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As filed with the Securities and Exchange Commission on July 11, 1997
Registration No. 33- _________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20559
________________
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
________________
AMERICAN TECHNOLOGIES GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 95-4307525
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1017 South Mountain Avenue
Monrovia, California 91016
(Address of Principal Executive Offices)
CONSULTANT AGREEMENT
(Full Title of the Plan)
John R. Collins
Chief Executive Officer
American Technologies Group, Inc.
1017 South Mountain Avenue
Monrovia, California 91016
(818) 357-5000
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
JOHN M. DAB, ESQ.
General Counsel
American Technologies Group, Inc.
1017 South Mountain Avenue
Monrovia, California 91016
(818) 357-5000
Telecopy: (818) 357-4464
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities to Amount to Price Offering Registration
be Registered be per Price(1) Fee
Registered Share(1)
- ---------------------- ---------- -------- --------- --------------
Common Stock, $.001 56,667 $4.00 $226,668 $100.00
par value shares
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c).
===============================================================================
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PROSPECTUS
56,667 Shares
Common Stock
AMERICAN TECHNOLOGIES GROUP, INC.
CONSULTANT AGREEMENT
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________________
This Prospectus relates to 56,667 shares of Common Stock of American
Technologies Group, Inc., a Nevada corporation (the "Company"), subject to
agreements (the "Agreements") entered into by and between the Company and two
consulting firms (individually, a "Consultant" and collectively,
"Consultants").
Consultants who are affiliates of the Company, as such term is defined in
Rule 405 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may not resell under this Prospectus shares of the
Company's Common Stock received pursuant to the Agreements. Any other
Consultants, however, may from time to time sell, without restrictions,
shares of Common Stock received pursuant to such Agreements.
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT.
The date of this Prospectus is July 11, 1997.
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The Company hereby undertakes to provide to each person to whom this
Prospectus is delivered, without charge, upon written or oral request of such
person, a copy of any and all documents required to be delivered pursuant to
Rule 428(b) under the Securities Act and a copy of any or all of the other
documents that have been incorporated by reference in the Registration
Statement on Form S-8, covering the shares of Common Stock under the
Agreements, filed with the Securities and Exchange Commission concurrently
herewith. Those documents are herein incorporated by reference and may be
obtained by contacting James Nicastro, Vice President, Administration,
American Technologies Group, Inc., 1017 South Mountain Avenue, Monrovia,
California 91016, telephone number (818) 357-5000.
TABLE OF CONTENTS
Page
Introduction............................................................ 3
Description of the Agreements........................................... 3
___________________
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, in connection
with the Agreements described in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offering
in any state in which such offering may not lawfully be made.
2
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INTRODUCTION
This Prospectus relates to 56,667 shares of Common Stock of the Company
issuable under the Agreements. A Registration Statement on Form S-8 (the
"Registration Statement") with respect to such shares of Common Stock has
been filed with the Securities and Exchange Commission concurrently
herewith. This Prospectus, which forms a part of such Registration
Statement, sets forth information concerning the Agreements and the Company
and is being distributed to participating Consultants pursuant to the
Securities Act.
The Company's principal executive offices are located at 1017 South
Mountain Avenue, Monrovia, California 91016; its telephone number is (818)
357-5000.
DESCRIPTION OF THE AGREEMENTS
DESCRIPTION OF THE AGREEMENTS
Two separate contracts constitute the Agreements under which the Company's
Common Stock is to be issued pursuant to this Prospectus: (i) a Consultant
Warrant Agreement dated December 2, 1996 by and between the Company and
C.C.R.I. Corporation, a Colorado corporation ("CCRI"), (the "CCRI Warrant
Agreement"); and (ii) a Consulting Agreement dated as of May 20, 1997 by and
between the Company and BWN Oil Investments, Inc., a Nevada corporation
("BWN"), (the "BWN Agreement").
CCRI WARRANT AGREEMENT. The CCRI Warrant Agreement grants CCRI the right
to purchase up to 160,000 shares of the Company's Common Stock at $2.12 per
share upon the occurrence of certain events in consideration of CCRI
providing investor relations and development services to the Company pursuant
to a Consulting Agreement dated December 2, 1996 by and between the Company
and C.C.R.I (the "CCRI Services Agreement," the CCRI Services Agreement and
the CCRI Warrant Agreement are hereinafter referred to together as the "CCRI
Agreements"). Such services include the preparation of a corporate profile,
promoting the Company to the investment community and assistance with public
relations. Of the 160,000 shares of Common Stock covered by the CCRI Warrant
Agreement, 80,000 shares have vested, 40,000 of which are covered by the
Registration Statement of which this Prospectus forms a part.
BWN AGREEMENT. The BWN Agreement provides for the issuance of 20,000
shares of the Company's Common Stock to BWN in exchange for BWN locating
potential products and companies for ATG to acquire and providing other
services to the Company. Of these shares, 3,333 shares will not be issued as
payment for the costs related to the preparation and filing of the
Registration Statement and other sums due the Company by an affiliate of BWN.
TERMINATION OF AGREEMENTS. The CCRI Agreements terminates on December 2,
2001. The BWN Agreement terminates on May 20, 1998
3
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ADMINISTRATION OF THE AGREEMENTS. The Agreements are administered by the
Chief Executive Officer and the President of the Company. The officers are
elected by the Company's Board of Directors (the same persons, one of whom is
also a principal stockholder of the Company, constitute two of the five Board
members), and serve at the discretion of the Board, until their respective
successors are elected and qualify. Such officers have the authority to
construe and interpret any of the provisions of the Agreements.
Other than as disclosed herein, such officers and Directors of the Company
have no material relationships with the Company, its employees, or its
affiliates.
ERISA
The Agreements and the Common Stock issuable thereunder are not subject to
the Employee Retirement Income Security Act of 1974 ("ERISA").
SOURCE FOR SECURITIES COVERED BY THE AGREEMENTS
The shares subject to the Agreements will be newly issued shares of Common
Stock issued by the Company and are not expected to be purchased in the open
market.
RESTRICTIONS ON TRANSFER OF STOCK
Common Stock issued pursuant to the Agreements may be sold, assigned,
gifted, pledged, hypothecated, encumbered or otherwise transferred or
alienated in any manner by the holder(s) thereof, subject however to such
other restrictions as may be contained in the Agreements and also subject to
compliance with any applicable federal, state or other local law, regulation
or rule governing the sale or transfer of stock or securities.
Affiliates of the Company may not sell shares of Common Stock acquired
pursuant to this Prospectus unless such shares have been registered under the
Securities Act by the Company for resale by Affiliates or an exemption for
such registration is available. Rule 144, promulgated under the Securities
Act, which contains limitations on the manner of sale and the amount of
shares that may be sold, provides an exemption from registration under the
Securities Act.
TAX EFFECT OF AGREEMENTS
The Company has not investigated the tax implications of the Agreements to
the persons who acquire Common Stock thereunder. Consultants who receive
Common Stock should consult their own tax advisors as to the tax consequences
to them. No representations regarding any such tax consequences is made by
the Company.
4
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing information specified in this Part I are being
separately provided to the Registrant's consultants as specified by Rule
428(b)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in paragraphs (a) through (c) below are hereby
incorporated by reference in this Registration Statement. All documents
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), prior
to the filing of a post-effective amendment which indicates that all
securities offered herein have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereto from the date of filing
of such documents.
(a) The Registrant's Annual Report on Form 10-KSB for the year ended
July 31, 1996.
(b) All other reports filed by Registrant pursuant to Sections 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the
above-referenced Annual Report.
(c) The section of the Registrant's Registration Statement on Form 10,
filed with the Commission on January 24, 1994, entitled "Description of
Securities", as amended by Amendment Nos. 1, 2, 3 and 4 filed with the
Commission on February 22, 1994, June 17, 1994, July 5, 1994 and July 15,
1994, respectively.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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Item 6. Indemnification of Directors and Officers.
1. Section 78.751 of the Nevada Revised Statutes permits the
indemnification of officers, directors, employees and agents of the
Registrant and requires indemnification in certain instances. Such provision
reads as follows:
78.751. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
ADVANCEMENT OF EXPENSES.
1. A corporation may indemnify any person who was or
is a party or is threatened to be made a party to
any threatened, pending or completed action, suit
or proceeding, whether civil, criminal,
administrative or investigative, except an action
by or in the right of the corporation, by reason
of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was
serving at the request of the corporation as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or
other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by
him in connection with the action, suit or
proceeding if he acted in good faith and in a
manner which he reasonably believed to be in or
not opposed to the best interests of the
corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did
not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the
best interests of the corporation, and that, with
respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct
was unlawful.
2. A corporation may indemnify any person who was or
is a party or is threatened to be made a party to
any threatened, pending or completed action or
suit by or in the right of the corporation to
procure a judgment in its favor by reason of the
fact that he is or was a director, officer,
employee or agent of the corporation, or is or was
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serving at the request of the corporation as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or
other enterprise against expenses, including
amounts paid in settlement and attorneys' fees
actually and reasonably incurred by him in
connection with the defense or settlement of the
action or suit if he acted in good faith and in a
manner which he reasonably believed to be in or
not opposed to the best interests of the
corporation. Indemnification may not be made for
any claim, issue or matter as to which such a
person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation,
unless and only to the extent that the court in
which the action or suit was brought or other
court of competent jurisdiction determines upon
application that in view of all the circumstances
of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the
court deems proper.
3. To the extent that a director, officer, employee
or agent of a corporation has been successful on
the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections 1
and 2, or in defense of any claim, issue or matter
therein, he must be indemnified by the corporation
against expenses, including attorneys' fees,
actually and reasonably incurred by him in
connection with the defense.
4. Any indemnification under subsections 1 and 2,
unless ordered by a court or advanced pursuant to
subsection 5, must be made by the corporation only
as authorized in the specific case upon a
determination that indemnification of the
director, officer, employee or agent is proper in
the circumstances. The determination must be
made:
(a) By the stockholders;
(b) By the board of directors by majority vote of
a quorum consisting of directors who were not
parties to the act, suit or proceeding;
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(c) If a majority vote of a quorum consisting of
directors who were not parties to the act, suit or
proceeding so orders, by independent legal counsel
in a written opinion; or
(d) If a quorum consisting of directors who were
not parties to the act, suit or proceeding cannot
be obtained, by independent legal counsel in a
written opinion.
5. The certificate or articles of incorporation, the
bylaws or an agreement made by the corporation may
provide that 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 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.
The provisions of this subsection do not affect
any rights to advancement of expenses to which
corporate personnel other than directors or
officers may be entitled under any contract or
otherwise by law.
6. The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to
this section:
(a) Does not exclude any other rights to which a
person seeking indemnification or advancement of
expenses may be entitled under the certificate or
articles of incorporation or any bylaw, agreement,
vote of stockholders or disinterested directors or
otherwise, for either an action in his official
capacity or an action in another capacity while
holding his office, except that indemnification,
unless ordered by a court pursuant to subsection 2
or for the advancement of expenses made pursuant
to subsection 5, may not be made to or on behalf
of any director or officer if a final adjudication
establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing
violation of the law and was material to the cause
of action.
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(c) Continues for a person who has ceased to be a
director, officer, employee or agent and inures to
the benefit of the heirs, executors and
administrators of such a person.
2. Article VI INDEMNIFICATION of the Registrant's Amended and Restated
Bylaws provides in material part as follows:
"Section 1. DEFINITIONS. For the purposes of
this Article, "agent" means any person who is or was a
director, officer, employee, or other agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent
of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise,
or was a director, officer, employee, or agent of a
foreign or domestic corporation or other enterprise
which was a predecessor corporation of the corporation
or of another enterprise at the request of such
predecessor corporation.
"Section 2. INDEMNIFICATION OF CORPORATE AGENTS.
The corporation shall indemnify any person who was or
is a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the
request of the corporation as a director, officer,
employee or agent of another corporation, partnership,
joint venture, trust or other enterprise to the fullest
extent permitted by Nevada law and permitted by, or not
inconsistent with, the Articles of Incorporation. The
rights conferred on any person above shall be not be
exclusive of any other right such person may have or
hereafter acquire under any statute, provision of the
Articles of Incorporation, bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
"Section 3. ADVANCEMENT OF EXPENSES. 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 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. The provisions of this subsection
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do not affect any rights to advancement of expenses to
which corporate personnel other than directors or
officers may be entitled under any contract or
otherwise by law.
"Section 4. INDEMNIFICATION CONTRACTS. The Board
of Directors is authorized to enter into a contract
with any director, officer, employee or agent of the
corporation, or any person serving at the request of
the corporation as a director, officer, employee or
agent of another corporation, partnership, joint
venture, trust or other enterprise, including employee
benefit plans, providing for indemnification rights
equivalent to, or if the Board of Directors so
determines, greater than, those provided in Section 2
of this Article VI.
"Section 5. INSURANCE. The corporation shall
have [the] power to purchase and maintain insurance or
make other financial arrangements on behalf of any
agent of the corporation for any liability asserted
against or incurred by the agent in such capacity or
arising out of the agent's status as such whether or
not the corporation would have the power to indemnify
the agent against such liability under the provisions
of this Article. The other financial arrangements made
by the corporation may include, but shall not be
limited to, any of the arrangements set forth in the
Nevada General Corporation Law, as the same may be
amended from time to time."
Item 7. Exemption From Registration Claimed.
Not applicable.
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Item 8. Exhibits.
Exhibit
Numbers
-------
5.1 Opinion of John M. Dab.
10.1 Consulting Agreement between the Company and
C.C.R.I. Corporation, dated December 2, 1996.
10.2 Consultant Warrant Agreement between the Company and
C.C.R.I. Corporation, dated December 2, 1996.
10.3 Consulting Agreement between the Company and
BWN Oil Investments, Inc., dated May 20, 1997.
24.1 Consent of John M. Dab (included in Exhibit 5.1).
24.2 Consent of Arthur Andersen LLP.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement to include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
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of the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Monrovia, State of California, on
this 10th day of July, 1997.
AMERICAN TECHNOLOGIES GROUP, INC.
By:/s/JOHN R. COLLINS
-------------------------
JOHN R. COLLINS
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/JOHN R. COLLINS Chairman of the Board, July 10, 1997
- ---------------------- Chief Executive Officer
JOHN R. COLLINS and Treasurer (Principal)
Financial and Accounting
Officer)
/s/SHUI YIN LO Director of Research and July 10, 1997
- ---------------------- Development and a Director
SHUI YIN LO
/s/DAVID GANN Director of Marketing July 10, 1997
- ---------------------- and a Director
DAVID GANN
/s/HUGO POMREHN Vice Chairman of the Board July 10, 1997
- ----------------------
HUGO POMREHN
/s/LAWRENCE J. BRADY President and a Director July 10, 1997
- ----------------------
LAWRENCE J. BRADY
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EXHIBIT INDEX
Exhibit Page
Number -----
- -------
5.1 Opinion of John M. Dab.
10.1 Consulting Agreement between the Company and
C.C.R.I. Corporation, dated December 2, 1996.
10.2 Consultant Warrant Agreement between the Company
and C.C.R.I. Corporation, dated December 2, 1996.
10.3 Consulting Agreement between the Company and
BWN Oil Investments, Inc., dated May 20, 1997.
24.1 Consent of John M. Dab (included in Exhibit 5.1).
24.2 Consent of Arthur Andersen LLP.
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Exhibit 5.1
[LETTERHEAD]
July 11, 1997
Board of Directors
American Technologies Group, Inc.
1017 S. Mountain Ave.
Monrovia, California 91016
Gentlemen:
As General Counsel for American Technologies Group, Inc. (the "Company"),
in connection with the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission on or
about July 11, 1997 relating to the issuance and sale of up to 56,667 shares
of the Company's Common Stock (the "Shares"), as more fully described in the
Registration Statement, I have examined such corporate records and other
documents and such questions of law as I have considered necessary or
appropriate for the purposes of this opinion and, on the basis of such
examination, advise you that in my opinion the Shares will be, when issued
and sold as specified in the Registration Statement, validly issued, fully
paid and nonassessable.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. This consent is not to be construed as an admission
that I am a person whose consent is required to be filed with the
Registration Statement under the provisions of the Securities Act of 1933, as
amended.
Very truly yours,
/s/ John M. Dab
John M. Dab
General Counsel
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC.
CONSULTING AGREEMENT
This Consulting Agreement is made and entered into this 2nd day of
December 1996, by and between C.C.R.I. CORPORATION, A Colorado Corporation
("Consultant") and AMERICAN TECHNOLOGIES GROUP, INC. (the "Company").
It is agreed as follows:
1. CONSULTANT SERVICES. consultant hereby agrees to perform and
provide investor relations and development services for the Company. Consultant
will perform the Services with the assistance and full participation of Mr.
Malcolm McGuire and his associates. The services will include, but not be
limited to, the following:
(a) Preparation of a Corporate Profile, suitable for use with brokers
and investors (research, write, design, print and distribute). All content is
subject to the Company's approval.
(b) Design and implement a Plan for both the short and long term
promotion of investor interest in the Company.
(c) Interface with the investment community on behalf of the Company,
and publicly promote investor interest in the Company in this setting.
(d) Assist the Company in preparing press releases, upon request, and
introduce the Company to appropriate financial writers and media persons.
(e) Prepare and distribute FAX pieces designed specifically to
promote interest in the Company (utilizing C.C.R.I.'s broker and investor FAX
NETWORK).
(f) Enlist additional quality market makers for the Company's stock.
(g) Introduce Company personnel to key persons in the investment
community and to C.C.R.I.'s network of brokers, financial planners, money
managers, analysts, and investors. This will include promotional meetings in
select cities.
(h) Include information about the Company in a mailing that will
target 10,000 selected appropriate institutions, brokers, investment firms and
individual investors.
(i) Develop a list of key brokers that can be cultivated on behalf of
the Company and its stock, and seek to enhance the interest of these brokers in
the Company.
(j) Assist, when requested, in the preparation of presentations to
broker and investor groups.
(k) Provide quality Internet exposure via C.C.R.I.'s Web Site.
<PAGE>
(l) Work with Company's officers to develop an ongoing in-house
program for investor relations.
2. PAYMENT. Subject to the provisions of this Agreement, the
Company shall pay Consultant the following as full compensation for the Services
for the term hereof:
(a) RETAINER. The Company shall pay Consultant an initial retainer
of $20,000, payable as of the date hereof, as compensation for Consultant's
initial due diligence and research expenses, preparation of Corporate Profile,
mailing of said profile as indicated in 1. (h), and complete monitoring of
mailing responses. ($10,000 to be paid at the signing of the Contract, and
$10,000 at the time the Profile is approved).
(b) EXPENSES. The Company will reimburse Consultants administrative
expenses in performing the Services, payable in arrears on the 1ST day of each
month upon Consultant's delivery to the Company of an itemized statement of such
expenses for the previous month, payable up to a maximum of $2,500 per month,
unless otherwise negotiated between Company and Consultant.
(c) STOCK WARRANT. Subject to the provisions of this Agreement, and
the Company's receipt from Consultant of appropriate investment letters and the
filing of such documents as may be necessary to establish all necessary
exemptions from the registration requirements of federal or state securities
law, the Company hereby grants Consultant warrants to purchase 160,000 shares of
the common stock of the Company exercisable at $2.12 per share. The Warrant
shall vest in accordance with and be governed by the terms of the Warrant
Agreement attached hereto as Appendix A. The Company will cause the shares of
Common Stock issuable upon exercise of the Warrants to be registered under the
Securities Act of 1933 pursuant to a registration statement. The Company will
provide a legal opinion from its legal counsel, that the Company may lawfully
issue the warrants. In the event that said warrants have not been registered by
April 2, 1997, C.C.R.I. shall be entitled to interim cash compensation equal to
the spread between the stock price and the warrant option price on all or part
of the warrants to which it is legally entitled on that April 2 date. This
"right" shall continue to be in effect until warrant registration is
accomplished. Warrants for which C.C.R.I receives alternate cash compensation
shall be returned to AMERICAN TECHNOLOGIES GROUP, INC.
3. PROJECT EXPENSES. The company shall pay Consultant project
expenses for the out of pocket costs of promotional events and materials, such
expenses to be approved in advance by the Company, and to be payable upon
submission by Consultant to the Company of itemized statements accounting for
such expenses, or at the discretion of the Company, upon the Company's receipt
of written estimates of such expenses. In certain circumstances, the Company
will prepay the consultants, airfare or hotel costs directly as agreed to in
advance by the parties. Such projects will include, but not be limited to the
following:
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(a) CORPORATE PROFILE. Consultant agrees to produce a full-color
four-page promotional brochure, (cost covered in initial retainer).
(b) PROMOTIONAL EVENTS. The Company agrees to reimburse consultant
for reasonable travel, meal and lodging expenses incurred in co-hosting with the
Company promotional meeting for prospective investors, such meetings to be
approved in advance and at the discretion of the Company. The Company also
agrees to pay all room rental and catering expense incurred in hosting any such
meetings.
(c) MAILING. Within forty-five (45) days of the date of this
Agreement, the Consultant shall cause to be mailed certain pre-printed materials
(corporate profile) which shall include an attached card returnable to the
Consultant, encouraging the recipient to request appropriate materials, created
by the Consultant in accordance with Section 3. (a) hereof.
4. Prior Approval of Published Materials. Consultant shall provide
the Company for its review and comment copies of any tangible communications,
whether written or recorded on audio, video or film media, which Consultant may
give to any person in providing the Services. Consultant shall provide such
copies to the Company a minimum of two (2) business days prior to Consultant's
first proposed use of such materials, or more than five (5) business days prior
if necessary, to provide the Company the opportunity to make any revisions it
deems appropriate and necessary to such materials. Consultant shall not use
material in performing the Services which contain any statement which is false
or misleading; provided that consultant shall not be responsible for the
accuracy or completeness of information furnished to it in writing by the
Company.
5. NONDISCLOSURE OF CONFIDENTIAL OR INSIDER INFORMATION.
(a) In the course of performance of Consultant's duties, Consultant
may receive information which is considered material inside information within
the meaning and intent of the United States federal securities laws, rules and
regulations. Consultant will not disclose this information to others, except as
expressly authorized by the Company and will not use this information directly
or indirectly for the benefit of Consultant or as a basis for advice to any
other party concerning any decision to buy, sell, or otherwise deal in the
Company's securities or those of any of its affiliated companies.
(b) The provisions of this Section 5 shall survive the termination or
expiration of this Agreement.
6. SCOPE OF ENGAGEMENT. Consultant shall retain the legal status of
an independent contractor. In no event shall Consultant be or be deemed to be
an employee or agent of the Company, or to qualify for benefits afforded such
persons as Company employees. Consultant has no power or authority to act for,
represent, or bind the Company.
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<PAGE>
7. TERM. This Agreement shall commence on the date first written
above, and shall terminate on the one-year anniversary of such date, unless
earlier terminated by either party pursuant to the terms hereof. The Agreement
will automatically renew for a second year if not terminated in writing.
8. TERMINATION. Either party may terminate this Agreement at any
time upon ten (10) business days' notice. In the event that this Agreement is
terminated by either party prior to the end of the one-year term the Consultant
shall be entitled to reimbursement of expenses as provided in paragraphs 2 and 3
through the date of termination. Termination of this Agreement shall not affect
the rights of the Consultant under the Warrant.
9. ASSIGNMENT. This Agreement shall be binding upon the parties'
respective successors and permitted assigns. Neither party may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
10. NOTICES. All notices and other official communications under
this Agreement shall be in writing and deemed sufficiently given if delivered
personally or mailed by first class mail, postage prepaid, to (if to the
Company): AMERICAN TECHNOLOGIES GROUP, INC., 1017 South Mountain, Monrovia, CA
91016, Attention: Hugo P. Pomrehn, President; and (if to Consultant):
C.C.R.I. Corporation, 3104 E. Camelback Rd. #539, Phoenix, AZ 85016,
Attention: Malcolm McGuire, or to such other address as Consultant may from
time to time designate in writing. Notices shall be effective upon delivery if
delivered personally, and on the third business day after mailing if mailed.
11. SEVERABILITY. In the event any one or more of the provisions of
this Agreement is determined to be invalid, illegal or unenforceable, the
remaining provisions of the Agreement shall remain in full force and effect,
unless the removal the provisions of the Agreement so nullified would render
meaningless either party's performance hereunder.
12. HEADINGS. The heading used in this Agreement are for the
convenience of the parties only and shall not in any way limit or affect the
meaning or interpretation of any of the terms.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter embraced
hereunder including the Warrant Agreement and except as expressly incorporated
herein, supersedes all prior agreements, promises, proposals, representations,
understandings and negotiations, whether written or oral, between the parties.
No modifications, amendment, supplements, to or waivers of this Agreement or any
of the terms or conditions hereof shall be binding upon the parties or of any
effect unless made in writing and duly signed by both parties. In the event of
any conflict between this Agreement and any Warrant Agreement entered into by
and between the parties, this Agreement shall control.
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<PAGE>
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without regard to the
principles of Laws.
Accepted by:
C.C.R.I. Corporation AMERICAN TECHNOLOGIES GROUP, INC.
By: /s/ Malcolm McGuire By: /s/ John Collins
------------------------------ ----------------------------------
Malcolm McGuire, President John Collins, C.E.O.
Date: December 2, 1996 Date: December 2, 1996
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<PAGE>
160,000 Warrants
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR
SOLD EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
(II) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III)
UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, STATING THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
AMERICAN TECHNOLOGIES GROUP, INC.
CONSULTANT WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of this 2nd day of December
1996, by and between AMERICAN TECHNOLOGIES GROUP, INC. (the "Company") and
C.C.R.I. CORPORATION (the "Consultant") (together, the "Parties").
RECITALS
A. As of December 2, 1996, the Company and the Consultant entered
into a Consulting Agreement , under which the Consultant received warrants to
purchase common stock of the Company ("Common Stock").
B. The Consulting Agreement provides for the issuance to Consultant
of warrants to purchase 160,000 shares of the common stock of the Company,
exercisable at a price of $2.12 per share.
C. The Company has agreed to issue and the Consultant is desirous of
obtaining the warrants on the terms and conditions herein contained.
IT IS THEREFORE agreed by and between the parties, for and in
consideration of the premises and the mutual covenants herein contained and for
other good and valuable consideration, as follows:
1. The Company hereby confirms and acknowledges that it has granted
to the Consultant, on December 2, 1996, warrants to purchase 160,000 shares of
Common Stock (the "Warrant") upon the terms and conditions herein set forth
subject to the terms and conditions of the Consulting Agreement. The Warrant
shall have a 5 year life and is granted as compensation for services.
<PAGE>
2. The purchase price of the shares of Common Stock underlying the
warrants which may be purchased pursuant to the Warrant is as outline below.
3. The Warrant shall continue for five years after the date of
grant set forth in paragraph 1, unless sooner terminated or modified under the
provisions of this Agreement or the Consulting Agreement, and shall
automatically expire at midnight on the fifth anniversary of such date.
4. The Warrant shall vest in equal increments of 40,000 shares
exercisable as follows upon the occurrence of certain conditions set forth
below:
a. The Warrant shall become exercisable at a price of $2.12 per
share as to 40,000 shares upon execution and delivery of this Warrant Agreement.
b. The second increment of 40,000 shares shall vest and become
exercisable at a price of $2.12 per share on April 2, 1997 if on or before said
date the closing price of the Common Stock, wherever listed is $4.24 per share
or higher.
c. The third increment of 40,000 shares shall vest and become
exercisable at a price of $2.12 per share on July 2, 1997, if on or before said
date the closing price of the Common Stock, wherever listed, is $6.36 per share
of higher.
d. The fourth increment of 40,000 shares shall vest and become
exercisable at a price of $2.12 per share on October 2, 1997 if on or before
said date the closing price of the common stock wherever listed is $8.48 per
share or higher.
In the event that any of the stock performance parameters set forth above for a
specific period is not met for such period, but in a subsequent period are met,
then, in addition to the shares which would otherwise be exercisable for such
subsequent period pursuant to the terms hereof with respect to that performance
parameter, these previous shares shall also become vested by having achieved the
price target. Warrant shares which have not vested as of December 2, 1997 in
accordance with these terms shall not be exercisable and this Warrant shall
terminate as to such unvested shares after December 2, 1997. "All" price
targets that have been met by December 2, 1997 will retroactively vest those
shares.
5. The shares of Common Stock issuable upon exercise of the Warrant
shall be included in a Registration Statement which shall be filed with the
Securities and Exchange Commission to permit Consultant's public resale of any
shares obtained upon exercise of the Warrant. The Company agrees to cause such
Registration Statement to be filed within
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<PAGE>
30 days of the date of signing and delivery of this Warrant Agreement and to use
reasonable efforts to cause such registration statement to become effective as
soon as reasonably possible thereafter. The Company agrees to bear the
reasonable costs and expenses of such registration, and the costs and expenses
of obtaining the registration or qualification of the shares issuable upon
exercise of the Warrant.
6. Subject to the terms of paragraph 8 hereof, this Warrant shall be
transferable upon surrender of this Warrant Agreement, with the form of
assignment attached hereto duly executed by Consultant, to the Company at its
office in the State of California. Upon such surrender, the Company shall cause
a Warrant Certificate containing terms identical to those of this Warrant
Agreement, to be issued in the name of the transferee or transferees. If this
Warrant Agreement is assigned in respect of less than all the shares covered
hereby, Consultant shall be entitled to receive a new Warrant Agreement covering
the number of shares not so assigned.
7. Subject to the vesting requirements of paragraph 4 above, the
Warrant may be exercised in whole or in part by delivering to the Company
written notice of exercise on the Purchase Form included herein together with
payment in full for the shares being purchased upon such exercise. The Company
will, upon receipt of said notice and payment, issue or cause to be issued to
the Consultant a stock certificate for the number of shares purchased hereby.
8. The consultant represents and agrees that: (i) the Warrant shall
not be exercisable unless the purchase of Warrant shares upon the exercise of
the Warrant is pursuant to an applicable effective registration statement under
the Securities Act of 1933 (the "Act"), or unless in the opinion of counsel for
the Company, the proposed purchase of such Warrant shares would be exempt from
the registration requirements of the Act, and from the qualification
requirements of any state securities law; (ii) upon exercise of the Warrant, it
will acquire the Warrant shares for its own account for investment and not with
any intent or view to any distribution, resale or other disposition of the
Warrant shares except as permitted hereby; (iii) it will not sell or transfer
the Warrant shares, unless they are registered under the Act. The Company may
require, as a condition of the exercise of the Warrant, that the consultant sign
such further representations and agreements as it reasonably determines to be
necessary or appropriate to assure and to evidence compliance with the
requirements of the Act.
9. In case the Company shall at any time subdivide (by way of a
stock split or stock dividend) or combine the outstanding shares of Common
Stock, the exercise price shall be
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<PAGE>
forthwith proportionately decreased (in the case of subdivision) or increased
(in the case of combination) and the number of shares of Common Stock
deliverable upon the exercise of this Warrant shall be proportionately adjusted.
10. The Consultant shall have no rights as a stockholder with respect
to the shares of Common Stock which may be purchased pursuant to the Warrant
until such shares are issued to the Consultant.
11. THIS AGREEMENT IS ENTERED INTO AND SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
12. The terms and conditions contained in Consulting Agreement, and
as it may be amended from time to time hereafter, are incorporated into and made
a part of this Agreement by reference, as if the same were set forth herein in
full, and all provisions of the Warrant are made subject to any and all terms of
the Consulting Agreement.
13. Any notice to be given under the terms of this Agreement shall be
given in accordance with Section 10 of the Consulting Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Consultant Warrant Agreement as of the date first above mentioned.
AMERICAN TECHNOLOGIES GROUP, INC.
By: /s/ John Collins
---------------------------------------
John Collins, C.E.O.
C.C.R.I. CORPORATION
By: /s/ Malcolm McGuire
---------------------------------------
Malcolm McGuire, President
Address:
Suite 539
3104 East Camelback Road
Phoenix, Arizona 85016
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<PAGE>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is dated as of May 20, 1997
and entered into by and between AMERICAN TECHNOLOGIES GROUP INC., a Nevada
corporation ("ATG"), and BWN OIL INVESTMENTS, INC., a Nevada corporation,
("BWN"), and is made with respect to the following:
A. WHEREAS, ATG desires to memorialize the terms under which BWN will
locate potential products and companies for ATG to acquire and to provide
other services to ATG;
B. WHEREAS, BWN is willing to provide such services to ATG;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:
1. CONSULTING SERVICES. BWN shall provide consulting services to ATG
as described above.
2. TERM. The term ("Term") of this Agreement shall commence on the
date hereof and shall be for a one year term.
3. COMPENSATION. As full compensation for all services to be performed
by BWN pursuant to this Agreement, ATG shall pay to BWN Sixty-Three Thousand
Dollars ($63,000) in the form of twenty thousand (20,000) shares of ATG
Common Stock (the "Shares") valued at $3.15 per share.
4. BWN REPRESENTATIONS AND WARRANTIES. BWN hereby warrants and
represents to ATG as follows, each of which representation and warranty is
material and is being relied upon by ATG and each of which is true at and as
of the date hereof and will be true at the time of issuance of the Shares:
4.1 that BWN will acquire the Shares for BWN's own account and not
with a view to their resale or distribution and that BWN is prepared to hold
the Shares, if acquired, for an indefinite period and has no present
intention to sell, distribute or grant any participating interests in the
Shares, if acquired. BWN hereby acknowledges the fact that the Shares will
not be registered under the Securities Act of 1933, as amended (the "1933
Act") or the California Corporations Code.
4.2 that BWN has been informed that the Shares may not be resold or
transferred unless first registered under the Federal and California
securities laws or unless an exemption from such registration is available.
Accordingly, BWN hereby
<PAGE>
acknowledges that BWN is prepared to hold the Shares for an indefinite period
of time.
4.3 that BWN has a preexisting business or personal relationship
with ATG, that he is aware of the business affairs and financial condition of
ATG and that BWN has such knowledge and experience in business and financial
matters with respect to companies in business similar to ATG to enable BWN to
evaluate the risks of the prospective investment and to make an informed
investment decision with respect thereto. BWN further acknowledges that ATG
has made available to BWN the opportunity to ask questions and receive
answers from ATG concerning the terms and conditions of the issuance of the
Shares and that BWN could be reasonably assumed to have the capacity to
protect its own interests in connection with such investment.
4.4 that BWN realizes that its purchase of the Shares is a
speculative investment and that BWN and each of its shareholders is able,
without impairing its financial condition, to hold the Shares for an
indefinite period of time and to suffer a complete loss of its investment.
4.5 that there are no more than five shareholders of BWN.
5. NO TRANSFER: BWN shall not transfer, encumber, alienate or dispose,
by gift or otherwise, all or any part of the Shares, except as may be
permitted by law.
6. RESTRICTIVE LEGEND: In order to reflect the restrictions on
disposition of the Shares, the stock certificates for such shares will be
endorsed with the a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933
OR APPLICABLE STATE LAW, AND MAY NOT BE SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION THEREUNDER OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED.
7. REGISTRATION RIGHTS. If at any time BWN desires to sell the Shares
and resale of the Shares is not available under Rule 144 or such other
comparable Rule, BWN shall so notify ATG in writing and as soon as
practicable ATG shall file a registration statement on Form S-8 or other
applicable form with the Securities and Exchange Commission covering the
Shares, at BWN's expense which shall not exceed $5,000.
2
<PAGE>
8. TERMINATION. This Agreement may be terminated upon thirty days
advance written notice by either party for any reason or no reason.
9. NOTICES. Any and all notices or other communications required or
permitted by this Agreement or by law shall be deemed duly served and given
when actually received by personal delivery or by certified mail, return
receipt requested, with first class postage prepaid thereon, to the party to
whom such notice or communication is directed, addressed as follows:
ATG: AMERICAN TECHNOLOGIES GROUP, INC.
1017 South Mountain Avenue
Monrovia, CA 91016
Attention: Chief Executive Officer
BWN: BWN OIL INVESTMENTS, INC.
150 Deodar Lane
Bradbury, CA 91010
Each of the parties hereto may change its address for purposes of this
Section 9 by giving written notice of such change in the manner provided for
in this Section 9.
10. ATTORNEY'S FEES AND EXPENSES. In the event that it should become
necessary for any party to this Agreement to bring an action, including
arbitration, either at law or in equity, to enforce or interpret the terms of
this Agreement, the prevailing party in such action shall be entitled to
recover its reasonable attorneys' fees and expenses as a part of any judgment
therein, in addition to any other award which may be granted.
11. APPLICABLE LAW/VENUE. This Agreement is executed and intended to
be performed in the State of California and the laws of such state shall
govern its interpretation and effect. If suit is instituted by any party
hereto by any other party hereto for any cause or matter arising from or in
connection with the respective rights or obligations of the parties
hereunder, the sole jurisdiction and venue for such action shall be the
Superior Court of the State of California in and for the County of Los
Angeles.
12. INTEGRATED AGREEMENT. As to the subject matter of this Agreement,
this Agreement constitutes the entire agreement of the parties and supersedes
all prior agreements between the parties and all such prior agreements shall
be deemed voluntarily terminated by the mutual consent of the parties hereto
and shall be of no further force or effect.
3
<PAGE>
13. ASSIGNMENT. This Agreement is not assignable but shall be binding
upon and shall inure to the benefit of the successors of each party hereto.
14. SEVERABILITY. Any provision in this Agreement which is, by
competent judicial authority, declared illegal, invalid or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such illegality, invalidity or unenforceability without invalidating the
remaining provisions hereof or affecting the legality, validity or
enforceability of such provision in any other jurisdiction. The parties
hereto agree to negotiate in good faith to replace any illegal, invalid or
unenforceable provision of this Agreement with a legal, valid and enforceable
provision that, to the extent possible, will preserve the economic bargain of
this Agreement, or otherwise to amend this Agreement, including the provision
relating to choice of law, to achieve such result.
15. NON-COMPETITION. During the term hereof, except for business for
which BWN is currently involved with, BWN shall not, directly or indirectly,
whether as an employee, employer, consultant, agent, officer, principal,
partner, stockholder, director or any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner with the business of ATG.
16. WAIVER. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BWN OIL INVESTMENTS, INC.,
a Nevada corporation
By:/s/ William Carroll
-------------------
William Carroll
Vice President
American Technologies Group, Inc.,
a Nevada corporation
By:/s/ John Collins
----------------
John Collins
Chief Executive Officer
4
<PAGE>
EXHIBIT 24.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To American Technologies Group, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated
November 13, 1996 included in the Company's Form 10-K for the year ended July
31, 1996 and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
July 9, 1997
