the Agreement, the Board of Directors of the newly
reorganized company transferred the operations and assets of Ginsite as they
existed prior to the reorganization to a wholly owned subsidiary of the newly
organized company(the "Subsidiary"), and appointed a five member board to
oversee the operations and management of the Subsidiary. The Subsidiary's Board
of Directors is made up of George Anagnost, Frank Glinton, Murray Ginsberg,
Wayne Doss with a fifth board member to be mutually agreed upon by the
Subsidiary's Board of Directors.
<PAGE>
On September 8, 1999, the newly reorganized Company announced that it had
approved by majority consent of its shareholders, in lieu of a shareholder
meeting, a name change to ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
("ECPI")and a five to one reverse split of its common stock as of the record
date of September 30, 1999.
On September 9, 1999, the Company also restated its Articles of
Incorporation on in order to increase the number of shares of common stock
authorized to be issued from Fifty Million (50,000,000) to One Hundred Million
(100,000,000) and to name its new board members.
Copies of the Agreement are incorporated herein by reference [See: Part II.
Item6.(b) Reports on Form 8-K] The foregoing descriptions are qualified in their
entirety by reference to the full text of such agreements.
Subsequent to the closing of the Agreement the former directors and
officers (including Murray Ginsberg) challenged the validity of the Agreement.
On October 19, 1999, the Company entered into a verbal Stipulation For
Settlement agreement with Murray Ginsberg, Henry Max and Audrey Max which also
joined Henry Lione and S. Barry Grieper ratifying and affirming the Plan of
Reorganization and acknowledging their respective resignations as directors as
well as the appointment of Frank Glinton as President and director, George
Anagnost as Vice President, Secretary, Treasurer and director, and Wayne Doss as
a director. The Settlement was approved by the parties and subsequently affirmed
by court order. [See: Part II. Item 6. Index to Exhibits. No. 4.3 - Order of the
Circuit Court.]
In August 1999, the Company entered into a Joint Venture Agreement with
Modular Homes Limited, a company incorporated in the country of India, to
jointly manufacture, market and produce ECPI's Panel Technology in India and
other countries of mutual interest under a license from ECPI (USA) [See. Part
II, Index to Exhibits, Exhibit No. 10.3 - Joint Venture Agreement]
Discussion and Analysis
The Company is currently marketing product, and expects to introduce other
products by the end of 2000.
Since execution of the agreement with ENVIROCON the Company has begun to
make preparations for a period of growth, which may require it to significantly
increase the scale of its operations. This increase will include the hiring of
additional personnel in all functional areas and will result in significantly
higher operating expenses. The increase in operating expenses is expected to be
matched by a concurrent increase in revenues. However, the Company's net gain
may not continue even if revenues increase and operating expenses may still
continue to increase. Expansion of the Company's operations may cause a
significant strain on the Company's management, financial and other resources.
The Company's ability to manage recent and any possible future growth, should it
occur, will depend upon a significant expansion of its accounting and other
internal management systems and the implementation and subsequent improvement of
a variety of systems, procedures and controls. There can be no assurance that
significant problems in these areas will not occur. Any failure to expand these
<PAGE>
areas and implement and improve such systems, procedures and controls in an
efficient manner at a pace consistent with the Company's business could have a
material adverse effect on the Company's business, financial condition and
results of operations. As a result of such expected expansion and the
anticipated increase in its operating expenses, as well as the difficulty in
forecasting revenue levels, the Company expects to continue to experience
significant fluctuations in its revenues, costs and gross margins, and therefore
its results of operations.
Results of Operations for the Three Months Ended September 30, 1999 and
1998
Overview
From its inception, the Company has incurred losses from operations. As of
September 30, 1999, the Company had cumulative net losses totaling approximately
$_____________ as compared with cumulative net losses totaling approximately
$________________ for the period ending September 30, 1998. Through fiscal 1998,
the Company focused primarily on developing its products, marketing and
organizational structure. During fiscal year 1999, management continued to
perfect its product and, in addition, sought out additional synergies to enhance
its managerial capabilities.
Financial Position
Working capital as of September 30, 1999 was a deficit of approximately
$____________, as compared to working capital deficit of approximately
$______________ at September 30, 1998. This increase is primarily due to receipt
of additional investor proceeds from the sale of the company's common stock.
Revenues
For the three months ended September 30, 1999 and 1998, the Company had
total net revenues of approximately $___________ and $____________,
respectively. For the three months ended September 30, 1999, revenues were
comprised primarily of __________________sales of its _______________ product.
The increase of approximately $________________is due to ______________ and its
ancillary sales.
Selling, General, and Administrative Expenses
For the three months ended September 30, 1999, operating expenses increased
by approximately $_____________ or _____% from $______________ for the three
months ended September 30, 1998. This increase is primarily related to costs
associated with _____________ as well as organizational and infrastructure
enhancements. In accordance with the Company's marketing plan for fiscal 1999
year, expenses related to promotion, trade shows, and conventions were increased
to enhance the industry awareness of the Company's products and services.
In the past, the Company has focused on the design and development of
proprietary products. For fiscal 2000, the Company anticipates launching an
aggressive marketing plan that is designed to increase worldwide sales of its
products. The Company believes that the increased operating expenses incurred
<PAGE>
during the three months ended September 30, 1999 will position the Company to
generate increased revenue in the second quarter and throughout its fiscal year
2000.
Liquidity and Capital Resources
The Company's operations are being funded primarily from
______________________, debentures and equity transactions.
It is the Company's intention to pursue additional debt and or equity
financing in the range of $___________________ to $__________________ during the
remainder of fiscal 1999, however, there can be no assurance that they will be
successful in their efforts. The Company believes that cash flows generated from
operations and borrowing capacity, combined with proceeds from future debt or
equity financing will provide adequate flexibility for funding the Company's
working capital obligations.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
The Company determined that the Year 2000 impact is not material to ECPI
and that it will not impact its business, operations or financial condition
since all of the internal software utilized by the Company has the capability of
being upgraded to support Year 2000 versions.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), demand
for the Company's products and services, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
<PAGE>
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
PART II
Item 1. Legal Proceedings.
Subsequent to the closing of the Agreement the former directors and
officers (including Murray Ginsberg) challenged the validity of the Agreement.
On October 19, 1999, the Company entered into a verbal Stipulation For
Settlement agreement with Murray Ginsberg, Henry Max and Audrey Max which also
joined Henry Lione and S. Barry Grieper ratifying and affirming the Plan of
Reorganization and acknowledging their respective resignations as directors as
well as the appointment of Frank Glinton as President and director, George
Anagnost as Vice President, Secretary, Treasurer and director, and Wayne Doss as
a director. On October 19, 1999, the Company appeared with counsel in the
Circuit Court for Broward County, Florida Case No.: 99-017314 to enter into open
court the Stipulation For Settlement as agreed to by all parties on October 19,
1999. The court entered an order on November 15, 1999 reaffirming the
Stipulation For Settlement with few exceptions.[See: Part II., Item 6., Index to
Exhibits, Exhibit No. 4.2 - Stipulation For Settlement] A motion to set aside
this order is pending. It is the opinion of Counsel for the Company that the
pending motion is without merit.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
For the quarter ending September 30, 1999, covered by this report the
following matters were submitted to a vote of the Company's shareholders,
through the solicitation of consents from shareholders:
1. On August 13, 1999 a majority of the Company's shareholder's voted to
approve the Share Exchange and Reorganization pursuant to a Plan of
Reorganization signed by the board of directors August 13, 1999.
2. On August 13, 1999 a majority of the Company's shareholder's voted to
approve the appointment of new members to the board of directors:
Frank Glinton, George Anagnost, Wayne Doss and Murray Ginsberg. A
fifth position on the board shall be filled upon a convening of the
newly appointed board of directors.
<PAGE>
3. On September 9, 1999, by majority consent of its shareholders, in lieu
of a shareholder meeting, the Company changed its name to
Environmental Products International, Inc. and approved a five to one
reverse stock split.
Item 5. Other Information
On July 6,1999, the Company filed its initial Form 10SB with the Securities
and Exchange Commission and became a fully reporting public company as of
September 7, 1999. Prior to becoming effective, on August 13, 1999, the Company
entered into an Agreement and Plan of Reorganization. This Agreement resulted in
a change of control of the Company's management. The Company filed a Form 8-K
with the Securities and Exchange on October 12, 1999 and will be providing
amendments to its original Form 10SB to accurately disclose all material
developments and information relating to the aforementioned reorganization .
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
(b) See attached Form 8-K filed with the U.S. Securities and Exchange
Commission on October 12, 1999 regarding events occurring during the
quarter ended September 30, 1999.
Exhibit No. Description
- -------------------------------------------------------------------------------
Item 1. Index to Exhibits
3.(i).1 Articles of Incorporation of Ginsite Materials, Inc.
filed August 7, 1997(1)
3.(i).2 Articles of Amendment to the Articles of Incorporation of Ginsite
Materials, Inc., filed April 16, 1999(1)
3.(i).3 * Restated Articles of Incorporation of Ginsite Materials,
Inc. filed September 9, 1999, superseding the original
Articles of Incorporation increasing the authorized Capital
Stock and appointing new directors.
3.(i).4 * Articles of Amendment to the Articles of Incorporation of
Ginsite Materials, Inc., changing the Name of Corporation to
Environmental Construction Products International, Inc., filed
September 16, 1999.
3.(i).5 * Articles of Share Exchange and Reorganization pursuant to a
Plan of Reorganization adopted August 13, 1999 and filed
October 13, 1999.
3.(ii).1 Bylaws of Ginsite Materials, Inc.(2)
4.1A Form of Private Offering(1)
4.1B Note Purchase Agreement, The Augustine Fund, L.P., (1)
4.2 Agreement and Plan of Reorganization Ginsite Materials, Inc.'s
Acquisition of ENVIROCON Corporation dated August 13, 1999. (2)
<PAGE>
10.1 Form Of Distributorship Agreement(1)
10.1A Distributorship Agreement, M J INNOVATIONS, Jean-A. Medici,
Michael Alderman(1)
10.1B Distributorship Agreement, Marcus Dean Rogozinski(1)
10.1C Distributorship Agreement, Fred Roneker(1)
10.2 Form Of License Agreement (1)
10.2A License Agreement, Concession Management of Palm Beach, Inc.(1)
10.3 Lease Agreement, Steven J. Cooperman, Trustee(1)
10.4A Employment Agreement Murray Ginsberg(1)
10.4B Employment Agreement Audrey Max(1)
10.4C Employment Agreement Henry Lione(1)
10.4D Employment Agreement Eugene Ladin(1)
10.4E Employment Agreement Barry Grieper(1)
10.4F Employment Agreement Henry Max(1)
10.5 Indemnification Agreement & Covenant Not To Sue
Murray Ginsberg(1)
10.6 Independent Marketing Services Agreement Wayne A. Doss(1)
10.7 Purchase & Sale Agreement with ECO Marine Materials, Inc.(1)
10.8A Consulting Agreement, Intercontinental Capital Corp.(1)
10.8B Consulting Agreement, Monetary Advancement International, Inc.(1)
10.8B.1 Consulting Agreement Termination & Mutual Release,
Monetary Advancement International, Inc.(1)
10.9A Assignment of Patent by Murray Ginsberg(1)
10.9B Patent Application & Status; Trademark Application & Status(1)
10.10.A.1 Promissory Note , Murray Ginsberg and Ginsite,
patent assignment.(1)
10.10.A.2 Promissory Note, Ginsite and Progressive Technology(1)
10.10.A.3 Promissory Note, Ginsite and Progressive Technology(1)
10.11 * Original License Agreement to Intellectual Property between
Paul Artzer, an individual, and ENVIROCON Corporation, a
Nevada corporation, October 13, 1998.
10.12 * Renewal of License Agreement to Intellectual Property
between Paul Artzer, an individual, and ENVIROCON Corporation,
a Nevada corporation, October 13, 1998..
10.13 * Joint Venture Agreement between Environmental Construction
Products International, Inc.(USA) and Modular Homes
Limited(INDIA) for the purpose of jointly manufacturing,
marketing and promoting ECPI Panel Technology in India dated
August 19, 1999.
27.1 * Financial Data Schedule
99.1 * Order of the Circuit Court of the Seventeenth Judicial
Circuit for Broward County, Florida Enforcing Settlement
between Environmental Construction Products International,
Inc., a Florida corporation, and Murray Ginsberg, Henry Max
and Audrey Max, dated November 15, 1999.
- -------------------
(1) Incorporated herein by reference to the Registration Statement on Form
10-SB of Ginsite Materials, Inc. (File No. 0-26609), filed with the U.S.
Securities and Exchange Commission.
<PAGE>
(2) Incorporated herein by reference to the Form 8-K of ENVIRONMENTAL
CONSTRUCTION PRODUCTS INTERNATIONAL f/k/a GINSITE MATERIALS, INC. (File No.
0-26609), filed with the U.S. Securities and Exchange Commission.
* Filed herewith
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
f/k/a
GINSITE MATERIALS, INC.
(Registrant)
Date: November 22, 1999 By: /s/ Frank Glinton
------------------------
Frank Glinton, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date Signature Title
---- --------- -----
November 22, 1999 By: /s/ Frank Glinton President & CEO
--------------------
Frank Glinton
November 22, 1999 By: /s/ George Anagnost Treasurer & CFO
--------------------
George Anagnost
EXHIBIT 3.(i).3
RESTATED
ARTICLES OF INCORPORATION
OF
GINSITE MATERIALS, INC.
KNOW ALL MEN BY THESE PRESENTS: That the undersigned members of the
Board of Directors of the Corporation hereby adopt, execute, and acknowledge
these Restated Articles of Incorporation pursuant to the laws of the State of
Florida:
ARTICLE I
NAME
The name of the Corporation is Ginsite Materials, Inc.
ARTICLE II
PERIOD OF DURATION
The Corporation shall exist in perpetuity, from the initial date of
filing of the Articles of Incorporation with the Secretary of State of the State
of Florida unless dissolved according to law.
ARTICLE III
PURPOSES AND POWERS
1. Purposes. Except as restricted by these Articles of Incorporation,
the Corporation is organized for the purpose of transacting all lawful business
for which corporations may be incorporated pursuant to Title 36, Chapter 607 of
the Florida Statutes.
2. General Powers. Except as restricted by these Articles of
Incorporation, the Corporation shall have and may exercise all powers and rights
that a corporation may exercise legally pursuant to Title 36 Chapter 607 of the
Florida Statutes.
ARTICLE IV
CAPITAL STOCK
The aggregate number of shares of all classes which the Corporation
shall have authority to issue is 100,000,000 which shall be Common Shares, par
value $0.001 per share, and the designations, preferences, limitations, and
relative rights of the shares are as follows:
a. The holders of the Common Shares shall be entitled to one vote for
each share of Common Shares held by them of record at the time for
determining the holders thereof entitled to vote.
-1-
<PAGE>
b Unless otherwise ordered by a court of competent jurisdiction, at
all meetings of shareholders, holders of a majority of the outstanding
Common Stock entitled to vote at such meeting, represented in person or by
proxy, shall constitute a quorum.
c. The holders of the outstanding Common Shares of the Corporation may
take any action by vote or concurrence of a majority, except as otherwise
required by the laws of the State of Florida.
ARTICLE V
DENIAL OF CUMULATIVE VOTING RIGHTS
Cumulative voting shall not be permitted in the election of directors
of this Corporation.
ARTICLE VI
DIRECTORS
The governing board of the Corporation shall be styled as a "Board of
Directors," and any member of said Board shall be styled as a "Director."
The Corporation shall have up to five Directors. The number of members
constituting the current Board of Directors of the Corporation is four (4); and
the names and post office boxes or street addresses of each of the persons who
shall serve as directors until the first annual meeting of shareholders and
until their successors are elected and shall qualify are:
Frank Glinton c/o ECPI, Inc.
2870 Speer Boulevard, Suite 205
Denver, Colorado 80211
George Anagnost c/o ECPI, Inc.
2870 Speer Boulevard, Suite 205
Denver, Colorado 80211
Wayne Doss c/o Ginsite Materials, Inc.
6781 West Sunrise Boulevard
Plantation, Florida 33313
Murray Ginsberg c/o Ginsite Materials, Inc.
6781 West Sunrise Boulevard
Plantation, Florida 33313
ARTICLE VII
LIABILITY OF DIRECTORS AND OFFICERS
The personal liability of the directors and officers of the Corporation
is hereby eliminated to the fullest extent permitted by Title 36, Chapter 607 of
the Florida Statutes or any corresponding provision of subsequent law, as the
same may be amended from time to time; provided, however, that if any amendment
to said laws shall operate to limit, reduce, or eliminate any person's rights to
have his or her personal liability eliminated as provided in this Article, then
the personal liability of each such person
-2-
<PAGE>
shall be eliminated to the fullest extent permitted by such laws immediately
prior to the effectiveness of such amendment. Any repeal or modification of this
Article shall be prospective only and shall not adversely affect any limitation
on the personal liability of a director or officer of the Corporation for acts
or omissions prior to such repeal or modification.
ARTICLE VIII
INDEMNIFICATION
The Corporation may indemnify any director, officer, employee,
fiduciary, or agent of the corporation to the full extent permitted by the laws
of the State of Florida, as may be amended and supplemented.
ARTICLE IX
ADOPTION AND AMENDMENT OF BYLAWS
The current Bylaws of the Corporation shall be adopted by its Board of
Directors to the extent that such Bylaws are not inconsistent with these
Articles of Incorporation. Subject to repeal or change by action of the
shareholders, the power to alter, amend, or repeal the Bylaws or adopt new
Bylaws shall be vested in the Board of Directors. The Bylaws may contain any
provisions for the regulation and management of the affairs of the Corporation
not inconsistent with law or these Articles of Incorporation.
ARTICLE X
RESIDENT AGENT
The name of the Corporation's resident agent and the street and mailing
address in Florida for such resident agent where process may be served upon the
Corporation are:
Corporation Service Company
1201 Hays Street
Tallahassee, Florida 32301
The resident agent may be changed in the manner permitted by law.
IN WITNESS WHEREOF, the below-named members of the Board of Directors
of the Corporation have signed these Articles of Incorporation this 9th day of
September 1999.
/s/ Frank Glinton
----------------------
by: Frank Glinton, President and Member of
the Board of Directors
ATTEST:
/s/ George Anagnost
- ----------------------
by: George Anagnost
-3-
<PAGE>
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
I, /s/ Corporation Service Company, hereby accept appointment
as Resident Agent for the above named corporation this 14th day of September,
1999.
/s/ Laura R. Dunlap
--------------------
Laura R. Dunlap as its agent
-4-
EXHIBIT 3.(i).4
AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
GINSITE MATERIALS, INC.
Pursuant to the provisions of Section 607.1006, Florida Statutes, this
Corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
First: The name of the Corporation, GINSITE MATERIALS, INC., is hereby changed
to ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL, INC. by amending Article 1
of the Restated Articles of Incorporation to read as follows:
ARTICLE 1
NAME
The name of the Corporation is ENVIRONMENTAL CONSTRUCTION PRODUCTS
INTERNATIONAL, INC.
Second: The amendments were adopted on September 16, 1999, by resolution of the
Board of Directors and written consent of the stockholders, in accordance with
Section 607.0704, Florida Statutes, representing a sufficient number of votes
necessary to approve these amendments.
Signed and certified on September 16, 1999.
/s/ Frank Glinton
----------------------------
by: Frank Glinton, President
ATTEST:
/s/ George Anagnost
- ------------------------------
by: George Anagnost, Secretary
EXHIBIT 3.(i).5
ARTICLES OF SHARE EXCHANGE
(Profit Corporation)
The following articles of share exchange are submitted in accordance
with the Florida Business Corporation Act, pursuant to Sections 607.1102 through
607.1107, F.S.
FIRST: The name and jurisdiction of the surviving corporation is:
Name Jurisdiction
- -------- ---------------
Environmental Construction Products
International, Inc., formerly known as
Ginsite Materials Inc. A Florida Corporation
SECOND: The name and jurisdiction of the corporation acquired by an exchange
of shares is:
Name Jurisdiction
- -------- -------------------
Envirocon Corporation A Nevada Corporation
THIRD: The plan of share exchange entitled "Agreement and Plan of
Reorganization Ginsite Materials, Inc.'s Acquisition of Envirocon
Corporation" is attached hereto as Exhibit A.
FOURTH: The reorganization shall become effective on the date the Articles of
Share Exchange are filed.
FIFTH: Adoption by surviving corporation. The plan of share exchange was
adopted by the shareholders of the surviving corporation on August 13,
1999 pursuant to Section 607.0704.
SIXTH: Adoption by the acquired corporation. The plan of share exchange was
adopted by shareholders holding greater than 80% of the authorized and
outstanding shares of the acquired corporation on or about August
16, 1999 pursuant to Section 607.0704.
SEVENTH: Signatures for each Corporation
Date: October 13, 1999
ENVIROCON CORPORATION
/s/ Frank Glinton
- ---------------------
Frank Glinton, President and a
Member of the Board of Directors
<PAGE>
ATTEST:
/s/ George Anagnost
- -------------------------
George Anagnost, Secretary and a
Member of the Board of Directors
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL, INC. F/K/A GINSITE
MATERIALS, INC.
/s/ Frank Glinton
- -----------------------
Frank Glinton, President and a Member
of the Board of Directors
ATTEST:
/s/ George Anagnost
- --------------------------
George Anagnost, Senior Vice President,
Secretary and a Member of the Board of
Directors
EXHIBIT 10.11
LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective the
13th day of October, 1998 between PAUL ARTZER, an individual ("Artzer"); and
ENVIROCON CORPORATION, a Nevada corporation (the "Envirocon").
R E C I T A L S
A. Artzer desires to license and/or convey, under circumstances described
below, certain intellectual property described below; and
B. Envirocon desires to acquire a license to and/or ownership of the
intellectual property described below.
NOW, THEREFORE, the parties agree as follows:
1. License of Intellectual Property. Subject to the terms and
conditions of this Agreement, on the Closing Date and in consideration of the
Purchase Price set forth below, Artzer will grant to Envirocon an irrevocable,
exclusive, fully-paid, royalty-free, unrestricted license to use all
intellectual property of Artzer (the "License"), deriving from Artzer's right,
title and interest in and to (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium), insofar and only
insofar as any of the above-described items cover or relate to cotton products,
housing panel systems, and machinery and manufacturing equipment associated
therewith, but not otherwise.
The intellectual property of Artzer being licensed to Envirocon is
hereafter referred to as the "Intellectual Property."
2. Purchase Price. The Purchase Price for the License is One Hundred Fifty
Thousand United States Dollars ($150,000).
Initials:Artzer:PA Envirocon FG
1
<PAGE>
3. Payment of Purchase Price. Envirocon has already advanced $89,000 of the
Purchase Price to Artzer (directly or to other persons for the benefit of
Artzer) and Artzer acknowledges receipt of same. Envirocon shall pay to Artzer
$61,000, which constitutes the balance of the Purchase Price, on or before the
date that Envirocon has obtained equity capital in an amount not less than
$1,000,000. In the event that Closing does not occur, Artzer agrees to return to
Envirocon, within ten business days, any portion of the Purchase Price advanced
to Artzer.
4. Transfer of Ownership of Intellectual Property. Artzer will assign and
transfer ownership of the Intellectual Property to Envirocon for no additional
consideration after (i) payment of the Purchase Price and (ii) Envirocon has
obtained equity capital in an amount not less than $1,000,000.
5. Artzer's Representations and Warranties. Artzer, on behalf of himself
and his successors and affiliates, represents and warrants to Envirocon as
follows:
5.1 Authorization. Artzer has the full power and authority to
enter into this Agreement and to carry out his obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not violate, result in a breach of, or
constitute a default under any judgment, order or decree to which Artzer is
subject. The execution, delivery and performance of this Agreement by Artzer
will not violate, with or without the giving of notice and/or the passage of
time, any provision of law now applicable to Artzer, or result in the creation
of any lien, charge or encumbrance upon any of the assets of Artzer pursuant to
any indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which Artzer is a party or by which Artzer may be bound, or to
which he may be subject. The transactions contemplated by this Agreement will
not require the authorization, consent or approval of any third party.
5.2 Title to License. Artzer is the owner and has good and
marketable title to the Intellectual Property being licenses and/or transferred
to Envirocon hereunder, free and clear of all claims, liens, pledges or
encumbrances of any kind, and if and when ownership of the Intellectual Property
is transferred, Envirocon will receive good and marketable title to the
Intellectual Property, free and clear of all claims, liens, pledges or
encumbrances of any kind.
5.3 No Commitments. Artzer is not a party to or bound by any
written or oral agreement, partnership, joint venture, lease, commitment or
other understanding or obligation which affects the Intellectual Property.
5.4 Compliance with Laws. Artzer is not in violation in any
material respect of any law, rule, regulation, order, injunction or decree of
the government or courts of the United States or any state or other jurisdiction
which affects or could affect, directly or indirectly, the Intellectual
Property.
5.5 Intangible Assets. All of Artzer's patents, trademarks,
trade names and copyrights, and registration and applications therefor, if any,
are valid and in good standing, and no proceedings involving the invalidity
thereof or ownership by Artzer thereof are pending or to Artzer's knowledge have
been threatened. Artzer owns the entire right, title and interest in
Initials:Artzer:PA Envirocon FG
2
<PAGE>
and to, and has the exclusive right to, the patents, trademarks, trade names,
service marks and copyrights, as well as trade secrets, formulae and processes
included in the Intellectual Property. Use of the Intellectual Property does not
infringe upon the patent, trademark, service mark, copyright or confidential
information, formulae, or trade secrets of any third party.
5.6 No Litigation. There is (i) no litigation, proceeding,
arbitral action or governmental investigation pending or threatened against
Artzer or any of its assets, and (ii) no decree, injunction or order of any
court or governmental department or agency outstanding against Artzer.
5.7 Disclosure. No representation, warranty or statement in
this Agreement, nor in any exhibit, certificate or schedule hereto or to be
delivered to Envirocon pursuant to this Agreement, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained therein or herein not misleading.
5.8 Effect of This Agreement. The execution, delivery and
performance of this Agreement by Artzer and the consummation of the transactions
contemplated herein by Artzer and Envirocon do not require the consent, waiver,
approval, license or authorization of any person or public authority; do not
violate in any material respect any provision of law applicable to Artzer; and
do not violate any restriction of any kind or character in any agreement between
Artzer and any other party. The consummation of this transaction does not result
in the creation of any lien, charge or encumbrance on any of the Intellectual
Property.
5.9 No Prior Disclosure. Artzer has not disclosed or
disseminated any of the secret or confidential information which constitutes a
part of the Intellectual Property at any time prior to the date of this
Agreement to any third parties.
5.10 Continuing Obligation. Due to the nature of the
Intellectual Property and the necessity that Artzer convey personal knowledge of
the Intellectual Property to Envirocon to enable Envirocon to use and receive
the benefits of the Intellectual Property, Artzer agrees to make himself
available from time to time, upon reasonable request of Envirocon, to provide
information and advice concerning the Intellectual Property and the use thereof
on a continuing basis.
6. Representations and Warranties of Envirocon. Envirocon hereby
represents and warrants to Artzer as follows:
6.1 Corporate Existence. Envirocon is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Envirocon has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder.
6.2 Corporate Authority. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated hereby have been duly and effectively authorized by
all necessary corporate action. This Agreement, upon its execution by Envirocon
and Artzer, shall constitute a legal, valid and binding obligation of Envirocon,
enforceable in accordance with its terms, except as they may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditor's rights generally.
6.3 Effective Agreement. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated herein do notrequire the consent, waiver or approval
Initials:Artzer:PA Envirocon FG
3
<PAGE>
approval of any person or public authority; do not violate in any material
respect any provision of law applicable to Envirocon; do not result in a breach
of the Articles of Incorporation or Bylaws of Envirocon and do not violate any
other restriction of any character which may be imposed upon Envirocon.
7. Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall be deemed effective at the close of business on
October 14, 1998 (the "Closing Date").
8. Indemnification.
8.1 Indemnification by Artzer. Artzer hereby agrees to
indemnify, defend and hold harmless Envirocon, from, against, and with respect
to any claim, liability, obligation, loss, damage, assessment, tax, judgment,
action, suit, proceeding, demand, cost or expense (including, without
limitation, reasonable attorneys fees and costs, and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting any
litigation or claim), of any kind or character, arising out of or in any manner
incident, relating or attributable to any failure of Artzer to perform or
observe, or to have performed or observed, in full, any covenant, agreement or
condition to be performed or observed by Artzer under this Agreement or under
any certificate or other document or agreement signed by Artzer in connection
with this Agreement, or arising out of or in any manner incident, relating or
attributable to the breach of any representation or warranty by Artzer under
this Agreement or under any certificate or other document or agreement signed by
Artzer in connection with this Agreement. The obligations contained in this
Section shall survive Closing.
8.2 Indemnification by Envirocon. Envirocon hereby agrees to
indemnify, defend and hold Artzer harmless from, against and with respect to any
claim, liability, obligation, loss, damage, assessment, tax, judgment, action,
suit, proceeding or demand, cost or expense (including, without limitation,
reasonable attorneys fees and costs, and expenses reasonably incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim), of any kind or character, arising out of or attributable to any failure
of Envirocon to perform or observe, or to have performed or observed, any
covenant, agreement or condition of Envirocon under this Agreement, or relating
or attributable to the breach of any representation or warranty by Envirocon
under this Agreement or under any certificate or other document or agreement
signed by Envirocon in connection with this Agreement. The obligations contained
in this Section shall survive Closing.
8.3 Notice and Defense. In the case of any action or claim
brought by a third party against Envirocon, or Artzer, for an indemnifiable
claim, the party against whom the claim is brought must, as a condition to
enforceability of the other parties indemnity obligations hereunder, give the
party to whom the obligation to indemnify may accrue written notice of the
action or claim within five business days of receipt of actual notice and afford
such party the opportunity to direct and control the negotiations, defense and
settlement of the action or claim. The indemnifying party may elect within
twenty (20) days after receipt of such notice to contest the claim in such
manner as it deems necessary or advisable. If the indemnifying party elects to
contest such claim, the indemnified party shall have the right to appoint
associate counsel in such proceedings at its own expense. The indemnifying party
shall not have the right to settle an indemnifiable matter except with the
consent of the indemnified party. The indemnified party shall permit the
indemnifying party reasonable access to the books and records of the indemnified
party and its subsidiaries and shall otherwise cooperate with the indemnifying
party in connection with any matter or claim for indemnification. If the
indemnifying party does not elect to contest such claim, the indemnified party
shall have the exclusive right to prosecute, defend, compromise, settle or pay
Initials:Artzer:PA Envirocon FG
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<PAGE>
such claim and receive indemnification therefor. If neither the indemnifying
party nor the indemnified party elect to contest the claim, then the
indemnifying party shall pay the amount of any indemnifiable claim within 30
days after receipt of the notice of claim.
8.4 Third-Party Indemnification. Each of Artzer and Envirocon
shall make a good faith attempt (which shall not be deemed to include an
obligation to commence any litigation) to seek indemnification from any third
parties, including insurers, who may be liable upon any claims made against
Artzer or Envirocon and for which the other party would be liable under this
Section. To the extent either party indemnifies the other party for claims upon
which third parties, including insurers, may be liable, the indemnified party
shall, to the extent permissible, subrogate to the indemnifying party its rights
with respect to such claims.
9. Covenant Not To Compete. As a further inducement to Envirocon to
enter into this Agreement, Artzer, on behalf of himself and his successors and
affiliates, including but not limited to Cotton Products & Machinery, LLC,
covenants and agrees as follows:
9.1 Confidentiality. Artzer and his successors and affiliates
shall hold in confidence, and shall not disclose any and all secret or
confidential information which constitutes a part of the Intellectual Property
at any time subsequent to the Closing Date, and shall not use any such
information after Closing for any purpose whatsoever without the prior written
consent of Envirocon.
9.2 Non-Competition. Artzer and his successors and affiliates
shall not, either alone or in partnership or in conjunction with any person,
firm, association, syndication, company or corporation as principal, agent,
consultant, employee or shareholder, directly or indirectly, or in any other
manner engage in competition with Envirocon for a period of six (6) years from
the Closing. During such six (6) year period, the parties named in this Section
shall not directly or indirectly solicit or entice or in any way divert any
vendor, supplier, customer, distributor or strategic relationship of Envirocon
to do business with any entity in a manner which impairs or competes with the
conduct of Envirocon's business. In no event may the Intellectual Property be
used in any way by Artzer or his successors or affiliates.
9.3 Equitable Relief. Artzer acknowledges the irreparable
injury that will result to Envirocon and its business and properties if such
parties should breach the covenants contained in this section and understands
that Envirocon entered into this Agreement in reliance upon such covenants.
Accordingly, if any of the parties listed in this section should breach such
covenants, Envirocon's remedies may include, in addition to other available
remedies and damages, injunctive relief enjoining breach of such covenants
without posting a bond. The rights and obligations contained in this Section
shall survive Closing.
10. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any exhibits delivered pursuant hereto shall be
deemed to be material and to have been relied upon by Envirocon and Artzer,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of Envirocon or Artzer, and shall survive the Closing for a period of three (3)
years.
11. Notices. To be effective, any notice hereunder shall be in writing,
delivered in person or mailed by certified or registered mail, postage prepaid,
to the appropriate party or parties at the addresses set forth below their
signatures hereto, or to such other address as the parties may hereinafter
designate.
Initials:Artzer:PA Envirocon FG
5
<PAGE>
12. Amendment and/or Modification. Neither this Agreement nor any term
or provision hereof may be changed, waived, discharged, amended or modified
orally, or in any manner other than by an instrument in writing signed by all of
the parties hereto.
13. Binding Effect. Subject to provisions hereof regarding assignment,
if any, this Agreement shall be binding upon and inure to the benefit of the
respective parties, and their legal representatives, successors, assigns and
heirs.
14. Interpretation and Fair Construction of Contract. This Agreement
has been reviewed and approved by each of the parties. In the event it should be
determined that any provision of this Agreement is uncertain or ambiguous, the
language in all parts of this Agreement shall be in all cases construed as a
whole according to its fair meaning and not strictly construed for nor against
either party.
15. Undertaking and Further Assurances. Each party to this Agreement
shall perform any and all acts and execute and deliver any and all documents as
may be necessary and proper under the circumstances in order to accomplish the
intents and purposes of this Agreement and to carry out its provisions.
16. Costs and Attorneys' Fees. If any party hereto shall bring any
suit, arbitration or other action against another for relief, declaratory or
otherwise, arising out of this Agreement, the substantially prevailing party
shall have and recover against the other party, in addition to all costs and
disbursements, such sum as the Court or arbiter may determine to be a reasonable
attorney's fee.
17. Waiver of Breach. The failure of any party hereto to insist upon
strict performance of any of the covenants and agreements herein contained, or
to exercise any option or right herein conferred, in any one or more instances,
shall not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, but the same shall be and remain
in full force and effect.
18. Specific Performance. The parties hereto acknowledge that the
rights of Envirocon to consummate the transactions contemplated herein are
unique and of an extraordinary character, and that, in the event that Artzer
fails to perform in accordance with this Agreement, Envirocon will be without an
adequate remedy at law. The parties agree, therefore, that in such event
Envirocon may, in addition to any remedies at law for damages or other relief or
other rights or remedies, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of this Agreement or seek
any injunction or other equitable relief, and Artzer hereby waives the defense
that Envirocon has adequate remedy at law.
19. Entire Agreement. This Agreement (and any attached exhibits)
contains the entire agreement and understanding of the parties with respect to
the entire subject matter hereof, and there are no representations, inducements,
promises or agreements, oral or otherwise, not embodied herein. Any and all
prior discussions, negotiations, commitments and understandings relating thereto
are merged herein. There are no conditions precedent to the effectiveness of
this Agreement other than as stated herein, and there are no related collateral
agreements existing between the parties that are not referenced herein.
Initials:Artzer:PA Envirocon FG
6
<PAGE>
20. Expenses. Subject to the Indemnification provisions above, all
costs and expenses incurred by either party in negotiating this Agreement or in
consummating the transactions contemplated hereby, except as provided herein,
shall be paid by the party incurring such expenses.
21. Governing Law and Venue. The parties agree that this Agreement and
the transactions contemplated hereby shall be construed and enforced in
accordance with the laws of the State of Colorado, and that any action or
proceeding that may be brought arising out of, in connection with or by reason
of this Agreement shall be brought only in a court of competent jurisdiction
within the city and county of Denver, Colorado. Each of the parties hereto
hereby submits, unconditionally and irrevocably, to the jurisdiction to the
aforesaid courts for the purpose of any such lawsuits.
In the event of termination of this Agreement by mutual agreement of
the parties, then Envirocon and Artzer intend that no party would have any claim
against any other party resulting from or related to the failure to consummate
the proposed transactions, and that each party would, in any such case, pay its
own costs and attorneys' fees incurred as a result.
22. Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
23. Headings. The section headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
24. Counterparts and Facsimile Signatures. This Agreement and any
exhibits, attachments, or documents ancillary hereto, may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
effective on the date first set forth above.
Artzer: ENVIROCON:
PAUL ARTZER ENVIROCON CORPORATION
/s/ Paul Artzer a Nevada corporation
- ---------------- By:/s/ Frank Glinton
-----------------------
Frank Glinton, President
Address: Address:
7
EXHIBIT 10.12
LICENSE AGREEMENT
An initial License Agreement was previously entered into effective the
13th day of October, 1998 between PAUL ARTZER, an individual ("Artzer"); and
ENVIROCON CORPORATION, a Nevada corporation (the "Envirocon"). This License
Agreement (this "Agreement") acknowledges and confirms the terms therein.
R E C I T A L S
A. Artzer desires to license and/or convey, under circumstances
described below, certain intellectual property described below; and
B. Envirocon desires to acquire a license to and/or ownership of the
intellectual property described below.
NOW, THEREFORE, the parties agree as follows:
1. License of Intellectual Property. Subject to the terms and conditions of
this Agreement, on the Closing Date and in consideration of the Purchase Price
set forth below, Artzer will grant to Envirocon an irrevocable, exclusive,
fully-paid, royalty-free, unrestricted license to use all intellectual property
of Artzer (the "License"), deriving from Artzer's right, title and interest in
and to (a) all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and
corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium), insofar and only
insofar as any of the above-described items cover or relate to cotton products,
housing panel systems, and machinery and manufacturing equipment associated
therewith, but not otherwise.
The intellectual property of Artzer being licensed to Envirocon is
hereafter referred to as the "Intellectual Property."
2. Purchase Price. The Purchase Price for the License is comprised of:
a. Payment from Envirocon to Artzer of One Hundred Fifty Thousand
United States Dollars ($150,000); and
<PAGE>
b. Issuance of $250,000 shares of Envirocon common stock from
Envirocon to Artzer, and distributed at Artzer's direction as follows (i)
76,500 shares to Paul Artzer, (ii) 122,500 shares to Terri Artzer, and
(iii) 51,000 shares to Charles L. Smith.
3. Payment of Purchase Price. Envirocon has already issued the 250,000
shares of common stock at $0.25 per share and has advanced $116,000 of the
Purchase Price to Artzer (directly or to other persons for the benefit of
Artzer) and Artzer acknowledges receipt of same. Envirocon shall pay to Artzer
$34,000, which constitutes the balance of the Purchase Price, on or before the
date that Envirocon has obtained equity capital in an amount not less than
$1,000,000. In the event that Closing does not occur, Artzer agrees to return to
Envirocon, within ten business days, any portion of the Purchase Price advanced
to Artzer.
4. Transfer of Ownership of Intellectual Property. Artzer will assign and
transfer ownership of the Intellectual Property to Envirocon for no additional
consideration after (i) payment of the Purchase Price and (ii) Envirocon has
obtained equity capital in an amount not less than $1,000,000.
5. Artzer's Representations and Warranties. Artzer, on behalf of himself
and his successors and affiliates, represents and warrants to Envirocon as
follows:
5.1 Authorization. Artzer has the full power and authority to
enter into this Agreement and to carry out his obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not violate, result in a breach of, or
constitute a default under any judgment, order or decree to which Artzer is
subject. The execution, delivery and performance of this Agreement by Artzer
will not violate, with or without the giving of notice and/or the passage of
time, any provision of law now applicable to Artzer, or result in the creation
of any lien, charge or encumbrance upon any of the assets of Artzer pursuant to
any indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which Artzer is a party or by which Artzer may be bound, or to
which he may be subject. The transactions contemplated by this Agreement will
not require the authorization, consent or approval of any third party.
5.2 Title to License. Artzer is the owner and has good and
marketable title to the Intellectual Property being licenses and/or transferred
to Envirocon hereunder, free and clear of all claims, liens, pledges or
encumbrances of any kind, and if and when ownership of the Intellectual Property
is transferred, Envirocon will receive good and marketable title to the
Intellectual Property, free and clear of all claims, liens, pledges or
encumbrances of any kind.
5.3 No Commitments. Artzer is not a party to or bound by any
written or oral agreement, partnership, joint venture, lease, commitment or
other understanding or obligation which affects the Intellectual Property.
5.4 Compliance with Laws. Artzer is not in violation in any
material respect of any law, rule, regulation, order, injunction or decree of
the government or courts of the United States or any state or other jurisdiction
which affects or could affect, directly or indirectly, the Intellectual
Property.
5.5 Intangible Assets. All of Artzer's patents, trademarks,
trade names and copyrights, and registration and applications therefor, if any,
are valid and in good standing, and no proceedings involving the invalidity
thereof or ownership by Artzer thereof are pending or to Artzer's knowledge have
been threatened. Artzer owns the entire right, title and interest in and to, and
<PAGE>
has the exclusive right to, the patents, trademarks, trade names, service marks
and copyrights, as well as trade secrets, formulae and processes included in the
Intellectual Property. Use of the Intellectual Property does not infringe upon
the patent, trademark, service mark, copyright or confidential information,
formulae, or trade secrets of any third party.
5.6 No Litigation. There is (i) no litigation, proceeding,
arbitral action or governmental investigation pending or threatened against
Artzer or any of its assets, and (ii) no decree, injunction or order of any
court or governmental department or agency outstanding against Artzer.
5.7 Disclosure. No representation, warranty or statement in
this Agreement, nor in any exhibit, certificate or schedule hereto or to be
delivered to Envirocon pursuant to this Agreement, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained therein or herein not misleading.
5.8 Effect of This Agreement. The execution, delivery and
performance of this Agreement by Artzer and the consummation of the transactions
contemplated herein by Artzer and Envirocon do not require the consent, waiver,
approval, license or authorization of any person or public authority; do not
violate in any material respect any provision of law applicable to Artzer; and
do not violate any restriction of any kind or character in any agreement between
Artzer and any other party. The consummation of this transaction does not result
in the creation of any lien, charge or encumbrance on any of the Intellectual
Property.
5.9 No Prior Disclosure. Artzer has not disclosed or
disseminated any of the secret or confidential information which constitutes a
part of the Intellectual Property at any time prior to the date of this
Agreement to any third parties.
5.10 Continuing Obligation. Due to the nature of the
Intellectual Property and the necessity that Artzer convey personal knowledge of
the Intellectual Property to Envirocon to enable Envirocon to use and receive
the benefits of the Intellectual Property, Artzer agrees to make himself
available from time to time, upon reasonable request of Envirocon, to provide
information and advice concerning the Intellectual Property and the use thereof
on a continuing basis.
6. Representations and Warranties of Envirocon. Envirocon hereby represents
and warrants to Artzer as follows:
6.1 Corporate Existence. Envirocon is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Envirocon has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder.
6.2 Corporate Authority. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated hereby have been duly and effectively authorized by
all necessary corporate action. This Agreement, upon its execution by Envirocon
and Artzer, shall constitute a legal, valid and binding obligation of Envirocon,
enforceable in accordance with its terms, except as they may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditor's rights generally.
6.3 Effective Agreement. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated herein do not require the consent, waiver or approval
<PAGE>
of any person or public authority; do not violate in any material respect any
provision of law applicable to Envirocon; do not result in a breach of the
Articles of Incorporation or Bylaws of Envirocon and do not violate any other
restriction of any character which may be imposed upon Envirocon.
7. Closing. The closing of the transactions provided for in this Agreement
(the "Closing") shall be deemed effective at the close of business on October
14, 1998 (the "Closing Date").
8. Indemnification.
8.1 Indemnification by Artzer. Artzer hereby agrees to
indemnify, defend and hold harmless Envirocon, from, against, and with respect
to any claim, liability, obligation, loss, damage, assessment, tax, judgment,
action, suit, proceeding, demand, cost or expense (including, without
limitation, reasonable attorneys fees and costs, and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting any
litigation or claim), of any kind or character, arising out of or in any manner
incident, relating or attributable to any failure of Artzer to perform or
observe, or to have performed or observed, in full, any covenant, agreement or
condition to be performed or observed by Artzer under this Agreement or under
any certificate or other document or agreement signed by Artzer in connection
with this Agreement, or arising out of or in any manner incident, relating or
attributable to the breach of any representation or warranty by Artzer under
this Agreement or under any certificate or other document or agreement signed by
Artzer in connection with this Agreement. The obligations contained in this
Section shall survive Closing.
8.2 Indemnification by Envirocon. Envirocon hereby agrees to
indemnify, defend and hold Artzer harmless from, against and with respect to any
claim, liability, obligation, loss, damage, assessment, tax, judgment, action,
suit, proceeding or demand, cost or expense (including, without limitation,
reasonable attorneys fees and costs, and expenses reasonably incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim), of any kind or character, arising out of or attributable to any failure
of Envirocon to perform or observe, or to have performed or observed, any
covenant, agreement or condition of Envirocon under this Agreement, or relating
or attributable to the breach of any representation or warranty by Envirocon
under this Agreement or under any certificate or other document or agreement
signed by Envirocon in connection with this Agreement. The obligations contained
in this Section shall survive Closing.
8.3 Notice and Defense. In the case of any action or claim
brought by a third party against Envirocon, or Artzer, for an indemnifiable
claim, the party against whom the claim is brought must, as a condition to
enforceability of the other parties indemnity obligations hereunder, give the
party to whom the obligation to indemnify may accrue written notice of the
action or claim within five business days of receipt of actual notice and afford
such party the opportunity to direct and control the negotiations, defense and
settlement of the action or claim. The indemnifying party may elect within
twenty (20) days after receipt of such notice to contest the claim in such
manner as it deems necessary or advisable. If the indemnifying party elects to
contest such claim, the indemnified party shall have the right to appoint
associate counsel in such proceedings at its own expense. The indemnifying party
shall not have the right to settle an indemnifiable matter except with the
consent of the indemnified party. The indemnified party shall permit the
indemnifying party reasonable access to the books and records of the indemnified
party and its subsidiaries and shall otherwise cooperate with the indemnifying
party in connection with any matter or claim for indemnification. If the
indemnifying party does not elect to contest such claim, the indemnified party
shall have the exclusive right to prosecute, defend, compromise, settle or pay
<PAGE>
such claim and receive indemnification therefor. If neither the indemnifying
party nor the indemnified party elect to contest the claim, then the
indemnifying party shall pay the amount of any indemnifiable claim within 30
days after receipt of the notice of claim.
8.4 Third-Party Indemnification. Each of Artzer and Envirocon
shall make a good faith attempt (which shall not be deemed to include an
obligation to commence any litigation) to seek indemnification from any third
parties, including insurers, who may be liable upon any claims made against
Artzer or Envirocon and for which the other party would be liable under this
Section. To the extent either party indemnifies the other party for claims upon
which third parties, including insurers, may be liable, the indemnified party
shall, to the extent permissible, subrogate to the indemnifying party its rights
with respect to such claims.
9. Covenant Not To Compete. As a further inducement to Envirocon to enter
into this Agreement, Artzer, on behalf of himself and his successors and
affiliates, including but not limited to Cotton Products & Machinery, LLC,
covenants and agrees as follows:
9.1 Confidentiality. Artzer and his successors and affiliates
shall hold in confidence, and shall not disclose any and all secret or
confidential information which constitutes a part of the Intellectual Property
at any time subsequent to the Closing Date, and shall not use any such
information after Closing for any purpose whatsoever without the prior written
consent of Envirocon.
9.2 Non-Competition. Artzer and his successors and affiliates
shall not, either alone or in partnership or in conjunction with any person,
firm, association, syndication, company or corporation as principal, agent,
consultant, employee or shareholder, directly or indirectly, or in any other
manner engage in competition with Envirocon for a period of six (6) years from
the Closing. During such six (6) year period, the parties named in this Section
shall not directly or indirectly solicit or entice or in any way divert any
vendor, supplier, customer, distributor or strategic relationship of Envirocon
to do business with any entity in a manner which impairs or competes with the
conduct of Envirocon's business. In no event may the Intellectual Property be
used in any way by Artzer or his successors or affiliates.
9.3 Equitable Relief. Artzer acknowledges the irreparable
injury that will result to Envirocon and its business and properties if such
parties should breach the covenants contained in this section and understands
that Envirocon entered into this Agreement in reliance upon such covenants.
Accordingly, if any of the parties listed in this section should breach such
covenants, Envirocon's remedies may include, in addition to other available
remedies and damages, injunctive relief enjoining breach of such covenants
without posting a bond. The rights and obligations contained in this Section
shall survive Closing.
10. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any exhibits delivered pursuant hereto shall be
deemed to be material and to have been relied upon by Envirocon and Artzer,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of Envirocon or Artzer, and shall survive the Closing for a period of three (3)
years.
11. Notices. To be effective, any notice hereunder shall be in writing,
delivered in person or mailed by certified or registered mail, postage prepaid,
to the appropriate party or parties at the addresses set forth below their
signatures hereto, or to such other address as the parties may hereinafter
designate.
<PAGE>
12. Amendment and/or Modification. Neither this Agreement nor any term or
provision hereof may be changed, waived, discharged, amended or modified orally,
or in any manner other than by an instrument in writing signed by all of the
parties hereto.
13. Binding Effect. Subject to provisions hereof regarding assignment, if
any, this Agreement shall be binding upon and inure to the benefit of the
respective parties, and their legal representatives, successors, assigns and
heirs.
14. Interpretation and Fair Construction of Contract. This Agreement has
been reviewed and approved by each of the parties. In the event it should be
determined that any provision of this Agreement is uncertain or ambiguous, the
language in all parts of this Agreement shall be in all cases construed as a
whole according to its fair meaning and not strictly construed for nor against
either party.
15. Undertaking and Further Assurances. Each party to this Agreement shall
perform any and all acts and execute and deliver any and all documents as may be
necessary and proper under the circumstances in order to accomplish the intents
and purposes of this Agreement and to carry out its provisions.
16. Costs and Attorneys' Fees. If any party hereto shall bring any suit,
arbitration or other action against another for relief, declaratory or
otherwise, arising out of this Agreement, the substantially prevailing party
shall have and recover against the other party, in addition to all costs and
disbursements, such sum as the Court or arbiter may determine to be a reasonable
attorney's fee.
17. Waiver of Breach. The failure of any party hereto to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred, in any one or more instances,
shall not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, but the same shall be and remain
in full force and effect.
18. Specific Performance. The parties hereto acknowledge that the rights of
Envirocon to consummate the transactions contemplated herein are unique and of
an extraordinary character, and that, in the event that Artzer fails to perform
in accordance with this Agreement, Envirocon will be without an adequate remedy
at law. The parties agree, therefore, that in such event Envirocon may, in
addition to any remedies at law for damages or other relief or other rights or
remedies, institute and prosecute an action in any court of competent
jurisdiction to enforce specific performance of this Agreement or seek any
injunction or other equitable relief, and Artzer hereby waives the defense that
Envirocon has adequate remedy at law.
19. Entire Agreement. This Agreement (and any attached exhibits) contains
the entire agreement and understanding of the parties with respect to the entire
subject matter hereof, and there are no representations, inducements, promises
or agreements, oral or otherwise, not embodied herein. Any and all prior
discussions, negotiations, commitments and understandings relating thereto are
merged herein. There are no conditions precedent to the effectiveness of this
Agreement other than as stated herein, and there are no related collateral
agreements existing between the parties that are not referenced herein.
<PAGE>
20. Expenses. Subject to the Indemnification provisions above, all costs
and expenses incurred by either party in negotiating this Agreement or in
consummating the transactions contemplated hereby, except as provided herein,
shall be paid by the party incurring such expenses.
21. Governing Law and Venue. The parties agree that this Agreement and the
transactions contemplated hereby shall be construed and enforced in accordance
with the laws of the State of Colorado, and that any action or proceeding that
may be brought arising out of, in connection with or by reason of this Agreement
shall be brought only in a court of competent jurisdiction within the city and
county of Denver, Colorado. Each of the parties hereto hereby submits,
unconditionally and irrevocably, to the jurisdiction to the aforesaid courts for
the purpose of any such lawsuits. In the event of termination of this Agreement
by mutual agreement of the parties, then Envirocon and Artzer intend that no
party would have any claim against any other party resulting from or related to
the failure to consummate the proposed transactions, and that each party would,
in any such case, pay its own costs and attorneys' fees incurred as a result.
22. Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
23. Headings. The section headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
24. Counterparts and Facsimile Signatures. This Agreement and any exhibits,
attachments, or documents ancillary hereto, may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. Execution and
delivery of this Agreement by exchange of facsimile copies bearing the facsimile
signature of a party hereto shall constitute a valid and binding execution and
delivery of this Agreement by such party. Such facsimile copies shall constitute
enforceable original documents.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
effective on the date first set forth above.
Artzer: ENVIROCON:
PAUL ARTZER ENVIROCON CORPORATION
/s/ Paul Artzer a Nevada corporation
- ---------------- By:/s/ Frank Glinton
-----------------------
Frank Glinton, President
Address: Address: 2870 Speer Boulevard, Suite 205
Denver, Colorado 80211
(303) 455-3100
EXHIBIT 10.13
JOINT VENTURE AGREEMENT BETWEEN
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL (USA)
AND
MODULAR HOMES LIMITED (INDIA)
This agreement is made this 19th day of August between (1)
Environmental Construction Products Internation (ECPI) a company incorporated in
the US & having its registered office at 2870 Speer, Suite 205, Denver, CO)
80211, USA; (2) Modular Homes Limited (MHL), a company incorporated in India and
having its registered office at 303 Shivaji Nagar, Jalgaon 425001, India
WHEREAS, this agreement has been signed for the purpose of jointly
forming ECPI (India) Limited, a Joint Venture company for the purpose of jointly
manufacturing, marketing and promoting the. ECPI Panel Technology in India and
other countries of mutual interest under license from ECPI (USA).
WHERAS, both parties will have equal ownership of ECPI (India) Limited
(50/50) and equal representation on the Board of Directors with one referee
position.
WHEREAS, MIIL is a company promoted by the Jain Group, a well known
industrial house, of repute for the past 35 years which has been engaged in
businesses of manufacturing of plastic products & irrigation systems which are
widely used in the construction, agriculture and other infrastructure industries
both in India and abroad with an annual turnover of Rs.4, 000 million.
WHEREAS, ECPI is a company manufacturing & promoting its ECON paanel
technology in the US and other countries. ECPI has recently completed a merger
with Ginsite Materials, Inc.; a NASDAQ listed company (GSIT) manufacturing epoxy
resin coating material used in the construction and marine industries.
WHEREAS, both parties arc interested in forming the Joint Venture.
which will pursue the manufacturing of panels, selection & execution of building
projects to their mutual advantage and jointly provide their respective.
capabilities andexpertise in planning, engineering, construction, manufacturing,
supply and use of the ECON panel technology as well as project management
leading to the successful completion Of file projects- ECPI (India) Limited will
start official operations on securing its first contract through a sub-contract
agreement with Khandesh Builders Limited (KBL) for construction of approximately
12,000 homes in the city of Jalgaon., India. Jalgaon Municipal Corporation is
the government organization that has awarded this contract to KBL and is
financed by HUDCO (Housing & Urban Dcvclopment Corporation), A Government of
India Undertaking.
Now therefore ECPI & MHL, through this agreement hereby rnutually agrcc
to form the Joint Venture Company under the following broad terms & conditions.
I .ECPI will provide the Technology 'Transfer, key machinery &
equipment (including duties), spare parts on key components. training, initial
supervision of Jalgaon Project, R & D, hack-up support on marketing,
international support and brand creation, engineering &manufacturing expertise,
construction expertise and any other back-up support as required for the success
of this venture.
2. MHL will be considered the "leader" in this Joint Venture due to
their local expertise in India. MHL will provide the infrastructure for setting
up factory, manpower, manufacturing of panels, procurement of raw materials,
other machinery, office equipment, permits, licenses and approvals from
government, marketing, project procurement, contract negotiations, project
execution & supervision, local engineering, civil engineering expertise local R
& D. In lieu of the above, MHL would be entitled to 5O% equity in the Venture
notwithstanding valuation of the services and facilitate to be provided by them.
<PAGE>
3. It is clearly understood that ECPI Inc., USA will have 50% share in
ECPI India Ltd. to cover the cost of supply of a complete plant and know-how
which ran undertake manufacture of Panels &. construction of houses. The Plant,
Equipment & Machinery will be completely financed by ECPI Inc. USA, if some of
the equipment are to be locally procured MHL. will assist in procuring the same.
However, the total price for all such equipment including duties & taxes will
have to be borne by ECPI Inc. USA,
4. Non Circumvent & Non Disclosure: Until the life of this Agreement
both the partners agree to maintain Confidentiality and Non Circumvention of the
Information and Interests of both the parties".. In case that the Final
Agreement does not go thru, both the parties hereby agree to return all
technical and commercial information acquired during this period to the
respective parties.
As far as Working Capital is concerned both the partners on equal basis
will provide the sarne. If any loans & advances are to be raised for Working
Capital in India the guarantees to be given to the Banking Institutions will
also be on a 50:50 basis.
'I'his Agreement together with the Enclosures are not to be used for
any other purpose except forming a legally binding Contract and/or for mutual
benefit. Till then it shall remain absolutely Confidential.
This agreement is signed in principle and will is the precursor to
amore detailed agreement outlining the following:
1. Ownership details
2. Investment outlay
3. Roles & Responsibilities
4. Management structure
5. Financial management
6. allocation of profits
7. Growth strategies
8. Termination & exit strategy
9. Resolution of disputes & Arbitration
It is mutually decided to complete the final agreement within 25 days
of signing this agreement.
Environmental Construction Modular Homes Ltd,
Products International
/s/ Frank Glinton /s/ Rajendra A. Mayur
---------------------- -------------------------
Frank Glinton Rajendra A. Mayur
President &, CEO Managing Director
<PAGE>
Agreement
For Construction of 12,000 slum houses in the City of Jalgaon between
Khandesh Builders LTD. and ECPI Group
This Agreement, made on this 30th day of September, 1999 by and between
ECPI India Ltd., a company incorporated under the laws of the government of
India, Companies Act 1956 (Incorporation is in process), its counterpart in the
United States ECPI Inc., a company registered under the USA company laws,
hereinafter referred to as the "Contractor" and M/S. Khandesh Builder Ltd., a
company incorporated under the rules of the government of India, Companies Law
1956, hereinafter referred to as the "Client"
For and in consideration of the premises, covenants and agreements of
the said Contractor and the Client, it is mutually agreed by and between the
parties as under:
i. The Client has been awarded a Contract to Construct
approximately 12,000 slum houses admeasuring approximately 215 sq. ft. built up
area, by the Local Governing Body, namely The Jalgaon Municipal Council,
hereinafter referred to as JMC.
ii. The Client is interested in Sub-Contracting the work on
aTurnkey basis to a competent Vendor.
iii. The Contractor who has access to Innovative Mass Housing
Technology namely the ECON panel technology, is keen and capable to execute the
above mentioned Slum Houses scheme.
iv. The Contractor has had the chance to study the drawings
and the rates prevalent in the local markets and based on these premises, the
Contractor believes that it can implement the job.
V. The Contractor agrees to a delivery schedule of 18 months
from the date of signing of the Work Order and the receipt of the Mobilization
Advance ( the amount for the mobilization advance would be mutually decided by
and between both the parties).
vi- The Contractor agrees to a price of 4% above the current
DSR (District Schedule Rate).
vii. The Client and the Contractor agree to work together on
the Drawings and logistics so as to arrive at a Final Agreement and issuance of
the Work Order.
viii. Representatives from the Client as well as the
Contractor would mutually determine the Payment terms and other methodologies
within 20 days of signing of this Agreement. The issues to be discussed and
resolved include the following:
a) Scope of Work
b) Rate
c) Payment Mechanism
d) Audit & Inspection Conditions
e) Arbitration Clause
f) Penalty & Incentive Clause
g) Force Majeure
h) Any other clause pertinent to this Contract
ix. The Client and the Contractor agree to work mutually
towards the successful completion of this project.
<PAGE>
X. As agreed before in the Agreement signed on August 19, 1999
the Client has had a chance to visit the facilities of ECPI in USA and see the
actual houses being constructed. The Client now is satisfied with the validity
of this technology. Hence by signing this document both parties agree to honor
this agreement as a legal and binding contract.
xi. Force Majeure: Both the Client as well as the Customer
agree on any event which is not in human control (Act of God).
This Agreement will be converted into a Contract upon finalization of
the details mentioned in Clause Viii above. However, for all practical purposes
this Agreement can be considered as an Indication to Commence work on the
above-mentioned Housing program in favor of the Contractor.
Signed on this 30th day of September 1999, by representatives of both
the parties in the presence of two witnesses
For & On Behalf of
The Client
Kandesh Builders Ltd
/s/Mr. J. N. Wani
--------------------
Managing Director
The Contractor
ECPI Inc. ECPI India Ltd.
Mr. Frank Glinton Mr. Siddharth R.Mayur
------------------- ------------------------
President Director
Witness:
1. /s/ Mr. Devang N Sheth (Director, ECPI Inc.)
--------------------------
2. /s/ Mr. Bill Jarrell (Director ECPI, Inc.)
-------------------------
EXHIBIT 99.1
IN THE CIRCUIT COURT OF THE
SEVENTEENTH JUDICIAL CIRCUIT IN AND
FOR BROWARD COUNTY, FLORIDA
CASE NO. CACE 99-17314 (07)
ENVIRONMENTAL CONSTRUCTION
PRODUCTS INTERNATIONAL, INC.
a Florida corporation
Plaintiff,
v.
MURRAY GINSBERG, HENRY
MAX and AUDREY MAX,
Defendants
ORDER
THIS CAUSE came on to be heard before this Court upon Plaintiff's Motion to
Enforce Settlement and to Cancel Shares of Stock, and the Court having heard
argument of counsel and after having reviewed same and being fully advised in
the premises, it is thereupon
ORDERED AND ADJUDGED as follows:
I . Plaintiff, ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL, INC.'s
Motion to Enforce Settlement and to Cancel Shares of Stock is
hereby granted .
2. All stock certificates and those shares referenced therein as set forth
on attached Exhibit "A" (consisting of four (4) pages) are hereby cancelled.
3. On or before noon. November 8, 1999, Defendants, MURRAY GINSBERG, HENRY
MAX and AUDREY MAX shall deliver to Plaintiff's counsel, Jeffrey A. Sarrow,
Esq., 300 South Pine Island Road, Suite 304, Plantation, FL 33324 all of the
original stock certificates issued to them prior to the date of this Order by
Ginsite Materials, Inc./ and or ENVIROMENTAL CONSTRUCTION PRODUCTS
INTERNATIONAL, INC.
4. To the extent that any original stock certificates set forth on attached
Exhibit "A" are not timely surrendered, the Defendant not surrendering such
original certificate shall provide and file a detailed explanation regarding
such party's failure and inability to deliver such stock certificate.
<PAGE>
5. To the extent that any Defendant or Ginsite Insider has transfeffed.
converted, pledged, encumbered or hypothecated any Ginsite Materials, Inc.
and/or ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL, INC. stock
certificate, such party shall, no later than November 8, 1999, provide counsel
for Phtintiff with a detailed statement describing such transaction, the date of
such transaction, identifying by name and address all parties to such
transaction.
6. This Ordcr shall be without prcjudice to any party with respect to
further or additional enforcement of the settlement agreement.
7. The parties are advised that the failure to abide by the terms and
conditions of this Order shall subject the offending party to contempt
proceedings.
DONE AND ORDERED at Broward County, Florida, this 15th day of November,
1999.
/s/ Judge John A. Miller
--------------------------------
CIRCUIT COURT JUDGE
JOHN A MILLER
Copies furnished:
Jeffrey A. Sarrow, P.A.
Marvin Pastel, Esq. A TRUE COPY
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<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1999
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