<PAGE>
As filed with the Securities and Exchange Commission on April 7, 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]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
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, $.001 par value 104,000 shares $1.56 $162,240 $48
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</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>
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, 1997 filed with the Securities and Exchange Commission (the
"Commission") on November 13, 1997 (the "ATG 10-K").
(b) Amendment Number 1 to the ATG 10-K on Form 10-KSB/A filed with
the Commission on November 28, 1997.
(c) Amendment Number 2 to the ATG 10-K on Form 10-KSB/A filed with
the Commission on December 30, 1997.
(d) The Registrant's Current Report on Form 8-K filed with the
Commission on October 31, 1997.
(e) The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended January 31, 1998 filed with the Commission on March 17, 1998.
(f) 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.
(f) All other reports subsequently filed by Registrant after the date
of this Registration Statement pursuant to Sections 13(a) or 15(d) of the
Exchange Act 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.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
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 March 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.
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
II-2
<PAGE>
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 or 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
(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.
II-3
<PAGE>
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
was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
II-4
<PAGE>
"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."
Item 7. Exemption From Registration Claimed.
Not applicable.
II-5
<PAGE>
Item 8. Exhibits.
Exhibit
Numbers
-------
5.1 Opinion of John M. Dab.
10.1 Consulting Agreement by and between Registrant and M & M Group,
Inc. dated September 9, 1997.
10.2 Consulting Agreement by and between Registrant and Francis T.
Phalen dated August 29, 1997.
10.3 Consulting Agreement between Registrant and C.C.R.I. Corporation,
dated December 2, 1996.*
10.4 Consultant Warrant Agreement between the Registrant and
C.C.R.I. Corporation, dated December 2, 1996.*
24.1 Consent of John M. Dab (included in Exhibit 5.1)
24.2 Consent of Arthur Andersen LLP.
_______________
* Previously filed as an exhibit to the Registration Statement on Form S-8
filed with the Commission on July 11, 1997.
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.
II-6
<PAGE>
(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) 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 6th day of
April, 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.
Signature Title Date
--------- ----- ----
/s/ LAWRENCE J. BRADY Chairman of the Board, April 6, 1998
- ----------------------- Chief Executive Officer
LAWRENCE J. BRADY
/s/ HAROLD RAPP Chief Operating Officer April 6, 1998
- ----------------------- Treasurer (Principal) Financial
HAROLD RAPP and Accounting Officer)
/s/ SHUI YIN LO Director of Research and April 6, 1998
- ----------------------- Development and a Director
SHUI YIN LO
/s/ ALFRED H. KINGON Director April 6, 1998
- -----------------------
ALFRED H. KINGON
/s/ WILLIAM ODOM Director April 6, 1998
- -----------------------
WILLIAM ODOM
/s/ TERRY WACHSNER Director April 6, 1998
- -----------------------
TERRY WACHSNER
II-8
<PAGE>
EXHIBIT INDEX
Page
Exhibit ----
Number
------
5.1 Opinion of John M. Dab.
10.1 Consulting Agreement by and between Registrant and M & M Group, Inc.
dated September 9, 1997.
10.2 Consulting Agreement by and between Registrant and Francis T. Phalen
dated August 29, 1997.
10.3 Consulting Agreement between Registrant and C.C.R.I. Corporation,
dated December 2, 1996.*
10.4 Consultant Warrant Agreement between the Registrant and
C.C.R.I. Corporation, dated December 2, 1996.*
24.1 Consent of John M. Dab (included in Exhibit 5.1)
24.2 Consent of Arthur Andersen LLP.
_______________
* Previously filed as an exhibit to the Registration Statement on Form S-8
filed with the Commission on July 11, 1997.
II-9
<PAGE>
EXHIBIT 5.1
April 6, 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
April 7, 1998 relating to the issuance and sale of up to 104,000 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, and the exercise price for the
portion of the Shares which are issuable upon exercise of an option and warrant
to purchase an aggregate of 69,000 shares of Common Stock has been paid, 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
M & M Group 824 Moraga Drive
Los Angeles, CA 90049
Phone 476-0773
Fax 476-3822
September 9, 1997
Consulting Agreement
This agreement ("Agreement") is entered into this 9th day of September, by and
between American Technologies Group, Inc. (the "Company") and M & M Group, Inc.
("Consultant").
WHEREAS, Consultant has experience and expertise in corporate finance, financial
public relations, and knowledge in the development of secondary trading markets
and
WHEREAS, the Company desired to engage Consultant to assist in development of
secondary trading markets and for advise on financial public relations and
investment banking matters.
NOW THEREFORE, the Company and Consultant agree as follows:
1. Consultant's Services
Consultant will provide the Company consulting services in connection with
the following matters:
a. Develop additional Broker relations program.
b. Consult with the Company about its present and future securities
structure.
c. Provide guidance for full registrations on N.A.S.D. or any other
Exchange the Company approves.
d. Participate and coordinate road trips for Company executives to
provide introductions and information to brokers, investment bankers,
financial analysts, and money managers about the Company.
2. Compensation
In consideration of the Consultant's services, the Company shall compensate
the Consultant as follows:
a. Term of Agreement shall be for 6 (Six) months.
$15,000.00 per month for the first two months.
$12,500.00 per month for the second two months.
$10,000.00 per month for the third two months.
The above can be paid with S-8 stock at an average price of the last
10 (Ten) days of trading per month.
<PAGE>
An option to purchase 100,000 options at $3.00 vested at 25% every 6
(Six) weeks, until 100% has been achieved.
b. Reimbursement of reasonable out of pocket expenses inquired by
Consultant in performance of the services contemplated by this
Agreement, to be preapproved by the Company's CEO.
3. Indemnification
The Company agrees to indemnify and hold harmless Consultant and their
agents and employees against any loses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions, suits or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material, or arising out of or based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading and will reimburse Consultant or any other such person for any
legal or other expenses reasonably incurred by Consultant or any such other
person in connection with investigation or defending any such loss, claim,
damage, liability, or action, suite or proceeding provided, however that
the Company will not be liable in any such case tot the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in, or omission or alleged
omissions reliance upon and in conformity with written information
furnished to the Company by Consultant specifically for use in preparations
thereof. This indemnity agreement will be in addition to any liability
which the company may otherwise have.
Consultant will indemnify and held harmless the Company, each of its
directors, each of its officers, or persons, if any who control the Company
within the meaning of the Act against any losses claims, damages, or
liabilities to which the Company or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions, suits, or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact that may arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein
not misleading in each case to the extent, but only to the extent, that
such untrue statement or a alleged untrue statement or omission or in
reliance upon and in conformity with written information furnished to the
Company by the Consultant specifically for use in the preparation thereof
and will reimburse any legal or other expense reasonably incurred by the
Company or any such other person in connection with investigating or
defending any such loss, claim, damage, liability, or action, suit or
proceeding. This indemnity agreement will be in addition to any liability
which Consultant may have.
Promptly after receipt by a indemnified party under this Section of notice
of the commencement of any action, suit or proceeding, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any
<PAGE>
indemnified party otherwise than under this Section.. In case any such
action, suit or proceeding is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and to the
extent may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party and after notice from the indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
4. Termination
This Agreement may be terminated by mutual agreement of the parties by
written notice to the other party. The provisions on Indemnification shall
survive any termination of the Agreement by either party.
5. Complete Agreement: Modification
This Agreement constitutes the entire understanding of the parties with
respect to the matters it purports to cover and no promise, representation,
or warranty other than those set out herein, shall be of any force or
effect. No modification or amendment of this Agreement shall be of any
force of effect unless reduced to writing, signed by all the record
shareholders and deposited with the Corporation.
6. Descriptive Headings
The Descriptive headings of the Agreement are for convenience only and
shall not control or affect the meaning or construction of any provision of
this Agreement.
7. Counterparts
This Agreement may be executed in any number of counterparts and each such
counterpart hereof shall be deemed to be an original instrument, but all
such counterpart together shall constitute but one Agreement.
8. Governing Law and Venue
The interpretation and construction of this Agreement shall be governed by
the laws of the State of California for contracts made and to be performed
in California. All obligations will be in Los Angeles, California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above herein.
By:/s/ William H. Marches By:/s/ John R. Collins
---------------------- ---------------------------------
M & M Group American Technologies Group, Inc.
<PAGE>
EXHIBIT 10.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is dated as of August 29, 1997
and entered into by and between AMERICAN TECHNOLOGIES GROUP INC., a Nevada
corporation ("ATG"), and FRANCIS T. PHALEN ("Phalen"), and is made with respect
to the following:
A. WHEREAS, ATG desires to obtain the services of Phalen to provide
certain financial and other general services;
B. WHEREAS, Phalen 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. Phalen shall provide consulting services to ATG
as described above.
2. TERM. This Agreement shall commence on the date hereof and shall
expire on November 30, 1997 unless terminated prior thereto upon fifteen (15)
days advance written notice by either party for any reason or no reason.
3. COMPENSATION. As full compensation for all services to be performed by
Phalen ATG hereby grants to Phalen the right and option (the "Option") to
purchase, on the terms and conditions hereinafter set forth, an aggregate of
twenty-five thousand (25,000) shares of the common stock of ATG (the "Option
Shares"). The exercise price (the "Exercise Price") of the Option Shares is
$2.63 per share, payable in cash or by the cancellation of a number of the
Options equal in value to the Exercise Price of the shares to be acquired.
4. TIME AND MANNER OF OPTION EXERCISE: The right to exercise the Option
as to (i) eight thousand (8,000) shares of Common Stock shall vest on September
30, 1997, (ii) eight thousand (8,000) shares of Common Stock shall vest on
October 31, 1997 and (iii) nine thousand (9,000) shares of Common Stock shall
vest on November 30, 1997 and Phalen shall have the right to purchase from ATG
the vested Option Shares at any time and from time to time until August 31,
2002. The purchase shall be made by delivery to ATG of a notice of exercise
accompanied by a check in the amount of the aggregate Exercise Price or by
cashless exercise through the cancellation of Options equal in value to the
exercise price of the shares to be acquired. Promptly upon
<PAGE>
receipt of such material, ATG shall cause the delivery to Phalen of an ATG stock
certificate representing the Option Shares.
5. OPTIONEE'S REPRESENTATIONS:
Phalen 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 upon exercise of the Option:
5.1 INVESTMENT INTENT. that Phalen is acquiring the Option, and if
Phalen exercises the Option will acquire the Option Shares, for Phalen's own
account and not with a view to their resale or distribution and that Phalen is
prepared to hold the Option and the Option Shares, if acquired, for an
indefinite period and has no present intention to sell, distribute or grant any
participating interests in the Option or the Option Shares, if acquired. Phalen
hereby acknowledges the fact that the Option Shares will not be registered under
the Securities Act of 1933, as amended (the "1933 Act") or the California
Corporations Code.
5.2 RESTRICTED SECURITIES. that Phalen has been informed that the
Option and the Option 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, Phalen hereby
acknowledges that Phalen is prepared to hold the Option and the Option Shares
for an indefinite period of time.
5.3 PHALEN KNOWLEDGE. that Phalen has a preexisting business or
personal relationship with ATG, that he is aware of the business affairs and
financial condition of ATG and that Phalen has such knowledge and experience in
business and financial matters with respect to companies in businesses similar
to ATG to enable Phalen to evaluate the risks of the prospective investment and
to make an informed investment decision with respect thereto. Phalen further
acknowledges that ATG has made available to Phalen the opportunity to ask
questions and receive answers from ATG concerning the terms and conditions of
the issuance of the Option and the Option Shares and that Phalen could be
reasonably assumed to have the capacity to protect his own interests in
connection with such investment.
5.4 SPECULATIVE INVESTMENT. that Phalen realizes that his purchase
of the Option and the Option Shares will be a speculative investment and that
Phalen is able, without impairing his financial condition, to hold the Option
and the Option Shares for an indefinite period of time and to suffer a complete
loss of his investment.
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6. NO TRANSFER: Phalen shall not transfer, encumber, alienate or dispose,
by gift or otherwise, all or any part of the Option or Option Shares, except as
may be permitted by law.
7. RESTRICTIVE LEGEND: In order to reflect the restrictions on
disposition of the Option 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.
8. ADJUSTMENT IN OPTION SHARES.
8.1 STOCK SPLIT. In the event any change is made to the Common Stock
issuable hereunder by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration, then appropriate adjustments will be made to
(i) the total number of Optioned Shares subject to the Option and (ii) the then
existing Exercise Price payable per Option Share in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder.
8.2 MERGER. If the Company is the surviving entity in any merger or
other business combination, then the Option, if outstanding immediately after
such merger or other business combination shall be appropriately adjusted to
apply and pertain to the number and class of securities to which Phalen
immediately prior to such merger or other business combination would have been
entitled to receive in the consummation of such merger or other business
combination.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not
have any of the rights of a shareholder with respect to the Optioned Shares
until such individual shall have exercised the Option and paid the Exercise
Price in accordance with this Agreement.
10. REGISTRATION RIGHTS. If at any time Phalen desires to exercise the
Option between December 1, 1997 and June 1, 1998, Phalen shall so notify ATG in
writing and as soon as practicable thereafter ATG shall file a registration
statement on Form S-8 or other applicable form with the Securities and Exchange
Commission
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covering the Shares, at Phalen's expense which shall not exceed five Thousand
Dollars ($5,000).
11. INDEPENDENT CONTRACTOR. The parties acknowledge that this Agreement
does not create an employee/employer relationship and Phalen shall be acting as
an independent contractor of ATG.
12 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
Phalen: FRANCIS T. PHALEN
19620 Superior St.
Northridge, CA 91324
Each of the parties hereto may change its address for purposes of this
Section 12 by giving written notice of such change in the manner provided for in
this Section 12.
13. 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.
14. 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.
15. 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
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terminated by the mutual consent of the parties hereto and shall be of no
further force or effect.
16. ASSIGNMENT. This Agreement is not assignable but shall be binding
upon and shall inure to the benefit of the successors of each party hereto.
17. 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.
18. NON-COMPETITION. During the term hereof, Phalen 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.
19. 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.
/s/ Francis T. Phalen
- ---------------------
Francis T. Phalen
American Technologies Group, Inc.,
a Nevada corporation
By: /s/ John Collins
-----------------
John Collins
Chief Executive Officer
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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 LLP
Los Angeles, California
April 7, 1998
