UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)*
Alternative Technology Resources, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
02145H 10 4
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(CUSIP Number)
James W. Cameron, Jr.
629 J Street
Sacramento, California 95814
Tel: (916) 231-0400
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 30, 2003
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 2 of 6
CUSIP No. 02145H 10 4
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1. NAMES OF REPORTING PERSONS James W. Cameron, Jr.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS (SEE INSTRUCTIONS): PF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E): [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION: United States
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7. SOLE VOTING POWER: 7,217,146
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NUMBER OF SHARES
BENEFICIALLY OWNED 8. SHARED VOTING POWER: 0
BY EACH REPORTING --------------------------------------------------------
PERSON WITH
9. SOLE DISPOSITIVE POWER: 7,217,146
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10. SHARED DISPOSITIVE POWER: 0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 7,217,146
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS): [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.93%
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14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): IN
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Page 3 of 6
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to shares of Common Stock, par value
$0.01 (the "Shares") of Alternative Technology Resources, Inc., a Delaware
corporation ("Issuer"). The address of the Issuer's principal executive office
is Alternative Technology Resources, Inc., 629 J Street, Sacramento, California
95814.
ITEM 2. IDENTITY AND BACKGROUND
a. The person filing this statement is James W. Cameron, Jr. (the
"Reporting Person").
b. The business address of the Reporting Person is 629 J Street,
Sacramento, California 95814.
c. The Reporting Person's principal occupation is as the chief executive
officer of Cameron and Associates, a private consulting [and investment]
company.
d. The Reporting Person, during the past five (5) years, has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
e. The Reporting Person, during the past five (5) years, has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, and as a result of such proceeding, was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to United States federal or state securities
laws or finding any violation with respect to such laws.
f. The Reporting person is a U.S. citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
All Shares, options and warrants to purchase Shares were purchased with the
Reporting Person's own funds or granted as compensation for his services and the
services of Cameron and Associate provided to the Issuer. The Reporting Person
did not acquire beneficial ownership of any of the Shares with borrowed funds.
ITEM 4. PURPOSE OF TRANSACTION
On June 30, 2003, the Reporting Person resigned as a director and chief
financial officer of the Issuer for personal reasons and not with a view to
change the present board of directors or management of the Issuer. As a result
of the Reporting Person's resignation, his options to acquire 75,000 Shares
expired on September 30, 2003 under the terms of the respective option
agreements.
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Page 4 of 6
On July 18, 2003, the Reporting Person forgave $556,609 in back rents in
exchange for certain services, supplies and equipments as further described in
the Sixth Addendum to Lease attached hereto as Exhibit A.
On August 14, 2003, the Reporting Person gifted 490,000 Shares to several
donees.
On August 15, 2003, in a series of privately-negotiated transactions
pursuant to the terms of the Stock Purchase Agreement in the form substantially
attached as Exhibit B, the Reporting Person sold to certain accredited investors
an aggregate of 29,502,495 Shares for $0.035 per share.
On August 15, 2003, in a privately-negotiated transaction pursuant to the
terms of the Unit Purchase Agreement in the form substantially attached as
Exhibit C, the Reporting Person sold to a director of the Issuer an aggregate of
2,857,142 Shares for $0.035 per share.
On August 15, 2003, pursuant to the terms of the Termination of Option
Agreement, attached hereto as Exhibit D, the Reporting Person and McCormick ATEK
Investments LLC ("McCormick LLC") mutually agreed, without value, to cancel the
obligation to require the Reporting Person to sell 6,000,000 Shares owned by the
Reporting Person at the purchase price of $3.625 per share to McCormick LLC upon
exercise. At the time of the cancellation, the closing price of the Shares as
reported on the OTC-Bulletin Board was $0.09.
On August 15, 2003, the Reporting Person acquired 1,232 shares of
non-convertible Series A Preferred Stock, par value $6.00, at $1,000 per share.
The terms of the Issuer's Series A Preferred Stock is attached as Exhibit E, and
in general provide for a dividend preference of $0.50 per share if and when
declared by the Issuer's board of directors and a liquidation preference of
$6.00 per share. The shares of Series A Preferred Stock have no voting rights,
except as required by law, and are not convertible into any securities of the
Issuer.
As a result of the above-described transaction, the Reporting Person
reduced his beneficially ownership in the Shares from 40,141,783 Shares
(including options and warrants to purchase 250,000 Shares) to 7,217,146 Shares
(including options and warrants to purchase 175,000 Shares). The Reporting
Person intends to hold the Shares, and the options and warrants for the Shares,
for investment purposes and in the future may consider the following future
courses of action: (i) continuing to hold the Shares for investment; (ii)
disposing of all or a portion of the Shares in open market sales or in
privately-negotiated transactions; (iii) acquiring additional Shares in the open
market or in privately-negotiated transactions; or (iv) hedging transactions
(other than short sales) with respect to the Shares. The Reporting Person has
not as yet determined which of the courses of action specified in this paragraph
he may ultimately take. The Reporting Person's future actions with regard to
this investment are dependent on his evaluation of a variety of circumstances
affecting the Issuer in the future, including the market price of the Shares,
the Issuer's prospects and the Reporting Person's portfolio.
Except as set forth above, the Reporting Person has no current plans or
proposals which relate to or would result in any of the following: (i) an
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Page 5 of 6
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (ii) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (iii) any change in the present board of directors or management
of the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board, except to add
additional directors as needed to comply with NASD Rules, SEC Rules and
Regulations or the Sarbanes-Oxley Act; (iv) any material change in the present
capitalization or dividend policy of the Issuer; (v) any other material change
in the Issuer's business or corporate structure; (vi) changes in the Issuer's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person; (vii) causing a
class of securities of the Issuer to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (viii) a class of equity
securities of the Issuer becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended,
or (ix) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As a result of the transaction described in Item 4 above, the Reporting
Person now beneficially owns 7,217,146 Shares or 9.93% of the outstanding Shares
(includes 7,042,146 Shares, options to purchase 25,000 Shares and warrants to
purchase 150,000 Shares).
(b) As of August 15, 2003, the Reporting Person has sole power to vote or
direct the vote and dispose or direct the disposition of 7,042,146 Shares.
(c) The Reporting Person had the following transaction in the Shares within
the last sixty (60) days:
On August 14, 2003, the Reporting Person gifted 490,000 Shares to several
donees.
On August 15, 2003, in a series of privately-negotiated transactions
pursuant to the terms of the Stock Purchase Agreement in the form substantially
attached as Exhibit B, the Reporting Person sold to certain accredited investors
an aggregate of 29,502,495 Shares for $0.035 per share.
On August 15, 2003, in a privately-negotiated transaction pursuant to the
terms of the Unit Purchase Agreement in the form substantially attached as
Exhibit C, the Reporting Person sold to a director of the Issuer an aggregate of
2,857,142 Shares for $0.035 per share.
On August 15, 2003, pursuant to the terms of the Termination of Option
Agreement, attached hereto as Exhibit D, the Reporting Person and McCormick LLC
mutually agreed, without value, to cancel the obligation to require the
Reporting Person to sell 6,000,000 Shares owned by the Reporting Person at the
purchase price of $3.625 per share to McCormick LLC upon exercise.
(d) Not applicable.
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Page 6 of 6
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The Reporting Person entered into an option agreement on August 1, 2000, as
amended on September 17, 2001, with Jeffrey S. McCormick, the Issuer's director
and former chief executive officer, whereby Mr. McCormick had the right to
purchase 6,000,000 Shares from the Reporting Person for $3.625 per Share. On
June 26, 2002, Mr. McCormick assigned his interest under the option agreement to
McCormick LLC, a company controlled by Mr. McCormick. On August 15, 2003, the
option agreement was cancelled and neither party received any value for the
cancellation.
As of the date of this Schedule 13D, the Reporting Person is not a party to
any contract, arrangement, understanding or relationship (legal or otherwise)
with any person with respect to any securities of the Issuer, including, but not
limited to, any agreement concerning (i) transfer or voting of any securities of
the Issuer, (ii) finder's fees, (iii) joint venture, (iv) loan or option
arrangements, (v) puts or calls, (vi) guarantees of profits, (vii) divisions of
profits or losses, or (viii) the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit "A" Sixth Addendum to Lease
Exhibit "B" Form of Stock Purchase Agreement
Exhibit "C" Form of Unit Purchase Agreement
Exhibit "D" Termination of Option Agreement
Exhibit "E" Certificate of Designation - Series A Preferred Stock
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: October 8, 2003 /s/ James W. Cameron, Jr.
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James W. Cameron, Jr., an Individual
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Exhibit A
SIXTH ADDENDUM TO LEASE
The sixth addendum to Lease (Sixth Addendum) is made between James W.
Cameron, Jr., an unmarried man (Lessor) and Alternative Technology Resources,
Inc., (ATR), previously known as 3Net Systems, Inc., a Delaware Corporation,
(Lessee), to be a part of that certain Lease, and any addendums thereto (the
Lease), dated November 7, 1995 between Lessor and Lessee. Lessor and Lessee
agree that, not withstanding anything to the contrary in the Lease, the Lease is
hereby modified as follows;
1. Effective July 1, 2003, paragraph 2(k) of the Lease is modified to read
approximately 4,827 square feet, located in the basement of the building.
A. Operations area 3,153 sf.
B. Corridor a) Mall Machine area 480 sf b) Storage area 906 sf
C. Telecommunications area 96 sf
D. Server Room 192 sf
2. Effective July 1, 2003 paragraphs 2(a) and (j) of the Lease are modified to
read: Base Rent shall not exceed the previous calendar years cash operating
expense which is $.786 per sf for 2002. Monthly Installments of Base Rent
shall be Three Thousand Seven Hundred Ninety Four and no/100 Dollars
($3,794.00).
3. Lessee shall be responsible for consumables and janitorial expense.
4. All accrued and unpaid rent in the sum of Five Hundred Fifty Nine Thousand,
Two Hundred Nineteen Dollars and 62/100 ($559,219.62) to June 30, 2003,
shall be forgiven.
5. In consideration for forgiven unpaid rent, Lessee shall provide, during the
term of the Lease, any extensions thereto, including month to month, the
following services, supplies and equipment at Lessee's sole cost and
expense to Lessor:
1. Internet access to all employees of Cameron &. Associates;
2. PC software and hardware support including surplus
replacement parts;
3. Ownership to the surplus equipment attached hereto as
Exhibit "A"; and
4. Use of telecommunications and server room.
6. Rent shall be modified each February 1st to reflect the actual cash
operating expense of the previous calendar year.
7. All other terms and conditions of the Lease, not inconsistent herewith, are
incorporated herein by reference as though fully set forth and remain in
full force and effect unless modified by the Sixth Addendum to Lease.
AGREED AND ACCEPTED:
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LESSOR: LESSEE:
JAMES W. CAMERON, JR. Alternative Technology Resources, Inc.
A Delaware Corporation
By: /s/James W. Cameron, Jr. By: /s/Mark W. Rieger
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Printed Printed
Name: James W. Cameron, Jr. Name: Mark Rieger
Title: Owner Title: Chief Executive Officer
Date: 7/18/03 Date: 7/18/03
2
Exhibit B
FORM OF
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") dated as of ______, 2003,
by and between James W. Cameron, Jr. ("Seller"), an individual and an affiliate
of Alternative Technology Resources, Inc. (the "Company") and _______________
("Purchaser").
RECITALS
WHEREAS, as of July 15, 2003, the Seller is the owner and holder of record
of Thirty-Nine Million Eight Hundred Ninety-One Thousand Seven Hundred
Eighty-Three (39,891,783) shares of the issued and outstanding shares of the
Company's common stock ("Common Stock") of which Six Million (6,000,000) shares
of Common Stock are subject to an option; and
WHEREAS, the Purchaser desires to purchase ( ) shares of said Common Stock
from Seller, hereinafter referred to as the "Seller's Stock", and the Seller
desires to sell, or cause to be sold, all of the Seller's Stock upon the terms
and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, and in order to consummate the
purchase and sale of the Seller's Stock aforementioned, the parties hereby agree
as follows:
1. PURCHASE OF SELLER'S STOCK
1.1 PURCHASE AND PAYMENT. At the Closing (as hereinafter defined), the
Purchaser hereby purchases from the Seller, and the Seller hereby
sells and transfers to the Purchaser the Seller's Stock at a purchase
price of $0.035 per share for a total of _________________ Dollars
($_________ ) (the "Purchase Price").
1.2 CLOSING. Subject to the terms and conditions of this Agreement, the
closing of this Agreement (the "Closing") will take place at 629 J
Street, Sacramento, California at 1:00 p.m. (Pacific Standard Time),
on ________, 2003 ("Closing Date"), or at such other place, time and
date as the parties may agree to in writing.
1.3 EFFECT AT CLOSING.
(a) At the Closing, the Purchaser will deliver the Purchase Price to
the Seller in the form of a check made payable to the Seller or by wire
transfer to the following account:
1
(b) Upon receipt of the Purchase Price as provided by Section 1.3(a),
the Seller will deliver the Company's stock transfer agent Computershare
Trust Company, Inc., located at 12039 West Alameda Parkway Z-2, Lakewood,
Colorado, 80228, mailing address Post Office Box 1596, Denver Colorado
8020, the following: (i) the Company's stock certificate representing the
Seller's Stock, (ii) an executed stock power, and (iii) an instruction
letter to transfer the Seller's Stock into the name of the Purchaser.
2. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Purchaser hereby
represents, warrants and confirms the following:
(a) POWER AND AUTHORITY. The Purchaser hereby represents and warrants that
he has full power and authority to execute and deliver this Agreement and to
perform its obligation under this Agreement.
(b) COMPLIANCE WITH SECURITIES LAWS. The Purchaser understands the Seller's
Stock are not registered with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities Act") or qualified
under the laws of any state, but instead sold under an exemption or exemptions
from the registration and qualification requirements of the Securities Act and
blue sky laws which impose certain restrictions on the Purchaser's ability to
transfer the Seller's Stock. The Purchaser understands that he may not transfer
any Seller's Stock unless such Seller's Stock are registered under the
Securities Act or qualified under blue sky laws or unless, in the opinion of
counsel to the Company, exemptions from such registration and qualification
requirements are available. The Purchaser understands that only the Company may
file a registration or qualification statement with the SEC or any state. The
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit the Purchaser to transfer
all or any of the Seller's Stock in the amounts or at the times proposed by the
Purchaser.
(c) RESTRICTIONS ON TRANSFER. The Purchaser understands that he is
purchasing the Seller's Stock from an affiliate of the Company and will have a
restricted stock legend placed on his stock certificate. In order to reflect the
restrictions on disposition of the Seller's Stock, the share certificates to be
issued to the Purchaser for the Seller's Stock may be endorsed with restrictive
legends, including a legend similar to the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT FOR DISTRIBUTION OR RESALE. THEY MAY NOT BE MORTGAGED, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 AND OTHER
APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE SECURITIES
LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE HOLDER'S COST
TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT REGISTRATION UNDER
2
APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE ACCEPTABLE TO THE
COMPANY'S COUNSEL.
(d) RULE 144. The Purchaser understands that Rule 144 promulgated by the
SEC, which provides a safe harbor for certain limited resales of unregistered
securities, is not presently available with respect to the Seller's Stock. The
Purchaser understands that use of the Rule 144 resale safe harbor requires that
the Seller's Stock be held for a minimum of one (1) year, and in certain cases
two (2) years, after they have been purchased and paid for (within the meaning
of Rule 144). The Purchaser understands that the Seller provides no assurance
that the requirements of Rule 144 will be met, or that the Seller's Stock will
ever be saleable.
(e) PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. The Purchaser is purchasing
the Seller's Stock for the Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Seller's Stock within the meaning of the Securities Act. The Purchaser has no
present intention of selling or otherwise disposing of all or any portion of the
Seller's Stock.
(f) CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. The Purchaser acknowledges
that he has executed the Confidentiality and Non-Disclosure Agreement in
substantially the form attached hereto as Exhibit A with the Company.
(g) ACCESS TO INFORMATION. Purchaser has had access to all information
regarding the Seller as well as the Company and the Company's present and
prospective business, assets, liabilities and financial condition that Purchaser
reasonably considers important in making the decision to purchase the Seller's
Stock. The Purchaser further represents that he had the opportunity to ask
questions and receive answers from the Seller and the Company concerning the
business and financial condition of the Company, and the Purchaser has received
to his satisfaction, such information about the business and financial condition
of the Company as he has requested.
(h) INVESTMENT EXPERIENCE. The Purchaser represents that it is experienced
in evaluating and investing in securities of companies such as the Company,
acknowledges that it is able to fend for itself, can bear the economic risk of
the investment including the risk that it may lose its entire investment, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Seller's
Stock. In addition, the Purchaser is fully aware of: (i) the highly speculative
nature of the investment in the Seller's Stock; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Seller's Stock and the restrictions
on transferability of the Seller's Stock; and (iv) the qualifications and
backgrounds of the management of the Company.
(i) ACCREDITED INVESTOR. The Purchaser is an "accredited investor," as that
term is defined in Rule 501 of Regulation D of the Securities Act of 1933.
(j) COMPLIANCE WITH SECURITIES LAWS. Purchaser understands that, in
reliance upon the representations and warranties made by Purchaser herein, the
3
Seller's Stock are not being registered with the SEC under the Securities Act or
being qualified under applicable state securities laws, but instead are being
transferred under an exemption or exemptions therefrom.
(k) NO GENERAL SOLICITATION. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Seller's Stock.
(l) BROKERAGE COMMISSIONS. Purchaser acknowledges that no brokerage
commissions or other fees were paid by Purchaser in connection with this
transaction.
(m) VALUATION OF SELLER'S STOCK. Purchaser and Seller have determined the
value of the Seller's Stock based upon arm's length negotiations. Purchaser
understands that the Seller can give no assurances that Purchase Price is in
fact the fair market value of the Seller's Stock.
3. THE SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller hereby represents,
warrants and confirms the following:
(a) POWER AND AUTHORITY. The Purchaser hereby represents and warrants that
he has full power and authority to execute and deliver this Agreement and to
perform its obligation under this Agreement.
(b) OWNERSHIP OF SELLER'S STOCK. The Seller originally purchased the
Seller's Stock in a private transaction from the Company more than two (2) years
ago. The Seller holds of record and owns beneficially all of the Seller's Stock,
free and clear of any restrictions on transfer, taxes, security interests,
options, warrants, purchase rights, contracts, commitments, equities, claims and
demands, except for a non-qualified option to Mr. Jeffrey McCormick, a director
of the Company, to purchase Six Million (6,000,000) shares of Common Stock owned
by the Seller which are not part of the Seller's Stock. Seller is not a party to
any option, warrant, purchase right, pledge agreement or other contract or
commitment that could require the Seller to sell, transfer or otherwise dispose
of the Seller's Stock except for a non-qualified option to Mr. Jeffrey
McCormick, a director of the Company, to purchase Six Million (6,000,000) shares
of Common Stock owned by the Seller which are not part of the Seller's Stock.
The Seller is not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of the Seller's Stock. Upon the
Purchaser's purchase of the Seller's Stock under this Agreement, the Purchaser
shall obtain and be fully vested in record and beneficial ownership of the
Seller's Stock, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), taxes,
security interests, options, warrants, purchase rights, contracts, commitments,
equities, claims and demands.
(c) CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. The Seller acknowledges
that he has executed the Confidentiality and Non-Disclosure Agreement in
substantially the form attached hereto as EXHIBIT A with the Company.
(d) ACCESS TO INFORMATION. The Seller represents that he is an affiliate of
the Company and has had access to all information regarding the Company and the
Company's present and prospective business, assets, liabilities and financial
4
condition that the Seller reasonably considers important in making the decision
to sell the Seller's Stock. The Seller further represents that he had the
opportunity to ask questions and receive answers from the Company concerning the
business and financial condition of the Company, and the Seller has received to
his satisfaction, such information about the business and financial condition of
the Company as he has requested.
(e) RELIANCE. The Seller acknowledges and agrees that the decision to sell
all the Seller's Stock pursuant to this Agreement is an independent business
decision and that Seller is not relying upon Purchaser's representations (except
those made in Section 2 above), valuations, or other information provided by
Purchaser.
(f) NO BROKERS. Seller has not, directly or indirectly, in connection with
the transactions contemplated hereby, (i) employed any broker, finder or agent,
or (ii) agreed to pay or incur any obligation to pay any broker's or finder's
fee or similar fee or compensation.
(g) NO GENERAL SOLICITATION. At no time has Seller made any form of general
advertising or solicitation in connection with the offer, sale and purchase of
the Seller's Stock.
4. MISCELLANEOUS PROVISIONS
4.1 ENTIRE CONTRACT. This Agreement constitutes the entire contract between
the parties hereto with regard to the subject matter hereof. The parties
acknowledge that this Agreement supersedes all previous understandings, written
or oral, with respect to the subject matter hereof.
4.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by the Seller and the Purchaser herein shall
survive the execution of this Agreement and the sale and delivery of the
Seller's Stock.
4.3 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such state without resorting to that
state's conflict-of-laws rules.
4.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Seller and the Purchaser and the legal
representatives, heirs, legatees, distributees, assigns and transferees by
operation of law or otherwise, whether or not any such person shall have become
a party to this Agreement and have agreed in writing to join herein and be bound
by the terms and conditions hereof.
4.5 SEVERABILITY. In the event that any of the provisions of this Agreement
shall be held by a court or other tribunal of competent jurisdiction to be
illegal, invalid or unenforceable, such provisions shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect.
5
4.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first indicated above.
SELLER
------------------------------------
James W. Cameron, Jr., an individual
Address: 629 J Street
Sacramento, CA 95814
PURCHASER
-----------------------------------
Address:
--------------------------
--------------------------
--------------------------
6
Exhibit c
FORM OF UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT (the "Agreement") dated as of _____, 2003, by
and between James W. Cameron, Jr. ("Seller"), an individual and an affiliate of
Alternative Technology Resources, Inc. (the "Company") and ____________ (the
"Purchaser").
RECITALS
WHEREAS, as of July 15, 2003, the Seller is the owner and holder of record
of (i) Thirty-Nine Million Eight Hundred Ninety-One Thousand Seven Hundred
Eighty-Three (39,891,783) shares of the issued and outstanding shares of the
Company's common stock ("Common Stock") of which Six Million (6,000,000) shares
of Common Stock are subject to an option, (ii) an unsecured promissory notes set
forth in EXHIBIT A for an aggregate principal amount of _________________
($________) (the "Note"), and (iii) the Company's accrued preferred stock
dividends in the amount of $__________ (the "Dividends"); and
WHEREAS, the Purchaser desires to purchase ________________ shares of said
Common Stock from Seller, hereinafter referred to as the "Seller's Stock", the
Notes and the Dividends, and the Seller desires to sell, or cause to be sold,
all of the Seller's Stock, the Notes and the Dividends upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, and in order to consummate the
purchase and sale of the Seller's Stock, the Notes and the Dividends
aforementioned, the parties hereby agree as follows:
1. PURCHASE OF THE SELLER'S STOCK. At the Closing (as hereinafter defined), the
Purchaser hereby purchases from the Seller, and the Seller hereby sells and
transfers to the Purchaser the Seller's Stock at a purchase price of $0.035 per
share for a total of $_________ (the "Seller's Stock Purchase Price").
2. PURCHASE OF THE NOTES AND DIVIDENDS. In connection with the sale of Seller's
Stock, the Seller hereby agrees to sell to Purchaser the Notes of the Company
set forth in Exhibit A with an aggregate principal amount of
____________________ Dollars ($_______) due on December 31, 2003 and the
Dividends for a total purchase price of _______ Dollar ($_____) (the
"Note/Dividend Purchase Price").
3. CLOSING.
3.1 CLOSING. Subject to the terms and conditions of this Agreement, the
closing of this Agreement (the "Closing") will take place at 629 J Street,
Sacramento, California at 1:00 p.m. (Pacific Standard Time), on August ___, 2003
("Closing Date"), or at such other place, time and date as the parties may agree
to in writing.
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3.2 EFFECT AT CLOSING.
(a) At the Closing, the Purchaser will deliver the Seller's Stock
Purchase Price and the Note/Dividend Purchase Price to the Seller in the
form of a check made payable to the Seller or by wire transfer to the
following account:
(b) Upon receipt of the purchase price as provided by Section 3.2(a),
the Seller will deliver to (i) the Purchaser an assignment of the Notes in
substantially the form attached hereto as EXHIBIT B, (ii) the Purchaser an
assignment of the Dividends in substantially the form attached hereto as
EXHIBIT C, and (iii) the Company's stock transfer agent Computershare Trust
Company, Inc., located at 12039 West Alameda Parkway Z-2, Lakewood,
Colorado, 80228, mailing address Post Office Box 1596, Denver Colorado
8020, the following: (x) the Company's stock certificate representing the
Seller's Stock, (y) an executed stock power, and (z) an instruction letter
to transfer the Seller's Stock into the name of the Purchaser.
4. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Purchaser hereby
represents, warrants and confirms the following:
(a) POWER AND AUTHORITY. The Purchaser hereby represents and warrants that
he has full power and authority to execute and deliver this Agreement and to
perform its obligation under this Agreement.
(b) COMPLIANCE WITH SECURITIES LAWS. The Purchaser understands the Seller's
Stock are not registered with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities Act") or qualified
under the laws of any state, but instead sold under an exemption or exemptions
from the registration and qualification requirements of the Securities Act and
blue sky laws which impose certain restrictions on the Purchaser's ability to
transfer the Seller's Stock. The Purchaser understands that he may not transfer
any Seller's Stock unless such Seller's Stock are registered under the
Securities Act or qualified under blue sky laws or unless, in the opinion of
counsel to the Company, exemptions from such registration and qualification
requirements are available. The Purchaser understands that only the Company may
file a registration or qualification statement with the SEC or any state. The
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit the Purchaser to transfer
all or any of the Seller's Stock in the amounts or at the times proposed by the
Purchaser.
(c) RESTRICTIONS ON TRANSFER. The Purchaser understands that he is
purchasing the Seller's Stock from an affiliate of the Company and will have a
restricted stock legend placed on his stock certificate. In order to reflect the
restrictions on disposition of the Seller's Stock, the share certificates to be
issued to the Purchaser for the Seller's Stock may be endorsed with restrictive
legends, including a legend similar to the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT FOR DISTRIBUTION OR RESALE. THEY MAY NOT BE MORTGAGED, PLEDGED,
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HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 AND OTHER
APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE SECURITIES
LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE HOLDER'S COST
TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT REGISTRATION UNDER
APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE ACCEPTABLE TO THE
COMPANY'S COUNSEL.
(d) RULE 144. The Purchaser understands that Rule 144 promulgated by the
SEC, which provides a safe harbor for certain limited resales of unregistered
securities, is not presently available with respect to the Seller's Stock. The
Purchaser understands that use of the Rule 144 resale safe harbor requires that
the Seller's Stock be held for a minimum of one (1) year, and in certain cases
two (2) years, after they have been purchased and paid for (within the meaning
of Rule 144). The Purchaser understands that the Seller provides no assurance
that the requirements of Rule 144 will be met, or that the Seller's Stock will
ever be saleable.
(e) PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. The Purchaser is purchasing
the Seller's Stock for the Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Seller's Stock within the meaning of the Securities Act. The Purchaser has no
present intention of selling or otherwise disposing of all or any portion of the
Seller's Stock.
(f) ACCESS TO INFORMATION. The Purchaser represents that he is a director
of the Company and has had access to all information regarding the Seller as
well as the Company and the Company's present and prospective business, assets,
liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Seller's Stock, the Notes and
the Dividends.
(g) INVESTMENT EXPERIENCE. The Purchaser represents that he is experienced
in evaluating and investing in securities of companies such as the Company,
acknowledges that it is able to fend for itself, can bear the economic risk of
the investment including the risk that it may lose its entire investment, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Seller's
Stock. In addition, the Purchaser is fully aware of: (i) the highly speculative
nature of the investment in the Seller's Stock; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Seller's Stock and the restrictions
on transferability of the Seller's Stock; and (iv) the qualifications and
backgrounds of the management of the Company.
(h) ACCREDITED INVESTOR. The Purchaser is an "accredited investor," as that
term is defined in Rule 501 of Regulation D of the Securities Act of 1933.
(i) COMPLIANCE WITH SECURITIES LAWS. Purchaser understands that, in
reliance upon the representations and warranties made by Purchaser herein, the
Seller's Stock are not being registered with the SEC under the Securities Act or
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being qualified under applicable state securities laws, but instead are being
transferred under an exemption or exemptions therefrom.
(j) NO GENERAL SOLICITATION. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Seller's Stock, the Notes or the
Dividends.
(k) BROKERAGE COMMISSIONS. Purchaser acknowledges that no brokerage
commissions or other fees were paid by Purchaser in connection with this
transaction.
(l) VALUATION OF SELLER'S STOCK. Purchaser and Seller have determined the
value of the Seller's Stock, the Notes and the Dividends based upon arm's length
negotiations. Purchaser understands that the Seller can give no assurances that
purchase price is in fact the fair market value of the Seller's Stock, the Notes
and the Dividends.
5. THE SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller hereby represents,
warrants and confirms the following:
(a) POWER AND AUTHORITY. The Purchaser hereby represents and warrants that
he has full power and authority to execute and deliver this Agreement and to
perform its obligation under this Agreement.
(b) OWNERSHIP OF SELLER'S STOCK. The Seller originally purchased the
Seller's Stock in a private transaction from the Company more than two (2) years
ago. The Seller holds of record and owns beneficially all of the Seller's Stock,
free and clear of any restrictions on transfer, taxes, security interests,
options, warrants, purchase rights, contracts, commitments, equities, claims and
demands, except for a non-qualified option to Mr. Jeffrey McCormick, a director
of the Company, to purchase Six Million (6,000,000) shares of Common Stock owned
by the Seller which are not part of the Seller's Stock. Seller is not a party to
any option, warrant, purchase right, pledge agreement or other contract or
commitment that could require the Seller to sell, transfer or otherwise dispose
of the Seller's Stock except for a non-qualified option to Mr. Jeffrey
McCormick, a director of the Company, to purchase Six Million (6,000,000) shares
of Common Stock owned by the Seller which are not part of the Seller's Stock.
The Seller is not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of the Seller's Stock. Upon the
Purchaser's purchase of the Seller's Stock under this Agreement, the Purchaser
shall obtain and be fully vested in record and beneficial ownership of the
Seller's Stock, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), taxes,
security interests, options, warrants, purchase rights, contracts, commitments,
equities, claims and demands.
(c) OWNERSHIP OF THE NOTES AND DIVIDENDS. The Seller is the holder of the
Notes and the Dividends, and has all rights, title and interest to the Notes and
Dividends. Further, the Seller represents and warrants that as of the Closing,
the Dividends in the amount of __________ and the principal amounts and accrued
interests under the Notes as set forth in EXHIBIT A remains outstanding and have
not been paid to the Seller.
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(d) CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. The Seller acknowledges
that he has executed the Confidentiality and Non-Disclosure Agreement in
substantially the form attached hereto as Exhibit D with the Company.
(e) ACCESS TO INFORMATION. The Seller represents that he is an affiliate of
the Company and has had access to all information regarding the Company and the
Company's present and prospective business, assets, liabilities and financial
condition that the Seller reasonably considers important in making the decision
to sell the Seller's Stock, the Notes and the Dividends. The Seller further
represents that he had the opportunity to ask questions and receive answers from
the Company concerning the business and financial condition of the Company, and
the Seller has received to his satisfaction, such information about the business
and financial condition of the Company as he has requested.
(f) RELIANCE. The Seller acknowledges and agrees that the decision to sell
all the Seller's Stock and Notes pursuant to this Agreement is an independent
business decision and that Seller is not relying upon Purchaser's
representations (except those made in Section 4 above), valuations, or other
information provided by Purchaser.
(g) NO BROKERS. Seller has not, directly or indirectly, in connection with
the transactions contemplated hereby, (i) employed any broker, finder or agent,
or (ii) agreed to pay or incur any obligation to pay any broker's or finder's
fee or similar fee or compensation.
(h) NO GENERAL SOLICITATION. At no time has Seller made any form of general
advertising or solicitation in connection with the offer, sale and purchase of
the Seller's Stock, the Notes or the Dividends.
6. MISCELLANEOUS PROVISIONS
6.1 ENTIRE CONTRACT. This Agreement constitutes the entire contract between
the parties hereto with regard to the subject matter hereof. The parties
acknowledge that this Agreement supersedes all previous understandings, written
or oral, with respect to the subject matter hereof.
6.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by the Seller and the Purchaser herein shall
survive the execution of this Agreement and the sale and delivery of the
Seller's Stock and Notes.
6.3 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such state without resorting to that
state's conflict-of-laws rules.
6.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Seller and the Purchaser and the legal
representatives, heirs, legatees, distributees, assigns and transferees by
operation of law or otherwise, whether or not any such person shall have become
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a party to this Agreement and have agreed in writing to join herein and be bound
by the terms and conditions hereof.
6.5 SEVERABILITY. In the event that any of the provisions of this Agreement
shall be held by a court or other tribunal of competent jurisdiction to be
illegal, invalid or unenforceable, such provisions shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect.
6.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first indicated above.
SELLER
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James W. Cameron, Jr., an individual
Address: 629 J Street
Sacramento, CA 95814
PURCHASER
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Address:
--------------------------------
--------------------------------
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Exhibit D
Termination of Option Agreement
Whereas James W. Cameron, Jr. ("Cameron") and Jeffrey S. McCormick
("McCormick") and Alternative Technology Resources, Inc. (the "Company") entered
into an Option Agreement dated August 1, 2002, as amended on September 17, 2001,
("Option Agreement") whereby Cameron granted to McCormick the right to purchase
up to 6 million shares of common stock of the Company.
Whereas on June 26, 2002, McCormick assigned his right under the Option
Agreement to the McCormick ATEK Investments LLC ("McCormick LLC");
Whereas Cameron and McCormick are shareholders of the Company; and
Whereas the Company is experiencing financial difficulty and needs
additional cash for its operations and short-term requirements;
Therefore it is agreed to as follows:
Cameron and McCormick LLC agree to cancel the Option Agreement, and allow
Cameron to sell his shares. McCormick LLC will take all administrative steps
necessary, including the removal of all legends on the share certificates
subject to the Option Agreement, to allow Cameron to sell his shares.
Date: 7/23/03 /s/ Jeffrey S. McCormick
----------------------------------------
McCormick ATEK Investments LLC
By Jeffrey S. McCormick, Managing Member
Date: 8/15/03 /s/ James W. Cameron, Jr.
----------------------------------------
James W. Cameron, Jr.
an individual
Alternative Resource Technology, Inc.
Date: 8/15/03 By: /s/ Mark W. Rieger
---------------------------------------
Mark W. Rieger
Its: CEO
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Exhibit E
CERTIFICATE OF DESIGNATION
OF
SERIES A PREFERRED STOCK
OF
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Alternative Technology Resources, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 151 thereof, hereby
certifies that pursuant to the authority contained in Article Fourth of its
Certificate of Incorporation and in accordance with Section 151 of the General
Corporate Law of the State of Delaware, the Board of Directors has adopted the
following resolutions creating a series of shares of Preferred Stock designated
as Series A Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the Board
of Directors does hereby provide for the issue of a new series of Preferred
Stock of the Corporation, that shall be designated "Series A Preferred
Stock," par value $6.00 per share, and shall consist of 2,000 shares. To
the extent that the rights, preferences, privileges and restrictions of the
Series A Preferred Stock are not stated and expressed in the Certificate of
Incorporation, the Board of Directors does hereby fix and herein state and
express such rights, preferences, privileges and restrictions thereof (all
terms used herein which are defined in the Certificate of Incorporation
shall be deemed to have the meanings provided therein), as follows:
1. DESIGNATION AND AMOUNT. The shares shall be designated as "Series A
Preferred Stock," par value $6.00 per share, and the number of shares
constituting such series shall be 2,000.
2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of the Series A Preferred Stock shall be entitled to
receive, but only when and as declared by the Board of Directors, out of
any assets of the Corporation legally available for the purpose, cash
dividends at the rate of $0.50 per share per annum, payable out of funds
legally available therefor. Such dividends shall be non-cumulative. No
dividends (other than those payable solely in the Common Stock of the
Corporation) shall be paid on any Common Stock of the Corporation during
any fiscal year of the Corporation until dividends in the total amount of
$0.50 per share per annum on the Series A Preferred Stock shall have been
paid or declared and set apart during that fiscal year. This dividend
preference is not cumulative and no right shall accrue to holders of shares
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of Series A Preferred Stock by reason of the fact that dividends on said
shares are not declared in any prior year, nor shall any undeclared or
unpaid dividend bear or accrue any interest.
(b) Notwithstanding anything contained herein to the contrary, no
dividends on shares of Series A Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Corporation at
such time if such declaration or payment shall be restricted or prohibited
by law.
3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any liquidation, dissolution or winding-up of the
affairs of the Corporation (collectively, a "Liquidation"), whether
voluntary or involuntary, and after payment of the Corporation's debts and
liabilities, before any payment of cash or distribution of other property
shall be made to the holders of the Common Stock or any other class or
series of shares ranking on Liquidation junior to the Series A Preferred
Stock, the holders of Series A Preferred Stock shall be entitled to receive
out of the assets of the Corporation legally available for distribution to
its shareholders, an amount per share equal to par value of $6.00 per share
(the "Liquidation Preference").
(b) If upon the occurrence of any Liquidation, the assets and funds
thus distributed among holders of the Series A Preferred Stock shall be
insufficient to permit the full payment of the Liquidation Preference to
the holders of Series A Preferred Stock, then the entire assets and funds
of the Corporation legally available for distribution shall be distributed
ratably among holders of the Series A Preferred Stock in proportion to the
amount of such Series A Preferred Stock owned by each such holder.
(c) If upon the occurrence of any Liquidation, the assets and funds
thus distributed among holders of Series A Preferred Stock shall be
sufficient to permit the full payment of the Liquidation Preference to the
holders of Series A Preferred Stock, such holders shall be entitled to no
further participation in the distribution of the assets of the Corporation.
(d) Neither the consolidation or merger of the Corporation with or
into any other corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, shall be deemed to be a
Liquidation of the Corporation for purposes of this Section 3. Further, no
adjustment shall be made to any shares of Series A Preferred Stock for any
stock dividends, combination or splits with respect to any capital stock of
the corporation.
4. NO CONVERSION. The Series A Preferred Stock shall not be convertible
into other shares of the capital stock of the Corporation.
5. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall
have no voting rights except as provided by law.
6. REDEMPTION. The Series A Preferred Stock is not redeemable.
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IN WITNESS WHEREOF, Alternative Technology Resources, Inc. has caused this
Certificate of Designation to be duly executed this 24th day of July, 2003.
/s/ Mark W. Rieger
----------------------------
Mark W. Rieger
Chief Executive Officer
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