<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 2 to
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
................................................................................
SAVE THE WORLD AIR INC.
(Name of Small Business Issuer in its charter)
................................................................................
Nevada 52-2088326
------ ----------
(State of incorporation) (I.R.S. Employer Identification No.)
................................................................................
1285 Avenue of the Americas, 35th Floor
New York, NY 10019-6028
(Address of principal executive offices)
Phone 212 - 554 4197
(Issuer's telephone number)
................................................................................
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: Name of each exchange on which
each class is to be registered:
................................................................................
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
................................................................................
(Title of class)
<PAGE> 2
TABLE OF CONTENTS
-----------------
PART I
Item 1. Description of Business
Item 2. Management's Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners and Management
Item 5. Directors, Executive Officers, Promoters and Control Persons
Item 6. Executive Compensation
Item 7. Certain Relationships and Related Transactions
Item 8. Description of Securities
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
Item 2. Legal Proceedings
Item 3. Changes in or Disagreements with Accountants on
Accounting and Financial Disclosure
Item 4. Indemnification of Directors and Officers
PART F/S
Financial Statements
PART III
Item 1. Index to Exhibits
Signatures
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Mandalay Capital Corporation Inc. (the "Company") was incorporated under the
laws of the State of Nevada on February 18, 1998. An application was
approved in February, 1999, to change the name of the company to "Save The
World" Air Inc.
The Company's primary business involves
A Zero Pollution-Fuel Saving Device for motor vehicles or petrol driven engines.
ZERO POLLUTION-FUEL SAVING DEVICE
On Tuesday the 15th December, 1998 the Company announced that it had begun
negotiations to purchase the worldwide exclusive manufacturing, marketing and
distribution rights for the Zero Pollution Fuel Saving Device, an attachment
that when fitted to an internal combustion engine reduces the toxicity of
exhaust gas emissions. The device works on the inlet manifold before the harmful
gases are created and an improvement in fuel economy for the engine may also be
achieved.
On Tuesday 29th December, 1998 the Company announced that it had purchased all
rights to this device and this prompted the application for a name change to
"Save The World" Air Inc.
The Company's main focus has been on the implementation of a business plan with
the Zero Pollution Fuel Saving Device as it's flagship product.
While the Company is confident of the claims made in relation to the performance
of the device, there can be no assurances that this will be the case.
The Company's executive offices are located in both the United States and
Australia. The Australian address is 19-21 Garden Grove, Carrara, Queensland,
Australia 4211 and its telephone number is 011-61-7-55945556. Additionally, the
Company's principal office in the United States is located at 1285 Avenue of the
Americas, 35th Floor, New York, NY 10019-6028.
GOVERNMENT REGULATIONS
The Company's goal is to sell licenses to manufacture and market its
environmentally safe product throughout the world. As such, importation and
exportation regulations may impact its activities, to some degree. A breach of
such laws or regulations may result in the imposition of penalties, fines,
suspension or revocation of licenses. The Company is not currently involved in
any judicial or administrative proceedings and believes that it is in compliance
with all applicable regulations.
Although it is impossible to predict, with certainty, the effect that additional
importation and exportation requirements may have on future earnings and
operations, the Company is presently unaware of any future regulations that may
have a material effect on the Company's financial position, but cannot rule out
the possibility.
<PAGE> 4
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
During the period from the Company's inception in February of 1998 to December
31, 1999. The company had revenue of $125,000 from sale of Licenses.
Over the next year, the Company intends to focus on the business development and
marketing of its Zero Pollution Fuel Saving Device. In addition, the Company
will endeavour to seek opportunities to acquire and develop other ecologically
sound technologies that meet its requirements.
ITEM 3. DESCRIPTION OF PROPERTY
The Zero Pollution Fuel Saving Device is a product which is fitted to an
internal combustion engine and results in a reduction of carbon monoxide,
hydrocarbons and toxic exhaust emissions. The device works on the inlet manifold
before the harmful gases are created and may also improve fuel economy.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables contain information, as of December 31, 1999, of all
holders who, to the knowledge of the Company, were the beneficial owners of five
percent (5%) or more of the outstanding shares of the Common Stock of the
Company and of all Directors and Officers.
5% SHAREHOLDERS' LIST
Persons or entities owning more than 5% of the outstanding shares of the company
are : Jeffrey A. Muller
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Set forth below are the names and ages of and the positions and offices held by
each of the Directors and Executive Officers of the Company.
Positions and Officer
---------------------
Name Age With The Company
---- --- ----------------
Jeffrey A. Muller 48 Director; President
*Jeffrey A. Muller, the Company's founder, is a Director of the Company and also
serves as its President. In addition to Mr. Muller's involvement with the
Company, Mr. Muller also serves as Chairman of several companies in the Muller
Group in Australia. Mr. Muller has been the co-owner and managing director of
several private real estate investment companies, since 1984.
<PAGE> 5
EMPLOYEES
The Company has no employees (only expert consultants).
ITEM 6. EXECUTIVE COMPENSATION
There has been Nil compensation paid to date to Company's Directors and
Executive Officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
100 % of the marketing and manufacturing rights for the Zero Pollution Fuel
Saving Device was acquired from Mr. Jeffrey Muller on 29th December, 1998 for
5,000,000 shares and $500,000 cash(yet to be paid).
The forgoing transactions between the Company and the members of management are,
and any future transactions will be, on terms no less favorable to the Company
than which could be obtained from unaffiliated third parties. In addition, any
future transactions entered into between the Company and members of management
or principal shareholders regarding such transactions are to be approved by the
Board of Directors.
ITEM 8. DESCRIPTION OF SECURITIES
The following description is qualified in all respects by reference to the
Company's Certificate of Incorporation and all amendments thereto and the
Company's By laws, copies of which are attached hereto as exhibits.
The Company's Certificate of Incorporation, as amended, currently authorizes
200,000,000 shares of Common Stock, $.001 par value. As of September 30, 1999,
15,297,125 shares of the Company's Common Stock were issued and are outstanding.
DIVIDENDS. The Company has not declared any dividends since its inception.
Because the Company intends to retain future earnings to fund the development
and growth of its business it does not anticipate paying cash dividends on the
Common Stock in its foreseeable future. Any payment of dividends in the future
is at the sole discretion of the Board of Directors of the Company. The
Company's decision will be dependent upon the Company's financial condition,
results of operations and other factors the Board deems relevant.
VOTING RIGHTS. Holders of shares of Common Stock will vote as a single class
together on all matters submitted to a vote of stockholders, with each share of
Common Stock entitled to one vote, except as otherwise provided by law.
PREEMPTIVE RIGHTS. The holders of Common Stock are not entitled to preemptive or
subscription rights.
TRANSFER AGENT
The transfer agent for the shares of Common Stock of the Company is Nevada
Agency and Trust Company The address of the transfer agent is 50 West Liberty
Street, Reno, Nevada. 89501.
<PAGE> 6
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company is authorized to issue 200,000,000 shares of Common Stock at $.001
par value per share, of which 15,297,125 shares of Common Stock were issued and
outstanding as of September 30, 1999.
ITEM 2. LEGAL PROCEEDINGS
There are currently no material pending legal proceedings as defined in Item 103
of Regulation S-B.
ITEM 3. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on accounting
and financial disclosure.
ITEM 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the General Corporation Law of the State of Nevada contains
provisions entitling directors and officers of the Company to indemnification
from judgments, fines, amounts paid in settlement, and reasonable expenses,
including attorney's fees, as the result of an action or proceeding in which
they may be involved by reason of being or having been a director or officer of
the Company, provided such officers or directors acted in good faith. There is
provision in the by laws or the Certificate of Incorporation of the Company
for indemnification of Officers and Directors.
<PAGE> 7
PART F/S
For information regarding this item, reference is made to the "Index of
Financial Statements."
Index of Financial Statements
<PAGE>
PART III
Item 1. Index to Exhibits
For information regarding this item, reference is made to the "Index of
Exhibits."
Index of Exhibits
Exhibit Description
Articles of Incorporation
By-Laws
December 1998 Agreement with Mr. Jeffrey A. Muller for 100%
ownership of the international marketing and manufacturing
rights for the Zero Pollution Fuel Saving Device
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAVE THE WORLD AIR, INC.
(REGISTRANT)
Signature Title Date
/s/ Jeffrey A. Muller Chairman and President January 26, 2000
- ---------------------------
(Jeffrey A. Muller)
<PAGE>
<PAGE>
HBG Logo
HOIBERG BUSINESS GROUP
ACCOUNTANTS & ADVISERS
Tel. +61 07 5443 7600
Fax. +61 07 5443 2435
Email. [email protected]
Web. www.HBG.com.au
INDEPENDENT AUDITORS REPORT
The Board of Directors
Save the World Air, Inc.
Suite 3660 120 Broadway
New York
NEW YORK 10271
We have audited the accompanying balance sheet of Save The World Air, Inc. as at
December 31, 1999 and the related statements of operations, stockholder's
equity and cash flows for the period January 1, 1999 to December 31, 1999.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Save The World Air, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
period January 1, 1999 to December 31, 1999, in conformity with generally
accepted principles.
/s/ Kevin Hoiberg
..........................................
AUDITOR
January 16, 2000
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
BALANCE SHEET
AS AT DECEMBER 31, 1999
<CAPTION>
Dec 31, 1999 Dec 31, 1998
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS
Bank 595 38
Deposit 0 0
Prepaid Expenses 0 1,000
---------------- ----------------
595 1,038
Marketing and Manufacturing Rights to
Zero Pollution Fuel Saving Device 5,000
MINERAL PROPERTY 0 1,955
---------------- ----------------
$ 5,595 $ 2,993
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued charges 36,200
STOCKHOLDERS EQUITY
- -------------------
Common stock 200,000,000 shares authorised
at $0.001 par value 15,297,125 issued
and outstanding 15,297 10,030
Capital in excess of par 14,270 14,270
Deficit accumulated from inception -23,972 -21,307
---------------- ----------------
$ 5,595 $ 2,993
================ ================
Related Party Transactions
Approved by the board:
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1999
<CAPTION>
Dec 31, 1999 Dec 31, 1998
<S> <C> <C>
INCOME
Sale of Licences for Distributorships 125,000 0
================ ================
GENERAL AND ADMINISTRATIVE EXPENSES:
Accounting and auditing 1,400
Bank charges 144 73
Consulting 3,867 1,000
Delivery 20
Fax 47
Filing fees 3,109
Geology report 1,196
Incorporation costs written off 640
Mineral Claims written off 1,955
Miscellaneous 127
Photocopying 115
Printing 1,053 1,250
Professional Fees 62,500
Secretarial Fees 11,164 11,441
Transfer agent's fees 200
Travel 46,982 689
---------------- ----------------
TOTAL COSTS 127,665 21,307
---------------- ----------------
LOSS AND DEFICIT, END OF PERIOD $ (2,665) $ (21,307)
================ ================
LOSS PER COMMON SHARE
Primary 0 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SAVE THE WORLD AIR, INC.
STATEMENT OF CASH FLOWS
JANUARY 1 1999 TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Dec 31, 1999 Dec 31, 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cashflow Arising from Trading Activities -2,665 -21,307
Adjustments to reconcile net loss to net cash provided
by operating activities:
Write off of Mineral Claims 1,955
Consultancy paid in shares 267
(Increase) in prepaid expenses -1,000
---------------- ----------------
Net Cash Provided by Operations -443 -22,307
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of mineral property -1,955
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock 24,030
---------------- ----------------
Net increase in cash -443 -232
Cash at beginning of period 38 270
---------------- ----------------
CASH AT END OF PERIOD $ (405) $ 38
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FEBRUARY 18, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1999
<CAPTION>
Capital in
Common Stock Excess of Accumulated
Shares Par Value Deficit
<S> <C> <C> <C>
BALANCE FEBRUARY 18, 1998
(date of inception)
Issuance of Common Stock for
cash - at $0.015 - March 3, 1998 4,000,000 2,000 0
Issuance of common stock for
cash - at $0.003 - March 5, 1998 6,000,000 12,000 0
Issuance of common stock for
cash - at $0.01 per share 30,000 270
Issuance of common stock for
services rendered at $0.001 per share 267,125
Issuance of common stock for
exchange of marketing rights 5,000,000
Net Loss from operations for the
period from February 18 1998
to December 31, 1999 0 0 -23,972
---------------------------------------------------------
Balance as at December 31, 1999 $ 15,297,125 $ 14,270 $ (23,972)
=========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
[Hoiberg & Co.
Logo Here]
CHARTERED ACCOUNTANTS
BUSINESS ADVISORS
Suite 19, First Floor, Plaza Home Centre, 27 Evans Street
P.O. Box 701 Maroochydore Q 4558
Tel: 61 07 5443 7600
Fax: 07 5443 2435
Email:[email protected]
INDEPENDENT AUDITORS REPORT
The Board of Directors
Save the World Air, Inc.
1285 Ave of the Americas, 35th Flr,
New York
NEW YORK 10019-6028
We have audited the accompanying balance sheet of Save The World Air, Inc. as at
September 30, 1999 and the related statements of operations, stockholder's
equity and cash flows for the period January 1, 1999 to September 30, 1999.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Save The World Air, Inc. as of
September 30, 1999 and the results of its operations and its cash flows for the
period January 1, 1999 to September 30, 1999, in conformity with generally
accepted principles.
/s/ Hoiberg & Co
..........................................
AUDITOR
November 18, 1999
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
BALANCE SHEET
AS AT 30 SEPTEMBER 1999
<CAPTION>
Sept 30 , 1999 Dec 31, 1998
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS
Bank 595 38
Deposit 0 0
Prepaid Expenses 0 1,000
--------------- ---------------
595 1,038
Marketing and Manufacturing Rights to
Zero Pollution Fuel Saving Device 5,000
MINERAL PROPERTY 0 1,955
--------------- ---------------
5,595 2,993
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued charges 36,200
STOCKHOLDERS EQUITY
- -------------------
Common stock
200,000,000 shares authorised at $0.001 par value
15,297,125 issued and outstanding 15,297 10,030
Capital in excess of par 14,270 14,270
Deficit accumulated from inception -23,972 -21,307
--------------- ---------------
5,595 2,993
=============== ===============
Related Party Transactions
Approved by the board:
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED 30 SEPTEMBER 1999
<CAPTION>
Sept 30, 1999 Dec 31, 1998
INCOME
<S> <C> <C>
Sale of Licences for Distributorships 125,000 0
=============== ===============
GENERAL AND ADMINISTRATIVE EXPENSES:
Accounting and auditing 1,400
Bank charges 144 73
Consulting 3,867 1,000
Delivery 20
Fax 47
Filing fees 3,109
Geology report 1,196
Incorporation costs written off 640
Mineral Claims written off 1,955
Miscellaneous 127
Photocopying 115
Printing 1,053 1,250
Professional Fees 62,500
Secretarial Fees 11,164 11,441
Transfer agent's fees 200
Travel 46,982 689
--------------- ---------------
TOTAL COSTS 127,665 21,307
--------------- ---------------
LOSS AND DEFICIT, END OF PERIOD (2,665) (21,307)
=============== ===============
LOSS PER COMMON SHARE
Primary 0 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
STATEMENT OF CASH FLOWS
JANUARY 1 1999 TO 30 SEPTEMBER 1999
<CAPTION>
Sept 30, 1999 Dec 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Cashflow Arising from Trading Activities -2,665 -21,307
Adjustments to reconcile net loss to net cash provided
by operating activities:
Write off of Mineral Claims 1,955
Consultancy paid in shares 267
(Increase) in prepaid expenses -1,000
--------------- ---------------
Net Cash Provided by Operations -443 -22,307
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of mineral property -1,955
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock 24,030
--------------- ---------------
Net increase in cash -443 -232
Cash at beginning of period 38 270
--------------- ---------------
CASH AT END OF PERIOD (405) 38
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
SAVE THE WORLD AIR, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FEBRUARY 18, 1998 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
<CAPTION>
Capital in
Common Stock Excess of Accumulated
Shares Par Value Deficit
<S> <C> <C> <C>
BALANCE FEBRUARY 18, 1998
(date of inception)
Issuance of Common Stock for
cash - at $0.015 - March 3, 1998 4,000,000 2,000 0
Issuance of common stock for
cash - at $0.003 - March 5, 1998 6,000,000 12,000 0
Issuance of common stock for
cash - at $0.01 per share 30,000 270
Issuance of common stock for
services rendered at $0.001 per share 267,125
Issuance of common stock for
exchange of marketing rights 5,000,000
Net Loss from operations for the
period from February 18 1998
to June 30, 1999 0 0 (23,972)
-----------------------------------------------------------
Balance as at June 30, 1999 15,297,125 14,270 (23,972)
===========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SAVE THE WORLD AIR, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31 1999
1. DESCRIPTION OF THE BUSINESS
The Company was incorporated under the Corporate Charter issued by the
Secretary of State of Nevada in the United States on February 18, 1998.
The Company is deemed to be an investment company. The company holds
the rights to manufacture and market a device that decreases the carbon
dioxide output on internal combustion engines.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with
accounting principles generally accepted and include the following
accounting principles.
(a) BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realisation of assets and
satisfaction of liabilities in the normal course of business. The
company has been engaged in the identification and development of its
zero pollution device. The Company's ability to meet its obligations
and successfully develop its project and, ultimately, to attain
profitable operations is dependent upon further developing and
marketing the device known as Zero Pollution and obtaining additional
financing from either third parties or its present shareholders.
(b) ACCOUNTING METHODS
The Company recognises income and expenses based on the accrual method
of accounting.
<PAGE>
SAVE THE WORLD AIR, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31 1999
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(c) DIVIDEND POLICY
The Company has not yet adopted any policy regarding the payment of
dividends.
(d) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments purchased with a
maturity, at the time of purchase, of less than three months, to be
cash equivalents.
(e) LOSS PER SHARE
Primary loss per share amount is computed based on the weighted average
number of shares actually outstanding during the period reported on.
Fully diluted loss per share is computed under the same basis since
there are not warrants or share subscriptions outstanding.
(f) INCOME TAXES
For the period ended December 31 1999 (the date of these financial
statements), the Company had a net operating loss of $23,972. The tax
<PAGE>
SAVE THE WORLD AIR, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
(f) INCOME TAXES - CONTINUED
benefits from the loss carried forward is offset by a valuation reserve
because the future tax benefit is indeterminable.
The net operating loss carryover will expire beginning in the year 1999
through 2013.
(g) FOREIGN CURRENCY TRANSLATION
The translations of the Company completed in foreign dollars have been
translated to US dollars. Assets and liabilities are translated at the
year end exchange rates and the income and expenses at the average
rates of exchange prevailing during the period reported on. Any gains
or loss resulting from the translations would be shown in the Statement
of Operations.
(h) FINANCIAL INSTRUMENTS
For cash, deposit and accounts payable and accrued liabilities, the
carrying amount of these financial instruments approximates their fair
value due to their short-term maturity capacity of prompt liquidation
or settlement. The account payable does not bear any interest thereon.
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 18 1999
C3325-98
/S/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
MANDALAY CAPITAL CORP.
*****
The undersigned, acting as incorporator, pursuant to the provisions of
the laws of the State of Nevada relating to private corporations, hereby adopts
the following Articles of Incorporation:
ARTICLE ONE. [NAME] . The name of the corporation is:
MANDALAY CAPITAL CORP.
ARTICLE TWO. [RESIDENT AGENT]. The initial agent for service of process
is Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, City of
Reno, County of Washoe, State of Nevada 89501.
ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is
organized are to engage n any activity or business not in conflict with the laws
of the State of Nevada or of the United States of America, and without limiting
the generality of the foregoing, specifically:
I. [OMNIBUS] To Have to exercise all the powers now or
hereafter conferred by the laws of the State of Nevada upon
corporations organized pursuant to the laws under which the corporation
is organized and any and all acts amendatory thereof and supplemental
thereto.
II. [CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and carry
on its business or any branch thereof in any state or territory of the
United States or in any foreign country in conformity with the laws of
such state, territory, or foreign country, and to have and maintain in
any state, territory, or foreign country a business office, plant,
store or other facility.
III. [PURPOSES TO BE CONSTRUED AS POWERS]. The purposes
specified herein shall be construed both as purposes arid powers and
shall be in no wise limited or restricted by reference to, or inference
from, the terms
<PAGE>
of any other clause in this or any other article, but the purposes and
powers specified in each of the clauses herein shall be regarded as
independent purposes and powers, and the enumeration of specific
purposes and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or of the general powers of the
corporation; nor shall the expression of one thing be deemed to exclude
another, although it be of like nature not expressed.
ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have
authority to issue an aggregate of TWO HUNDRED MILLION (200,000,000)
Common Capital Shares, PAR VALUE ONE MILL ($0.001) per share for a
total capitalization of TWO HUNDRED THOUSAND DOLLARS $200,000).
The holders of shares of capital stock of the corporation
shall not be entitled to pre-emptive or preferential rights to
subscribe to any unissued stock or any other securities which the
corporation may now or hereafter be authorized to issue.
The corporation's capital stock may be issued and sold from
time to time for such consideration as may be fixed by the Board of
Directors, provided that the consideration so fixed is not less than
par value.
The stockholders shall not possess cumulative voting rights at
all shareholders meetings called for the purpose of electing a Board of
Directors.
ARTICLE FIVE. [DIRECTORS]. The affairs of the corporation
shall be governed by a Board of Directors of no more than eight (8) nor
less than one (1) person. The names and addresses of the first Board of
Directors are:
NAME ADDRESS
---- -------
Edward Skoda Suite 101, 1763 Nelson Street
Vancouver, B.C. V6G 1M6
Canada
Del Thachuk 1840 - 140 A Street
Surrey, B.C. V4A 6S2
Canada
Michael Wolf Suite 2101, 1238 Melville Street
Vancouver, B.C. V3R 3L1
Canada
2
<PAGE>
ARTICLE SIX. [ASSESSMENT OF STOCK] The capital stock of the
corporation, after the amount of the subscription price or par value
has been paid in, shall not be subject to pay debts of the corporation,
and no paid up stock and no stock issued as fully paid up shall ever be
assessable or assessed.
ARTICLE SEVEN. [INCORPORATOR]. The name and address of the
incorporator of the corporation is as follows:
NAME ADDRESS
---- -------
Amanda Cardinalli 50 West Liberty Street, Suite 880
Reno, Nevada 89501
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence
of the corporation shall be perpetual.
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the
corporation shall be adopted by its Board of Directors. The power to
alter, amend, or repeal the By-laws, or to adopt new By-laws, shall be
vested in the Board of Directors, except as otherwise may be
specifically provided in the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of
stockholders shall be held at such place within or without the State of
Nevada as may be provided by the By-laws of the corporation. Special
meetings of the stockholders may be called by the President or any
other executive officer of the corporation, the Board of Directors, or
any member thereof, or by the record holder or holders of at least ten
percent (10%) of all shares entitled to vote at the meeting. Any action
otherwise required to be taken at a meeting of the stockholders, except
election of directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
stockholders having at least a majority of the voting power.
ARTICLE ELEVEN. [CONTRACTS OF CORPORATION]. No contract or
other transaction between the corporation and any other corporation,
whether or not a majority of the shares of the capital stock of such
other corporation is own by this corporation, and no act of this
corporation shall in any way be affected or invalidated by the fact
that any of the directors of this corporation are pecuniarily or
otherwise interested in, or are directors or officers of such other
corporation. Any director of this corporation, individually, or any
firm of which such director may be a member, may be a party to, or may
be pecuniarily or otherwise interested in any contract or transaction
of the corporation; provided, however, that the fact that he or such
firm
3
<PAGE>
is so interested shall be disclosed or shall have been known to the
Board of Directors of this corporation, or a majority thereof; and
any director of this corporation who is also a director or officer
of such other corporation, or who is so interested, may be counted
in determining the existence of a quorum at any meeting of the Board
of Directors of this corporation that shall authorize such contract
or transaction, and may vote thereat to authorize such contract or
transaction, with like force and effect as if he were not such
director or officer of such other corporation or not so interested.
ARTICLE TWELVE. [LIABILITY OF DIRECTORS AND OFFICERS]. No
director or officer shall have any personal liability to the
corporation or its stockholders for damages for breach of fiduciary
duty as a director or officer, except that this Article Twelve shall
not eliminate or limit the liability of a director or officer for (I)
acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or (ii) the payment of dividends in violation
of the Nevada Revised Statutes.
IN WITNESS WHEREOF, the undersigned incorporator has hereunto
affixed her signature at Reno, Nevada this 17th of February, 1998.
/s/ Amanda Cardinalli
-----------------------------
AMANDA CARDINALLI
STATE OF NEVADA }
: ss.
COUNTY OF WASHOE }
On the 17th day of February, 1998, before me, the undersigned,
a Notary Public in and or the State of Nevada, personally appeared
AMANDA CARDINALLI, known to me to be the person described in and who
executed the foregoing instrument, and who acknowledged to me that she
executed the same freely and voluntarily for the uses and purposes
therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.
/s/ Margaret A. Oliver
---------------------------------
NOTARY PUBLIC
Residing in Reno, Nevada
My Commission Expires:
October 10, 1998
MARGARET A. OLIVER
Notary Public stamp
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 11 1999
No. C3325-98
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
MANDALAY CAPITAL CORP.
The undersigned, Jeffrey A. Muller, President, and Steven White,
Assistant Secretary of Mandalay Capital Corp., a Nevada corporation (the
"Corporation"), does hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 3rd day of February, 1999, adopted a resolution to amend
the original articles as follows:
RESOLVED, ARTICLE ONE is hereby amended to read as follows:
"The name of this corporation is:
SAVE THE WORLD AIR, INC."
The number of shares of the corporation outstanding and entitled to
vote or an amendment to the Articles of Incorporation is 10,030,000; that the
said charter and amendment have been consented to and approved by a majority
vote of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Jeffrey A. Muller
-----------------------------
Jeffrey A. Muller, President
/s/ Steven White
-----------------------------
Steven White, Assistant Secretary
State of New York
County of New York
February 3, 1999, personally appeared before me, a Notary Public,
Jeffrey A. Muller and Steven White, who acknowledged that they executed the
above instrument.
/s/ William S. Rosenstadt
------------------------------
(Signature of Notary)
William S. Rosenstadt notary stamp here
STATE OF NEVADA
Secretary of State
I hereby certify that this is a
true and complete copy of
the document as filed in this
office.
FEB 12 '99
/s/ Dean Heller
DEAN HELLER
Secretary of State
By: D. Farmer
BY LAWS
OF
MANDALAY CAPITAL CORP.
A Nevada Corporation
ARTICLE 1
---------
OFFICES
SECTION 1. The registered office of this corporation shall be in the City of
Reno, State of Nevada.
SECTION 2. The Corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from time
to time determine or the business of the corporation may require
ARTICLE 2
---------
MEETINGS OF STOCKHOLDERS
SECTION 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or without
the State of Nevada as the Directors shall determine. Special meetings of the
stockholders may be held at such time and place within or without the State of
Nevada as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
SECTION 2. Annual meetings of the stockholders shall be held on the anniversary
date of incorporation each year if not a legal holiday and, and if a legal
holiday, then on the next secular day following, or at such other time as may be
set by the Board of Directors from time to time, at which the stockholders shall
elect by vote a Board of Directors and transact such other business as may
properly be brought before the meeting.
SECTION 3. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation, may
be called by the President or the Secretary, by resolution of the Board of
Directors or at the request in writing of stockholders owning a majority in
amount of the entire, capital stock of the corporation issued and outstanding
and entitled to vote. Such request shall state the purpose of the proposed
meeting.
SECTION 4. Notices of meetings shall be in writing and signed by the President
or Vice-President or the Secretary or an Assistant Secretary or by such other
person or persons as the Directors shall designate. Such notice shall state the
purpose or purposes for which the meeting is called and the time and the place,
which may be within or without this State, where it is to be held. A copy of
such notice shall be either delivered personally to or shall be mailed, postage
prepaid, to each stockholder of record entitled to vote at such meeting not less
than ten nor more than sixty days before such meeting. If mailed, it shall be
directed to a stockholder at his address as it appears upon the records of the
corporation and upon such mailing of any such notice, the service thereof shall
be complete and the time of the notice shall begin to run from the date upon
which such notice is deposited in the mail for transmission to such stockholder.
Personal delivery of any such notice to an officer of the corporation or
association, or to any member of a partnership shall constitute delivery of such
notice to such corporation, association or partnership in the event of the
transfer of stock after delivery of such notice of and prior to the holding of
the meeting, it shall not be necessary to deliver or mail such notice of the
meeting to the transferee.
SECTION 5. Business transactions at any special meeting of stockholders shall be
limited to the purpose stated in to notice.
SECTION 6. The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Articles of
Incorporation. if, however, such
<PAGE>
-2-
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcements at the meeting, until a quorum shall be presented or
represented. At such adjourned meetings at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 7. When a quorum is present or represented at any meeting, the vote of
the holders of 10% of the stock having voting power present in person or
represented by proxy shall be sufficient to elect Directors or to decide any
question brought before such meeting, unless the question is one upon which by
express provision of the statute or of the Articles of Incorporation, a
different vote shall govern and control the decision of such question.
SECTION 8. Each stockholder of record of the corporation shall be entitled at
each electing of the stockholders to one vote for each share standing in his
name on the books of the corporation. Upon the demand of any stockholder, the
vote for Directors and the vote upon any question before the meeting shall be by
ballot.
SECTION 9. At any meeting of the stockholders any stockholder may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all the powers
conferred by such written instruction upon all of the persons so designated
unless the instrument shall otherwise provide. No proxy or power of attorney to
vote shall be voted at a meeting of the stockholders unless it shall have been
filed with the Secretary of the meeting when required by the inspectors of
election. All questions regarding the qualifications of voters, the validity of
proxies and the acceptance of or rejection of votes shall be decided by the
inspectors of election who shall be appointed by the Board of Directors, or if
not so appointed, then by the presiding officer at the meeting.
SECTION 10. Any action which may be taken by the vote of the stockholders at a
meeting may be taken without a meeting if authorized by the written consent of
stockholders holding at least a majority of the voting power, unless the
provisions of the statute or the Articles of Incorporation require a greater
proportion of voting power to authorize such action in which case such greater
proportion of written consents shall be required.
ARTICLE 3
---------
DIRECTORS
SECTION 1. The business of the corporation shall be managed by its Board of
Directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these Bylaws directed or required to be exercised or done by the
stockholders.
SECTION 2. The number of Directors which shall constitute the whole board shall
be not less than one and not more than eight. The number of Directors may foal
time to time be increased or decreased to not less than one nor more than eight
by action of the Board of Directors. The Directors shall be elected at the
annual meeting of the stockholders and except as provided in section 2 of this
Article, each Director elected shall hold office until his successor is elected
and qualified. Directors need not be stockholders.
SECTION 3. Vacancies in the Board of Directors including those caused by an
increase in the number of Directors, may be filed by a majority of the remaining
Directors, though less than a quorum, or by a sole remaining Director, and each
Director so elected shall hold office until his successor is elected at the
annual or a special meeting of the stockholders. The holders of a two-thirds of
the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the Directors by vote at a meeting
called for such purpose or by a written statement filed with the Secretary or,
in his absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the vacancies
on the Board of Directors resulting therefrom shall only be filled from the
stockholders.
A vacancy or vacancies on the Board of Directors shall be deemed to
exist in ease of death, resignation or removal of any Director, or if the
authorized number of Directors be increased, or if the stockholders fail at any
annual or special meeting of stockholders at which any Director or Directors are
elected to elect the full authorized number of Directors to be voted for at that
meeting.
<PAGE>
-3-
The stockholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors. If the Board of Directors
accepts the resignation of a Director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director prior to the expiration of his term of office.
ARTICLE 4
---------
MEETING OF THE BOARD OF DIRECTORS
SECTION 1. Regular meetings of the Board of Directors shall be held at any place
within or without the State which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation regular meetings shall be held at the registered
office of the corporation. Special meetings of the Board may he held either at a
place so designated or at the registered office.
SECTION 2. The first meeting of each newly elected Board of Directors shall be
held immediately following the adjournment of the meeting of stockholders and at
the place thereof. No notice of such meeting shall be necessary to the Directors
in order legally to constitute the meeting, provided a quorum be present. In the
event such meeting is not so held, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors.
SECTION 3. Regular meetings of the Board of Directors may be held without call
or notice at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
SECTION 4. Special meetings of the Board of Directors may be called by the
Chairman or the President or by the vice-President or by any two Directors.
Written notice of the time and place of special meetings shall be
delivered personally to each Director, or sent to each Director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it is shown upon the records or if not readily ascertainable, at the
place in which the meetings of the Directors are regularly held. In case such
notice is mailed or telegraphed, it shall be deposited in the postal service or
delivered to the telegraph company at least forty-eight (48) hours prior to the
time of the holding of the meeting. In case such notice is delivered or faxed,
it shall be so delivered or faxed at least twenty-low (24) hours prior to the
time of the holding of the meeting, Such mailing, telegraphing, delivery or
faxing as above provided shall be due, legal and personal notice of such
Director.
SECTION 5. Notice of the time and place of holding an adjourned meeting need not
be given to the absent Directors if the time and place be fixed at the meeting
adjourned.
SECTION 6. The transaction of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though transacted at a
meeting duly held after regular call and notice, if a quorum be present, and if,
either before or after such meeting, each of the Directors not present signs a
written waiver of notice, or a consent of holding such meeting, or approvals of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting,
SECTION 7. The majority of the authorized number of Directors shall be necessary
to constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
Directors present at a meeting duly held at which a quorum is present shall he
regarded as the act of the Board of Directors, unless a greater number be
required by law or by the Articles of Incorporation. Any action of a majority,
although not at a regularly called meeting, and the record thereof, if assented
to in writing by all of the other members of the Board shall be as valid and
effective in all respects as if passed by the Board in regular meeting.
<PAGE>
-4-
SECTION 8. A quorum of the Directors may adjourn any Directors meeting to meet
again at stated day and hour; provided, however, that in the absence of a
quorum, a majority of the Directors present at any Directors meeting, either
regular or special, may adjourn from time to time until the time fixed for the
next regular meeting of the Board.
ARTICLE 5
---------
COMMITTEES OF DIRECTORS
SECTION 1. The Board of Directors may, by resolution adopted by a majority of
the whole Board, designate one or more committees of the Board of Directors,
each committee to consist of two or more of the Directors of the corporation
which, to the extent provided in the resolution, shall and may exercise the
power of the Board of Directors in the management of the business and affairs of
the corporation and may have power to authorize the seal of the corporation to
be affixed to all papers which may requite it. Such committee or committees
shall have such name or names as may be determined from time to time by the
Board of Directors. The members of any such committee present at any meeting and
not disqualified from voting may, whether or not they constitute a quorum.
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. At meetings of such
committees, a majority of the members or alternate members at any meeting at
which there is a quorum shall be the act of the committee.
SECTION 2. The committee shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
SECTION 3. Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if
a written consent thereto is signed by all members of the Board of Directors or
of such committee, as the case may be, and such written consent is tiled with
the minutes of proceedings of the Board or committee.
ARTICLE 6
---------
COMPENSATION OF DIRECTORS
SECTION 1. The Directors may be paid their expenses of attendance at each
meeting of the Board of Directors and maybe paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the corporation from any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like reimbursement and compensation for attending
committee meetings.
ARTICLE 7
---------
NOTICES
SECTION 1. Notices to Directors and stockholders shall be in writing and
delivered personally or mailed to the Directors or stockholders at their
addresses appearing on the books of the corporation. Notices to Directors may
also be given by fax and by telegram. Notice by mail, fax or telegram shall be
deemed to be given at the time when the same shall be mailed.
SECTION 2. Whenever all parties entitled to vote at any meeting, whether of
Directors or stockholders, consent either by a writing on the records of the
meeting or filed with the Secretary, or by presence at such meeting or oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had at a meeting regularly called and noticed, and at such meeting any business
may be transacted which is not excepted from the written consent to the
consideration of which no objection for want of notice is made at the time, and
if any meeting be irregular for want of notice or such consent, provided a
quorum was present at such meeting, the proceedings 0f said meeting may be
ratified and approved and tendered likewise valid and the irregularity or defect
therein waived by a writing signed by all parties having the right to vote at
such meeting; and such consent or approval of stockholders may be by proxy or
attorney, but all such proxies and powers of attorney must be in writing.
<PAGE>
-5-
SECTION 3. Whenever any notice whatever is required to be given tinder the
provisions of the statute, of the Articles of Incorporation or of these Bylaws,
a waiver thereof in writing, signed by the person or persons entitled to said
notice. whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE 8
---------
OFFICERS
SECTION 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. Any person may
hold two or more offices.
SECTION 2. The Board of Directors at its first meeting after each annual meeting
of stockholders shall choose a Chairman of the Board who shall be a Director,
and shall choose a President, a Secretary and a Treasurer, none of whom need be
Directors.
SECTION 3. The Board of Directors may appoint a Vice-Chairman of the Board,
Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers
and such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 4. The salaries and compensation of all officers of the corporation
shall be fixed by the Board of Directors.
SECTION 5. The officers of the corporation shall hold office at the pleasure of
the Board of Directors. Any officer elected or appointed by the Board of
Directors may be removed any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the Board of Directors.
SECTION 6. The CHAIRMAN OF THE BOARD shall preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
SECTION 7. The VICE-CHAIRMAN shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of the
Board and shall perform other such duties as the Board of Directors may from
time to time prescribe.
SECTION 8. The PRESIDENT shall be the chief executive officer of the corporation
and shall have active management of the business of the corporation. He shall
execute on behalf of the corporation all instruments requiring such execution
except to the extent the signing and execution thereof shall be expressly
designated by the Board of Directors to some other officer or agent of the
corporation.
SECTION 9. The VICE-PRESIDENTS shall act under the direction of the President.
and in absence or disability of the President shall perform the duties and
exercise the powers of the President. They shall perform such other duties and
have such other powers as the President or the Board of Directors may from time
to time prescribe. The Board of Directors may designate one or more Executive
Vice-Presidents or may otherwise specified the order of seniority of the
Vice-Presidents. The duties and powers of the President shall descend to the
Vice-Presidents in such specified order of seniority.
SECTION 10. The SECRETARY shall act under the direction of the President.
Subject to the direction of the President he shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record the
proceedings. He shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors.
SECTION 11. The ASSISTANT SECRETARIES shall act under the direction of the
President. In order of their seniority, unless otherwise determined by the
President or the Board of Directors, they shall, in the absence or
<PAGE>
-6-
disability of the Secretary, perform the duties and exercise the powers of the
Secretary. They shall perform other such duties and have such other powers as
the President and the Board of Directors may from time to time prescribe.
SECTION 12. The TREASURER shall act under the direction of the President.
Subject to the direction of the President he shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all money
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may he ordered by the President or the
Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President end the Board of Directors, at its regular meetings, or
when the Board of Directors so requires; an account of all his transactions as
Treasurer and of the financial condition of the corporation.
If required by the Board of Directors, the Treasurer shall give the
corporation a bond iii such sum mid with such surety as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
SECTION 13. The ASSISTANT TREASURERS in order of their seniority, unless
otherwise determined by the President or the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
ARTICLE 9
---------
CERTIFICATES OF STOCK
SECTION 1. Every stockholder shall he entitled to have a certificate signed by
the President or a Vice-President and the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation, if the corporation shall be
authorized to issue more than one class of stock or more that one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights, shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such stock.
SECTION 2. If a certificate is signed (a) by a transfer agent other than the
corporation or its employees or (b) by a registrar other than the corporation or
its employees, the signatures of the officers of the corporation may be
facsimiles. In case any officer who has signed or whose facsimile signatures
have been placed upon a certificate shall cease to be such officer before such
certificate is issued, such certificate may be issued with the same effect as
though the person had not ceased to be such officer. The seal of the
corporation, or a facsimile thereof, may; but need not be, affixed to
certificates of stock.
SECTION 3. The Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
SECTION 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation, if it is satisfied that all provisions of the laws and
regulations applicable to the corporation regarding transfer and ownership of~
shares have been compiled with, to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books.
<PAGE>
-7-
SECTION 5. The Board of Directors may fix in advance a date not exceeding sixty
(60) days nor less than ten (10) days preceding the date of any meeting of
stockholders, or the date of the payment of any dividend, or the date of the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining the
consent of stockholders fur any purpose, as a record date for the termination of
the stockholders entitled to notice of and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
give such consent, and in the such case, such stockholders, and only such
stockholders as shall be stockholders of record on the date so fixed, shall be
entitled to notice of and to vote as such meeting, or any adjournment thereof,
or to receive such payment of dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
such record date fixed as aforesaid.
SECTION 6. The corporation shall be entitled to recognize the person registered
on its books as the owner of the share to be the exclusive owner for all
purposes including voting and dividends, and the corporation shall not be bound
to recognize any equitable or other claims to or interest in such shares or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE 10
----------
GENERAL PROVISIONS
SECTION 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property or in shares of the capital stock, subject to
the provisions of the Articles of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends or for
repairing and maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive to the interests of the
corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
SECTION 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
SECTION 4. The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
SECTION 5. The corporation may or may not have a corporate seal, as may be from
tine to time determined by resolution of the Board of Directors. If a corporate
seal is adopted, it shall have inscribed thereon the name of the corporation and
the words "Corporate Seal" and "Nevada". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
ARTICLE 11
----------
INDEMNIFICATION
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or a
person of whom he is the legal representative is or was a Director or officer of
the corporation or is or was serving at the request of the corporation or for
its benefit as a Director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest legally permissible under the
General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorney's fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and Directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
<PAGE>
-8-
Director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such tight of indemnification shall be a contract right which may
be enforced in any manner desired. by such person. Such right of indemnification
shall not be exclusive of any other right which such Directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a Director or officer
of the corporation, or is or was serving at the request of the corporation as a
Director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may form time to time adopt further Bylaws with
respect to indemnification and amend these and such Bylaws to provide at all
times the fullest indemnification permitted by the General Corporation Law of
the State of Nevada.
ARTICLE 12
----------
AMENDMENTS
SECTION 1. The Bylaws may be amended by a majority vote of all the stock issued
and outstanding and entitled to vote at any annual or special meeting of the
stockholders, provided notice of intention to amend shall have been contained in
the notice of the meeting.
SECTION 2. The Board of Directors by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the stockholders,
but the stockholders may from time to time specify particulars of the Bylaws
which shall not be amended by the Board of Directors.
APPROVED AND ADOPTED February 19, 1998.
CERTIFICATE OF THE SECRETARY
----------------------------
I, E. Del Thachuk, hereby certify that I am the Secretary of MANDALAY CAPITAL
CORP., and the foregoing Bylaws, consisting of 8 pages, constitute the code of
Bylaws of this company as duly adopted at a regular meeting of the Board of
Directors of the corporation held on February 19, 1998.
IN WITNESS WHEREOF, I have hereunto subscribed my name on February 19, 1998.
/s/ E. Del Thachuk
- ----------------------------
Secretary
AGREEMENT
This Agreement entered into as of the 29th December 1998 by and between
Jeffrey Alan Muller ("Seller") and Save the World Air Inc. ("Buyer"), a Nevada
corporation having its principal office at 1285 Ave of the Americas New York
City is made with reference to the following facts.
A. Seller controls the ownership of certain secret know-how,
technology, methodology, prototypes, machinery and equipment relating to a ZERO
POLLUTION EMISSION DEVICE together with certain letters, and patent rights and
has adopted certain unregistered trademarks, service marks, logotypes, and trade
styles, for use therewith.
B. Buyer desires to Purchase and Seller desires to Sell to Buyer 100%
of the international marketing and manufacturing rights of Seller in and to the
Zero Pollution Emission Device.
1.0 DEFINITIONS
1.01 ZERO POLLUTION EMISSION DEVICE. The term "Zero Pollution Emission
Device" shall mean all of Seller's drawings, blueprints, sketches, diagrams,
specifications, bills of material, manufacturing cost records, cost estimates,
engineering records, engineering notes and notebooks service manuals, service
instructions, manufacturing instructions, assembly instructions, testing
instructions, operating instructions, parts lists, know-how data, technology,
methodology, prototypes, programs, models, tools, patterns, and other physical
and written descriptions and embodiments, including parts, subsystems and
subassemblies and all associated fittings for the production of a Zero Pollution
Emission Device, which Seller has tested which are possessed by Seller as of the
date hereof, together with any future improvements thereto or betterments
thereof whether made by Seller or Buyer;
1.02 MARKS. The term "Marks" shall mean all/any of Seller's trademarks,
trademark rights, service marks, trade usages, logotypes all of which are
unregistered, and all other rights including goodwill worldwide relating to, or
indicating the source or origin or, the Zero Pollution Emission Device.
1.03 NET REVENUES. The term "Net Revenues" shall mean all revenues of
any kind or nature whatsoever, whether in cash or in kind, actually received by
or applied on behalf of Buyer or any person or entity which is an Affiliate or
licensee or sublicensee of the Zero Pollution Device from Buyer, from the sale,
rental or other disposition of products oil processes utilizing the Zero
Pollution Device (including for this purpose spare or repair parts,
modifications, improvements, and attachments thereto) to any person or entity
which is not an Affiliate of Buyer, excluding, however, all interest, finance
charges, import, export or customs duties or similar sales and excise taxes,
shipping charges, packing charges, insurance or other separately related charges
relating to transportation charges paid by Buyer directly with respect to the
sale; and less (i) genuine trade discounts and quantity discounts, if any,
allowed and taken and (ii) genuine allowances or credits, if any, given to
customers on account of settlement of complaints, rejections or returns with
respect to the sale or other disposition, all as actually invoiced or billed to
customers.
1.04 AFFILIATE. The tarn "Affiliate" means any corporation or other
business entity with respect to which Seller or Buyer as the case may be,
directly or indirectly owns or controls the majority of the voting stock, or has
the right or power to designate or elect the directors or other management
personnel, or otherwise has the right or power to control its operating
management decision.
<PAGE>
2.0 SALE OF ZERO POLLUTION EMISSION DEVICE AND OTHER INTANGIBLES
2.01 SALE OF ASSETS. Subject to the terms and conditions hereunder,
Seller agrees to assign, sell, transfer, grant and convey and does hereby
assign, sell, transfer, grant and convey unto Buyer 100% of his marketing rights
throughout the world in and to the Zero Pollution Devices. Seller agrees to
promptly execute and deliver all papers and perform such other acts which are
reasonably deemed necessary or appropriate by Buyer to transfer to Buyer or
perfect in Buyer the right title and interest hereby conveyed, all of the same
being in form and substance reasonably satisfactory to the counsel for Seller
and Buyer. As the owner of the Zero Pollution Device, and any Marks, and
Copyrights, Buyer has the right to grant licenses and sub-licenses thereunder
but to protect Seller's security interest, Buyer shall provide Seller promptly
with a copy of each such licenses or sub-licenses shall be on terms consistent
with and subject to the Buyer's obligations hereunder.
2.02 RESTRICTIONS ON SELLER. The sale herein is exclusive in all
respects and Seller agrees that during the term of this Agreement, neither
Seller nor any of its officers, employees, agents or Affiliates will, except as
expressly requested by Buyer otherwise required to carry out the provisions of
this Agreement:
a. Manufacture or sell the Zero Pollution Device or related equipment, either
for its own account or on behalf of any other person or organization; or
b. Provide technical information or assistance relating to the Zero Pollution
Device to any person or organizations other than Buyer or persons authorized by
Buyer to receive such information or assistance; or
c. Assist any other organization in engaging in the design, development,
engineering, manufacture or sale of the Zero Pollution Device or related
equipment; or
d. Directly or indirectly reveal to anyone or utilize in any way the Zero
Pollution Device (i,) except as required by this Agreement or (ii) as expressly
requested by the Buyer. This provision, however, shall not apply to information
which is, or through no fault of Seller becomes publicly available.
2.03 FUTURE ASSURANCES. Subject to the limitations set forth elsewhere
in this Agreement, Seller covenants and agrees to cooperate with Buyer, and upon
request from Buyer to execute and delivery such documents and take such action
as may be reasonably requested in order to fully carry out the intent and
purpose of this Agreement.
3.0 PAYMENT OF PURCHASE PRICE
3.01 PAYMENT OF VARIABLE PURCHASE PRICE. The purchase price for all of
the marketing and manufacturing rights sold shall be an amount equal to the
total sums payable to Seller pursuant to the provisions of this Paragraph 3.01.
Subject to the terms and conditions hereof, including termination, in payment of
the purchase price for the assets being conveyed hereunder, Buyer agrees to:
a. Pay Seller an amount equal to $500,000 and $10 royalty for every unit sold;
b. Issue and transfer 5,000,000 shares of Common Stock of Buyer to Seller within
120 days of the Agreement.
<PAGE>
4.0 SELLER'S COVENANTS
4.01 MARKETING ASSISTANCE. Seller covenants and agrees is requested by
during the term of this Agreement, to reasonably assist Buyer in obtaining
license agreements with third parties, under which such third parties would be
licensed to produce devices in accordance with the Zero Pollution Device and any
Rights thereto.
4.02 PROSECUTION OF INFRINGEMENT SUITS. Buyer shall provide reasonably
prompt notice to Seller upon becoming aware of possible infringement of any
Rights by any third party. In any such event, except as provided below, buyer
shall have sole right, but not the obligation, to file and prosecute suit at its
own expense and to collect damages and other compensation, provided, however,
that Buyer shall report and make payment to Seller with respect to the amount of
any such recovery, net of all costs and expenses incurred therewith as if the
infringer were a licensee. Buyer shall provide reasonable prior notice of all
decisions with respect to any infringement actions, and an opportunity for
Seller's counsel to collaborate and advise with respect thereto. If Buyer does
not take action against any third party infringer within a reasonable time,
Seller then shall have the sole right to do so in the name of buyer, but at
Seller's own expense, and to collect damages and other compensation therefor.
5.0 SELLER'S COVENANTS
5.01 MARKETING. Promptly following the date on which payment becomes
due from Buyer's customer for the production of prototype (whether under sale or
lease) or, if the production prototype is put into use by Buyer or an Affiliate,
the date on which payment becomes due from the customer of Buyer or its
Affiliate for the Zero Pollution Device from the first commercial production run
of such machine, as the ease may be (which date is hereafter referred to as the
"Prototype Machine Acceptance Date"), Buyer agrees to engage in reasonable
marketing efforts for the purpose of creating a market for the sale, lease or
license of additional machines, and to promote and popularize the Zero Pollution
Device, including the preparation and distribution of promotional literature for
use in the promotion of sales of products utilizing the Zero Pollution Device,
the recruiting and maintenance of a sales personnel force commensurate with
Buyer's reasonable projection of the market for the Zero Pollution Device and
Net Revenues, and to continue to engage in such efforts until the termination of
this agreement, provided, however, Buyer shall be entitled to submit to Seller
promptly after the Prototype Acceptance Date and annually thereafter during the
term of this Agreement a detailed marketing plan which, if not disapproved with
specific objections by Seller within thirty (30) days, shall be deemed
satisfactory. In the event that the parties are unable to agree on the marketing
plan, the matter shall be submitted to arbitration. Buyer agrees to use
reasonable efforts to continually implement the marketing plan during the period
covered thereby and when necessary modify the same to reflect changed marketing
conditions, if any, and further agrees to keep Seller timely informed of the
nature, extent and results of all such sales and marketing efforts.
5.02 IMPROVEMENTS AND ADDITIONAL PATENTS. Buyer shall promptly disclose
to Seller all improvements to the Zero Pollution Device by Buyer and, Buyer at
its sole cost and expense, shall promptly prepare, file and prosecute
applications to register any additional applications for letters patent which
provide material protection for the Zero Pollution Device and related equipment
products and processes, as being practiced at that time or as expected by Buyer
to be practiced in the fixture in the United States and such foreign countries
as Buyer may reasonably determine are likely to have market conditions that
warrant obtaining such protection. In the event that Buyer shall fail to perform
any of its obligations under this subparagraph, Seller shall have the right to
direct or take over such activities in the name and on behalf of Buyer as Seller
in its sole discretion may reasonably determine to be in its best interests.
Thereupon, Buyer shall reimburse Seller for the reasonable expenses actually
incurred by Seller for prosecuting such applications. In the event that Buyer
decides not to appeal any final determination of the Examiner, Seller shall have
<PAGE>
the right to file and prosecute such appeal at its own expense. Seller, at its
cost and expense, shall in good faith have the right to obtain such protection
in any country in which Buyer elects not to do so, and Buyer shall cooperate
with Seller in doing so.
5.03 SECRECY AND NON-COMPETITION. During the term of this Agreement,
Buyer and its Affiliates will provide the same degree of protection for all
trade secrets communicated to Buyer by Seller and identified at that time as
"Seller Trade Secrets" as Buyer exercises with respect to its own information of
similar character and importance. Buyer shall use its best efforts to obtain
from each of its employees or agents (present or future) who will spend
substantial time working on the Zero Pollution Device and/or who will have any
trade secrets, confidential information or unpublished know-how relating to the
Zero Pollution Device and Employee Invention and Secrecy Agreement substantially
and shall include appropriate secrecy provisions in all contracts with its
customers, licensees and sublicensees of the Zero Pollution Device or parts
thereof, of which agreements Seller, as secured party hereunder, shall be a
beneficiary.
6.0 WARRANTIES
6.01 WARRANTIES BY SELLER. Seller expressly warrants and represents
Buyer that; a) Seller has the power, right and authority to enter into and
perform its obligations under this Agreement. All necessary action has been
taken to authorize the execution, delivery and performance of this Agreement.
6.02 WARRANTIES BY BUYER. Buyer represent and warrants to Seller as
follows;
a) Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, United States; b) All necessary and
corporate actions have been taken to authorize the execution, delivery and
performance of this Agreement by Buyer; and c) This Agreement when duly signed
by Seller and Buyer will be a binding obligation of buyer enforceable in
accordance with its terms.
7.0 TERMINATION.
7.01 TERMINATION FOR DEFAULT OF BUYER. This Agreement may be terminated
by Seller in the event; (a) Buyer fails to make any payment as provided under
Paragraph 3.01 hereof, provided however, Seller shall have first given written
notice to Buyer specifying such failure and Buyer shall not have cured such
failure within thirty (30) days after receipt of such notice; or (b) Buyer shall
fail to substantially and continuously satisfy its promotion and exploitation
obligations under Paragraph 3.02 after written notice to buyer specifying such
failure except on account of a material breach by Seller of a material breach by
Seller of a material warranty hereunder; or c) Buyer shall fail to perform any
other obligation under this Agreement, provided, however, Seller shall have
first given written notice to Buyer specifying such failure and Buyer shall have
not cured such failure with thirty (30) days after receipt of such notice, and
further provided, that is such failure by its nature is not readily curable
within such initial time period but Buyer has undertaken good faith efforts to
cure such failure, Buyer shall, have an additional twenty-one (21) days within
which to complete such action, provided the default may be reasonably expected
to be cured within said additional 21 Days.
7.02 MISCELLANEOUS TERMINATION BY SELLER. Seller shall have the right
to terminate the Agreement upon written notice to Buyer in the event that; (a)
Buyer files a voluntary petition under any Chapter of Bankruptcy Code or similar
insolvency law of any jurisdiction or proposes a dissolution or liquidation; OR
(b) Buyer has filed against it any petition under any Chapter of the Bankruptcy
Code or similar insolvency law of any jurisdiction, which petition is not
dismissed. It is further provided that should the provisions of subparagraphs
(a) or (b) above be invalid or unenforceable under then applicable provisions of
the Bankruptcy Code or any similar insolvency law of any jurisdiction, the
Trustee in Bankruptcy or Debtor in Possession of Buyer shall continue to have
the same rights and obligations to perform under this Agreement by such Trustee
<PAGE>
or Debtor in Possession shall have the right to terminate this Agreement on 30
days' written notice or such other reasonable period of time as may be
determined by the court then having jurisdiction over Buyer.
8.0 RIGHTS UPON TERMINATION
8.01 TERMINATION BY SELLER. In addition to any other rights it may have
in law or equity, Seller shall have the following rights upon termination of
this Agreement:
(a) In the event that Seller terminates this Agreement because Buyer
has failed to comply with the performance standards and Seller elects to
terminate this Agreement: (i) title to the Zero Pollution Device, Rights and
Copyrights, to the extent and in the form delivered by Seller to Buyer, together
with drawings of betterments, modifications and improvements to any production
prototype machine built by Buyer, will automatically be deemed to be acquired or
required by Seller upon the effective date of termination of this Agreement
without compensation being or becoming due to Buyer, (ii) Buyer, at its sole
cost and expense, shall promptly thereafter return to Seller all equipment,
machines and documents relating to the Zero Pollution Device which buyer
originally received from Seller. After such a termination, Buyer, its
affiliates, licencees and sublicensees will immediately cease and desist from
using, manufacturing and exploiting the Zero Pollution Device and Marks.
(b) In the event Buyer does not substantially and continuously satisfy
its promotion and exploitation obligations as set forth herein except on account
of a material breach by Seller of a warranty hereunder, and Seller elects to
terminate this Agreement, Seller upon the effective date of the termination of
this Agreement will be deemed to have acquired a fully paid royalty free,
world-wide license from Buyer to manufacture, use and exploit the Zero Pollution
Device, Rights, Marks and Copyrights including the right to grant sublicenses
thereunder, which shall be exclusive except as to buyer's then excluding
licensees and sublicensees, but only as applied to machines and cartons
utilizing the Zero Pollution Device sold or leased or licensed by Buyer prior to
the effective date of the termination. In all other respects the provisions of
(a) above shall he applicable.
(c) To the event that Seller terminates this Agreement on account of
the default by Buyer of any sums due and owing to Seller hereunder, or for any
other reason the provisions of (a) above shall be applicable and, in addition,
Seller, as secured creditor, shall have such other remedies as may then be
available to it under law of in equity including the exercise of its security
interest granted herein.
(d) In the event of any termination of this Agreement by Seller, Buyer
shall have the right to complete the manufacture of any devices in the process
of design, manufacture or delivery and to sell the same, provided, however, the
proceeds thereof shall be subject to the rights of Seller (i) to recover sums
then due and owing to it, and (ii) Buyer shall continue to have the obligation
to report and pay over to Seller the sums due thereon determined in accordance
with the provisions of Paragraph 3.01. Further, in the event the provisions of
subparagraphs (b) or (c) above are applicable upon Seller's termination of this
Agreement, Buyer shall have the right to continue to receive royalties under any
existing licenses or similar agreement with third parties, subject, however, to
the obligation to report and pay to Seller the sums due determined under the
provisions of Paragraph 3.01 hereof.
9.0 GENERAL LIMITATIONS.
9.01 NO AGENCY, PARTNERSHIP OR JOINT VENTURE. This Agreement does NOT
render, and nothing herein contained shall be construed to render Buyer or
Seller as an agent for the other or liable for any debts, obligations or
liabilities of the other now existing or to be incurred in the performance of
this Agreement. Nothing in this Agreement shall be deemed or construed to
constitute or create between the parties hereto, a partnership or joint venture.
<PAGE>
10.0 NOTICES.
10.01 NOTICES. Except as provided elsewhere in this Agreement, all
statements, payment and documents required or permitted by this Agreement to be
provided or given to either party shall be deemed to have been so provided or
given upon the mailing thereof postage paid by first-class mail, and all notices
required hereunder shall be deemed to have been given upon the mailing thereof
by postage paid certified mail, return receipt requested, addressed to such
party as its following address or at such other addresses and to the attention
of such other officers or individuals as it may from time to time designate in
writing to the other party:
11.0 ENTIRE AGREEMENT.
11.01 ENTIRE AGREEMENT. This Agreement shall represent the entire
agreement by and between Buyer and Seller and all previous agreements between
Buyer and Seller are hereby terminated and superseded. This Agreement shall not
be modified except by an Agreement in writing signed by both parties hereto.
12.0 MISCELLANEOUS.
12.01 ARBITRATION. In the event that the parties are unable to reach
any future agreement specifically provided for herein within 120 days of
commencement of a request for such agreement by either party, the matter shall
be finally settled by arbitration pursuant to the rules then in effect of the
American Arbitration Association. The arbitration shall take place in Australia
if commenced by Seller, or in America (U.S.A) if commenced by Buyer. Such
arbitration shall not include any issue with respect to breach of this
Agreement, specific performance, damages, injunctive relief or any equitable
relief, all of which may be resolved by an action in law or equity in a court of
appropriate jurisdiction at any time.
12.02 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable for any reason, such provision is fully separable, and shall
thereupon be separated from, the remaining provisions of this Agreement, and the
remaining provisions are nevertheless validated and enforceable as if such of
the provisions held invalid or unenforceable were not a part of this Agreement.
12.03 HEADINGS. Headings and captions of this Agreement are included
for purposes of convenient reference only and shall not be construed as
limiting, expanding or modifying in any way a text of any paragraph or section.
12.04 USE OF MARKS. Buyer shall have the non-exclusive right, but not
the obligation, to use the Marks, but the purchase price shall not be reduced if
Buyer elects not to use the Marks, or if Buyer is prevented from using the Marks
because such infringes prior rights.
12.05 WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall not
affect in any way derogate the full right to require such performance at any
time thereafter; nor shall the waiver by either party of a breach of any
provision thereof be held to be a waiver of the provision itself.
12.06 GOVERNING LAW. This Agreement shall he governed by construed in
accordance WITH the laws of Nevada.
12.07 ASSIGNMENT AND BENEFIT. Neither party shall have the right to
assign its rights or to delegate its duties hereunder without prior written
consent of the other party, but in the case of an assignment of rights or to
delegate its duties hereunder without the prior written consent of the other
party, but in the case of an assignment of rights such consent will not be
reasonably withheld. Such consent of either party shall not be required for any
such assignment by Buyer or Seller to any of its affiliates, but such an
assignment shall not relieve Seller or Buyer, as the case may be, of any of its
obligations hereunder. Subject to the above, this Agreement shall be binding
upon, and inure to the benefit of, the successors and assigns of the parties
hereto.
12.08 COUNTERPARTS. This Agreement shall be executed in duplicate with
one executed copy to be retained by Seller and the other by Buyer.
EXECUTED as a bind contract by their duly authorized officers or
representatives.
/S/ Jeffrey A. Muller
----------------------------------
Jeffrey A. Muller
BY:/S/ Jeffrey A. Muller
-------------------------------
President
SAVE THE WORLD AIR, INC.
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 595
<SECURITIES> 0
<RECEIVABLES> 0
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<CURRENT-ASSETS> 595
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<BONDS> 0
0
0
<COMMON> 15,297
<OTHER-SE> (9,702)
<TOTAL-LIABILITY-AND-EQUITY> 5,595
<SALES> 125,000
<TOTAL-REVENUES> 125,000
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