<PAGE>
As filed with the Securities and Exchange Commission on August 27, 1998
Registration No. 33- ________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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 AGREEMENTS
(Full Title of the Plan)
Lawrence J. Brady
Chief Executive Officer
American Technologies Group, Inc.
1017 South Mountain Avenue
Monrovia, California 91016
(626) 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
(626) 357-5000
Telecopy: (626) 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]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities to be Registered Amount to be Price per Offering Registration
Registered Share(1) Price(1) Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 1,020,619 shares $0.75 $765,464 $226
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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).
I-1
<PAGE>
PROSPECTUS
1,020,619 Shares
Common Stock
AMERICAN TECHNOLOGIES GROUP, INC.
CONSULTANT AGREEMENTS
-----------------
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 1,020,619 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
certain consultants (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 August 27, 1998.
<PAGE>
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
Consulting Agreements, filed with the Securities and Exchange Commission
concurrently herewith. Those documents are herein incorporated by reference
and may be obtained by contacting John M. Dab, Corporate Secretary, American
Technologies Group, Inc., 1017 South Mountain Avenue, Monrovia, California
91016, telephone number (626) 357-5000.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of the Agreements. . . . . . . . . . . . . . . . . . . . . . 3
</TABLE>
-----------------
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
<PAGE>
INTRODUCTION
This Prospectus relates to 1,020,619 shares of Common Stock of the
Company issuable under the Agreements. A Registration Statement on Form S-8
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 (626)
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) an
Amended and Restated Letter Agreement dated as of June 2, 1998 by and between
the Company and Interfund Resources Limited, a Delaware corporation ("IRL"),
(the "IRL Agreement"); and (ii) a Consulting Agreement dated as of August 20,
1998 by and between the Company and Cone, Rose Thatcher Ltd. a Delaware
corporation ("CRT") (the "CRT Agreement").
CRT AGREEMENT. The CRT Agreement provides for the issuance of 500,000
shares of the Company's Common Stock to CRT for financial consulting services
provided to the Company. Such services include advice on the functioning of
the secondary trading markets for equity securities.
IRL AGREEMENT. The IRL Agreement provides for the issuance of 520,619
shares of the Company's Common Stock to IRL for consulting services provided
to the Company. Such services include advising the Company on potential
relationships with investment banks, marketing, and corporate restructuring.
TERMINATION OF AGREEMENTS. The CRT Agreement terminates on July 31,
1999. The IRL Agreement terminates on May 31, 1999.
ADMINISTRATION OF THE AGREEMENT. The Agreements are administered by the
Chief Executive Officer and Chief Operating Officer of the Company. These
officers are elected by the Company's Board of Directors (the Chief Executive
Officer is also one of the five Board members), and serve at the discretion
of the Board, until their respective successors are elected and qualified.
Such officers have the authority to construe and interpret any of the
provisions of the Agreements.
Other than as disclosed herein, such officers of the Company have no
material relationships with the Company, its employees, or its affiliates.
3
<PAGE>
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 an Agreement 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 Agreement 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.
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
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are hereby incorporated by reference in
this Registration Statement:
(i) The Registrant's Annual Report on Form 10-KSB for the year ended
July 31, 1997 filed with the Securities and Exchange Commission (the
"Commission") on November 13, 1997 (the "ATG 10-K").
(ii) Amendment Number 1 to the ATG 10-K on Form 10-KSB/A filed with
the Commission on November 28, 1997.
(iii) Amendment Number 2 to the ATG 10-K on Form 10-KSB/A filed with
the Commission on December 30, 1997.
(iv) The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended October 31, 1997 filed with the Commission on December 22, 1997.
(v) The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended January 31, 1998 filed with the Commission on March 17, 1998.
(vi) The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended April 30, 1998 filed with the Commission on June 19, 1998.
(vi) The Registrant's Current Report on Form 8-K filed with the
Commission on October 31, 1997.
(vii) 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.
(viii) All other reports subsequently filed by Registrant after the date
of this Registration Statement pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference and to be a part hereof from the date of the filing of
such documents.
II-1
<PAGE>
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters with respect to the Common Stock offered
hereby will be passed upon for the Company by John M. Dab, General Counsel of
the Company.
As of July 31, 1998, Mr. Dab beneficially owned 14,500 shares
of Common Stock and had outstanding options to purchase 185,000 shares of
Common Stock at exercise prices ranging from $1.50 to $3.00 per share.
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.
II-2
<PAGE>
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 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
proceeding;
(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
II-3
<PAGE>
(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.
(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
II-4
<PAGE>
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 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."
II-5
<PAGE>
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Numbers
-------
<S> <C>
5.1 Opinion of John M. Dab.
10.1 Amended and Restated Letter Agreement by and between Registrant
and Interfund Resources Limited dated as of June 2 1998.
10.2 Consulting Agreement by and between Registrant and Cone, Rose
Thatcher Ltd. dated as of August 20, 1998.
24.1 Consent of John M. Dab (included in Exhibit 5.1)
24.2 Consent of Arthur Andersen LLP.
</TABLE>
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.
II-6
<PAGE>
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)
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.
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 26th day of August, 1998.
AMERICAN TECHNOLOGIES GROUP, INC.
By:/s/ Lawrence J. Brady
----------------------------
Lawrence J. Brady
Chairman of the Board and
Chief Executive Officer
II-7
<PAGE>
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ LAWRENCE J. BRADY Chairman of the Board, August 26, 1998
- --------------------- Chief Executive Officer
LAWRENCE J. BRADY
/s/ HAROLD RAPP Chief Operating Officer August 26, 1998
- --------------------- Treasurer (Principal Financial
HAROLD RAPP and Accounting Officer)
/s/ SHUI YIN LO Director of Research and August 26, 1998
- --------------------- Development and a Director
SHUI YIN LO
- --------------------- Director August __, 1998
ALFRED H. KINGON
- ---------------------- Director August __, 1998
WILLIAM ODOM
/s/ TERRY WACHSNER
- ---------------------- Director August 26, 1998
TERRY WACHSNER
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Page
- ------- ----
<S> <C>
5.1 Opinion of John M. Dab.
10.1 Amended and Restated Letter Agreement by and between Registrant
and Interfund Resources Limited dated as of June 2, 1998.
10.2 Consulting Agreement by and between Registrant and Cone,
Rose Thatcher Ltd. dated as of August 20, 1998.
24.1 Consent of John M. Dab (included in Exhibit 5.1)
24.2 Consent of Arthur Andersen LLP.
</TABLE>
II-9
<PAGE>
EXHIBIT 5.1
[LETTERHEAD]
August 27, 1998
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 August 27, 1998 relating to the issuance and sale of
up to 1,020,619 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>
EXHIBIT 10.1
[LOGO]
August 6, 1998
Alan P. Brooks
Interfund Resources Limited
1055 Washington Boulevard, Suite 8A
Stamford, Connecticut 06901
RE: AMENDED RETAINER AGREEMENT
--------------------------
Dear Alan:
As discussed, the services Interfund Resources Limited ("IRL") is
providing under our letter agreement dated June 2, 1998 have been exceptional
and well beyond the scope anticipated at the time of execution of that
agreement. To more properly reflect the agreement between the parties based
upon this subsequent performance, American Technologies Group, Inc. ("ATG" or
the "Company") desires to amend and restate, as of June 2, 1998, the letter
agreement by which ATG retains IRL as its financial advisor.
I SCOPE OF THE AGREEMENT
A) IRL shall advise the Company on its selection of:
i) Public relations firms to enhance its corporate image and
increase its exposure in the equity markets.
ii) Introduce the Company to investment bankers and work with
them to enhance the investment opportunities afforded by
the Company, and with any other investors that would
support the Company's stock.
B) IRL shall advise the Company on the following matters:
i) Redefining its corporate structure.
C) IRL shall:
i) Advise the Company concerning elements of structure, terms
and conditions of any issues of either debt or equity for
the parent or its affiliates.
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 2
ii) Facilitate communication between the Company and any
potential purchasers of its debt or equity offerings.
iii) Investigate and facilitate potential mergers, acquisitions,
joint ventures, corporate partner and strategic alliance
opportunities.
iv) Seek to establish a relationship for the Company with an
investment banker.
v) Advise the Company on all potential actions that would
increase shareholder value.
vi) Receive and respond to any inquiries in reference to the
above.
vii) Consult and communicate with the Company's accountants and
legal counsel to successfully complete the placement of any
offering.
viii) Take such incidental or related actions on behalf of the
Company as IRL may deem appropriate.
ix) The Company is responsible for all information and
representations concerning its operations and financial
condition which may be provided to potential purchasers.
The Company understands that IRL is not obligated to
undertake any independent verification of such information
and representations and IRL assumes no responsibility for
the accuracy, fairness or completeness of such information
or representations. The Company represents and warrants to
IRL that any prospectus prepared and disseminated by the
Company in order to place any debt or equity will be
accurate and complete and will not contain an untrue
statement of material fact or omit to state a material fact
required to be stated therein, or necessary to make the
statements therein in light of the circumstances under
which they are made not misleading. The Company agrees
that all information furnished to IRL in connection with
this agreement shall be accurate and complete in all
material respects at the time provided and that if such
information, in whole or in part, becomes materially
inaccurate, misleading or incomplete during
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 3
the term of IRL's agreement hereunder, the Company shall
promptly so advise IRL in writing and correct any such
inaccuracy or omission.
II FEE STRUCTURE
A) IRL shall receive as its initial retainer, $25,000 of ATG Common
Stock calculated at the bid price less $0.10 as of the close of
business on June 30, 1998 to be immediately registered as free
trading under Rule S-8, if available.
B) IRL shall receive 500,000 shares of ATG Common Stock to be
immediately registered as free trading under Rule S-8, if
available. The shares shall be valued at $0.65 per share.
C) IRL shall receive a monthly retainer of $10,000 due and payable on
the last of each month throughout the term of this agreement. The
first payment being due and payable upon the execution of this
document.
D) The Company shall pay a financial advisory fee to IRL for its
service as financial advisor equal to 6.0% of the aggregate
proceeds received by the Company from issuance or placement of any
debt or equity arranged or negotiated by IRL. The financial
advisory fee referred to in this paragraph will be contingent and
due upon the closing of any proposed financing arranged by the
advisor. In addition to the foregoing fee, the Company agrees to
reimburse IRL for its pre-approved out-of-pocket fees and expenses
incurred by IRL in connection with this letter of agreement or the
services provided hereunder, which amounts shall be payable at
termination or upon the successful closing of any proposed
financing. Out-of-pocket fees and expenses shall not exceed
$10,000 in any one financing without the Company's prior written
consent. However, the Company shall be responsible for all legal
and accounting placement or underwriting fees involved in the
offering.
E) The term of this agreement shall expire on May 31, 1999.
III EXPENSES (GENERAL)
ATG shall reimburse IRL for pre-approved reasonable out-of-pocket costs
and expenses incurred by IRL in connection with this engagement
(collectively, the "Expenses"), including, without limiting the
foregoing, travel and lodging
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 4
expenses, fees and disbursements of legal counsel (including, without
limitation, the allocated cost of in-house legal counsel), accountants,
appraisers and other experts, registration, printing, reproduction,
document delivery and communication costs. It is understood that IRL
shall allocate Expenses as between its advisory and arranging services
in good faith and that such allocation shall be binding onto the parties
hereto.
IV INDEMNIFICATION
Each party shall indemnify and hold harmless the other and their
affiliates, and their respective officers, directors, advisors,
representatives, agents, employees and controlling persons (each an
"Indemnified Person") from and against any and all losses, claims,
damages or liabilities, joint or several, and expenses (including the
fees, changes and disbursements of external counsel and allocated costs
of internal legal counsel) incurred in connection with investigating,
preparing to defend or defending any actual or threatened action, claim
or legal, administrative or judicial proceeding or investigation
(collectively, "claims") related to or arising out of or in connection
with such party's performance of this agreement or any matter referred to
herein, whether based on contract, tort or any other theory and
regardless of whether the Indemnified Person is a formal party to any
such action, claim or proceeding, or investigation provided that such
indemnity shall not apply to Claims to the extent that a court of
competent jurisdiction shall have determined by a final judgment not
subject to further appeal that such Claims resulted solely from the
Indemnified Person's negligence or willful misconduct.
The indemnifying party agrees that it will not, without the prior written
consent of the Indemnified Person, settle any pending or threatened
action, claim, proceeding or investigation related to or arising out of
any such matter unless such settlement includes a provision
unconditionally releasing such Indemnified Person from and holding such
Indemnified Person harmless against all liability in respect to claims by
any releasing party related to or arising out of any matter referred to
in this agreement.
V CONFIDENTIALITY
A) IRL agrees to treat in confidence any information, identified as
confidential, supplied to it by ATG in connection with this
engagement. Said information shall not be revealed to third
parties under any circumstances whatsoever, except as authorized
by the provider of the information, provided, however, that IRL
may disclose such information to those of its affiliates and its
and their respective directors, officers,
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 5
employees, agents or advisors (collectively its
"Representatives") who need to know such information for purposes
of assisting in the performance of the services contemplated by
this agreement or evaluating the Financing; it being understood
that such Representatives shall have first been informed of the
confidential nature of the information and are bound by a
confidentiality agreement comparable to this section, and
provided, further, that the information which;
i) is required to be disclosed by applicable law or is
requested by a regulatory authority having jurisdiction
over a party hereto,
ii) is or becomes generally available to the public other than
as a result of a disclosure made in breach of this Section
V or,
iii) became available to IRL from a source other than ATG or its
Representatives shall not be subjected to this Section V.
iv) the terms and provisions of this Section V shall survive
any termination or expiration of this agreement.
B) IRL shall cease to use any confidential information and shall
promptly return to ATG any and all physical, written and
descriptive matter (including all reproductions and copies
thereof) containing confidential information upon termination or
expiration of this agreement.
VI AVAILABILITY OF INFORMATION
ATG agrees to make available to IRL in a timely manner all information
IRL shall reasonably deem appropriate in connection with its activities
on IRL's behalf and shall provide IRL full access to ATG's officers,
directors, employees and professional advisors as required in connection
with the performance by IRL of its services hereunder. ATG recognizes
and confirms that IRL in acting pursuant to this engagement will be using
information in public reports and other information provided by ATG, and
that IRL does not assume responsibility for, and may rely without
independent verification upon the accuracy and completeness of any such
information.
VII EXCLUSIVITY
ATG agrees that no other person or entity may be engaged or authorized
during the term of this agreement to perform services on its behalf of
the type which IRL
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 6
is authorized to perform hereunder in connection with the transactions
contemplated by this agreement.
VIII MATERIAL ADVERSE CHANGE
IRL's responsibilities under this agreement are subject to there being no
material adverse change in the financial or other condition, business or
prospects of ATG or the financial markets of any jurisdiction relevant to
the transactions contemplated by this agreement, provided however, if IRL
determines there has been a material adverse change, then this agreement
shall immediately terminate.
IX ASSIGNMENT
This agreement may not be assigned by either party to any other without
the prior written consent of the other party to this agreement.
X GOVERNING LAW AND SUBMISSION TO JURISDICTION
A mutually agree arbitration clause will be inserted and executed at a
later date as Addendum No. 1.
XI MISCELLANEOUS
IRL and ATG may place public announcements or advertisements in financial
and other newspapers and journals describing its services hereunder
subject to approval, except as may be required by law.
Signature on this agreement received by way of FAX transmission shall be deemed
to be an executed contract agreement enforceable and admissible for all purposes
as may be necessary under the terms of the agreement. All signatories hereto
acknowledge that they have read the foregoing agreement and by their signature
hereby unconditionally agree to its terms and conditions as of the dates noted
below. All signatories hereto warrant that they have full and complete
authority to execute this document for and in the name of the party for which
they have given their signature.
<PAGE>
Alan P. Brooks
Interfund Resources Limited
August 6, 1998
Page 7
Sincerely,
American Technologies Group, Inc.
By: /s/ Lawrence J. Brady
_______________________
Name: Lawrence J. Brady
Title: CEO Dated: August 6, 1998
Accepted and agreed on the above mentioned terms and conditions:
Interfund Resources Ltd.
By: /s/ Alan P. Brooks
_________________________
Name: Alan P. Brooks
Title: President & CEO Dated: August 6, 1998
<PAGE>
EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of August 20,
1998, by and between CONE, ROSE, THATCHER, LIMITED, a Delaware corporation
("CRT"), and AMERICAN TECHNOLOGIES GROUP, INC., a Nevada corporation ("ATG").
R E C I T A L S:
WHEREAS, ATG desires marketing and financial consulting in the areas
described herein (the "Services");
WHEREAS, CRT is capable of providing such consulting services.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, ATG and CRT hereby agree as follows:
1. ENGAGEMENT. Upon the terms, and subject to the terms and conditions,
contained herein, ATG hereby engages CRT on a non-exclusive basis to provide
consulting services and CRT agrees to provide such services as provided herein.
As part of CRT's obligations hereunder, CRT shall
a) Familiarize itself as required with the business, operations,
properties, conditions (financial and otherwise) and prospects of ATG and its
subsidiaries;
b) Assist management in understanding the functioning of the
secondary trading markets for its securities;
c) Consult and assist the Company in developing a general
corporate strategy including strategies to promote shareholder value in the
financial markets;
d) Assist, directly or indirectly, as requested, in the
negotiations of any contracts with third parties arising in connection with
the Services provided hereunder; and
e) Render such other consulting services as ATG may from time to time
request.
2. FEES. As compensation for the services rendered by CRT hereunder, ATG
shall pay CRT a one time fee of 500,000 shares of ATG Common Stock (the
"Shares"). The Shares shall be valued at $0.65 per share. The Shares to be
delivered to CRT hereunder shall be delivered upon registration of the Shares
under the Securities Act of 1933 on Form S-8. ATG shall use its best
<PAGE>
efforts to cause the registration of the Shares as soon as practicable. Upon
written request by CRT and advanced written approval, ATG will reimburse
reasonable travel and other out-of-pocket expenses of CRT incurred in
connection with its performance hereunder.
3. CONFIDENTIAL INFORMATION.
3.1 DEFINITION. CRT recognizes that the relationship created by this
Agreement may involve access by CRT to information of substantial value to ATG,
including, but not limited to, designs, drawings, plans, software, programs,
material and manufacturing specifications, devices, trade secrets, applications,
formulae, know-how, methods, techniques, and processes (whether related to ATG's
patents, or otherwise), as well as financial, business, marketing and product
development information, and customer lists relating to the ATG's products and
operations (collectively, "Confidential Information"), provided that
Confidential Information shall not include information:
a) In the public domain or which subsequently falls into the public
domain;
b) Which CRT can prove was known through a source independent of ATG
prior to any communication by ATG; or
c) Disclosed to CRT in good faith by a third party having a legal
right to do so.
3.2 NON-DISCLOSURE. CRT acknowledges and agrees that ATG represents
that it owns or has the legal right to all right, title and interest in and to
the Confidential Information. CRT further agrees that it shall (i) maintain the
secrecy and confidentiality of all Confidential Information which comes to its
attention, (ii) take all necessary precautions to prevent any disclosure of
Confidential Information by any of its employees or agents, and (iii) during the
term of this Agreement and for so long as Confidential Information does not
enter into the public domain through no act or omission of CRT, neither publish,
disclose nor disseminate any part of such Confidential Information in any
manner, or use the same, without the prior written consent of ATG.
3.3 INJUNCTIVE RELIEF. CRT understands and agrees that the
Confidential Information has special value, the loss of which cannot be
reasonably or adequately compensated in damages or in an action at law, and
therefore, in the event of any breach or violation of the provisions of this
Section 3 by CRT, ATG shall be
2
<PAGE>
entitled to equitable relief by way of injunction without bond and without
the necessity of proving actual damages, in addition to, and not in
limitation of, any other relief or rights to which ATG may be entitled. The
terms and provisions of this Section 3 shall survive any termination or
expiration of this Agreement.
3.4 AFTER TERMINATION CRT shall cease to use any Confidential
Information and shall promptly return to ATG any and all physical, written
and descriptive matter (including all reproductions and copies thereof)
containing Confidential Information upon termination or expiration of this
Agreement.
4. INDEMNIFICATION. The parties hereto shall indemnify, defend and
hold each other and their respective officers, directors employees and agents
(collectively, the "Indemnitees") harmless from and against any and all
claims, actions, lawsuits, demands, costs, liabilities, losses, damages
and/or expenses (including reasonable attorneys' fees and costs of
litigation) made or incurred as a result of such parties performance
hereunder. In connection herewith, ATG represents and warrants to CRT that
all written information provided to CRT pursuant to this Agreement is true
and correct in all material respects.
5. TERM. Subject to the termination provisions of Section 6 hereof,
this Agreement shall expire on July 31, 1999.
6. TERMINATION.
6.1 MANNER. This Agreement may be terminated prior to the
expiration of the Term as follows:
a) By mutual consent of the parties in writing at any time;
b) By either party upon giving written notice to the other
party if such other party is in default of any term or provision hereunder,
and such default is not cured within ten (10) days of written notice of such
default; or
c) By either party on sixty (60) days advanced written notice.
6.2 EFFECT OF TERMINATION Termination of this Agreement shall not
relieve ATG of its obligation to pay to CRT any fees due under the second
sentence of Section 2 or due thereunder in connection with a transaction
initiated by CRT and entered into by ATG within one year of such termination
with any party identified in a writing delivered to ATG by such date.
3
<PAGE>
7. CRT'S REPRESENTATIONS. As a condition to the offer or sale of the
Shares, CRT 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:
7.1 CRT'S KNOWLEDGE. That CRT or its principal(s) have a
preexisting business or personal relationship with ATG, that they are aware
of the business affairs and financial condition of ATG and that they have
such knowledge and experience in businesses in the development stage and
financial matters with respect to companies in businesses similar to ATG
sufficient to enable them to evaluate the risks of the prospective investment
and to make an informed investment decision with respect thereto. CRT
further acknowledges that ATG has made available to it the opportunity to ask
questions and receive answers from ATG concerning the terms and conditions of
the issuance of the Shares and that it could be reasonably assumed to have
the capacity to protect its own interests in connection with such investment.
7.2 SPECULATIVE INVESTMENT. That CRT realizes that the purchase
of the Shares will be a speculative investment and that it is able, without
impairing its financial condition, to hold the Shares for an indefinite
period of time and to suffer a complete loss of the investment.
8. GENERAL PROVISIONS.
8.1 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, and be binding upon, the respective successors and assigns of the
respective parties hereto; PROVIDED, HOWEVER, that neither party hereto shall
have the right to assign any of its rights under this Agreement without the
prior written consent of the other party.
8.2 NOTICES. All notices, requests, demands and other
communications which may be given or are required to be given under this
Agreement shall be in writing and in the English language. All notices shall
be sent by facsimile transmission and confirmed by overnight courier, and
shall be deemed given on the date of such facsimile transmission. All
notices shall be addressed as set forth below:
If to CRT: CONE, ROSE THATCHER LIMITED
117 Sturges Hwy
Westport, CT 06880
Attention: President
4
<PAGE>
If to ATG: AMERICAN TECHNOLOGIES GROUP, INC.
1017 South Mountain Avenue
Monrovia, California 91016
Attention: Lawrence J. Brady
or to such other address as each party hereto may from time to time designate
by written notice to the other party as provided herein.
8.3 GOVERNING LAW. This Agreement has been executed and delivered in,
and shall be governed by and construed in accordance with the laws of the
State of California without regard to its conflict of laws provisions.
8.4 RESOLUTION OF DISPUTES. Any controversy or claim relating to this
Agreement (whether contract, tort, or both) or to the breach of this
Agreement shall be arbitrated by and in accordance with the then existing
commercial arbitration rules of the American Arbitration Association, in Los
Angeles, California. The arbitrator may render a judgment awarding actual
compensatory damages only, and no consequential, incidental, or punitive
damages may be awarded by the arbitrator. Judgment on the award rendered by
such arbitrator may be entered in any court having jurisdiction. Nothing in
this Section 8.4 shall affect ATG's right to bring an action or proceeding
against CRT in the courts of any jurisdiction where the purpose of such
action or proceeding is to seek injunctive relief against CRT. Service of
process in any such action or proceeding brought hereunder may be made by
mailing copies of such process to the address of the parties provided for in
Section 7.2 hereto, provided that nothing in this Section 8.4 shall affect
the right to serve legal process in any other manner permitted by law. In
the event of any action or proceeding to enforce this Agreement, the
successful or prevailing party will be entitled to recover its attorneys'
fees actually incurred and other costs incurred in any such action or
proceeding, in addition to any other relief to which it may be entitled.
8.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the terms or provisions hereof.
8.6 WAIVER AND AMENDMENT. No waiver, amendment, modification or change
of any provision of this Agreement shall be effective unless and until made
in writing and signed by all of the parties hereto. No waiver, forbearance
or failure by any party hereto of its right to enforce any provision of this
Agreement shall constitute a waiver or estoppel of such party's
5
<PAGE>
right to enforce any other provision of this Agreement or a continuing waiver
by such party of compliance with any provision.
8.7 SEVERABILITY. The provisions of this Agreement are intended to be
interpreted and construed in a manner so as to make such provisions valid,
binding and enforceable. In the event that any provision of this Agreement
is determined to be partially or wholly invalid, illegal or unenforceable,
then such provision shall be deemed to be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or,
if such provision cannot be modified or restricted in a manner so as to make
such provision valid, binding and enforceable, then such provision shall be
deemed to be excised from this Agreement and the validity, binding effect and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired in any manner.
8.8 COOPERATION. Each party hereto shall cooperate with the other
party hereto and shall take such further action and shall execute and deliver
such further documents as may be necessary or desirable in order to carry out
the provisions and purposes of this Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
8.10 ENTIRE AGREEMENT. This Agreement (including the exhibits and
schedules hereto, each of which is incorporated herein and made a part of
this Agreement) constitutes the entire agreement and understanding of the
parties hereto and terminates and supersedes any and all prior agreements,
arrangements and understandings, both oral and written, express or implied,
between the parties hereto concerning the subjec
t matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"ATG" "CRT"
AMERICAN TECHNOLOGIES GROUP INC. CONE, ROSE THATCHER LIMITED
By: /s/ Lawrence J. Brady By: /s/ Albert Cone
_________________________ _________________________
Name: Lawrence J. Brady Name: Albert Cone
Its: Chairman Its: Authorized Signatory
6
<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 10, 1997 included in the Company's Form 10-K for the year ended July
31, 1997 and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN
Los Angeles, California
August 26, 1998
