-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HfSK8VNOO/l9HFw7F+ZWZUzEWuw9nlbvVtAmjxwWdYKxlrlTQWuz/McuuuUZMPbU S26rf+rl9OyTTJhZ2Xl6ZQ== 0001077048-99-000001.txt : 19990219 0001077048-99-000001.hdr.sgml : 19990219 ACCESSION NUMBER: 0001077048-99-000001 CONFORMED SUBMISSION TYPE: 10SB12G PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUSTAINABLE DEVELOPMENT INTERNATIONAL INC CENTRAL INDEX KEY: 0001075999 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943310203 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: SEC FILE NUMBER: 000-25409 FILM NUMBER: 99544823 BUSINESS ADDRESS: STREET 1: 10240 124 ST CITY: EDMONSTON ALBERTA T5 STATE: A0 ZIP: 00000 BUSINESS PHONE: 4034889221 MAIL ADDRESS: STREET 1: SUITE 208 10240 124 STREET CITY: EDMONTON ALBERTA STATE: A0 ZIP: 0000000 10SB12G 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington D. C., 20549 Form 10-SB General Form for Registration of Securities of Small Business Issuers (Under Section 12(b) or (g) of the Securities Exchange Act of 1934) SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC. (Exact name of registrant as specified in charter) Nevada 86-0857752 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 10240 - 124TH Street, Suite 208 Edmonton, Alberta, Canada T5N 3W6 (Address of Principal Executive Office) (Zip Code) (780) 488-9193 ( Telephone Number) Securities To Be Registered Under Section 12(b) of the Act: Title of each Class Name of each Exchange on which To Be Registered each Class is to be Registered None None Securities To Be Registered Under Section 12(g) of the Act: Common Stock, $0.001 Par Value (Title of Class) The number of shares outstanding of each of the registrant's classes of voting stock, as of February 17, 1999 was: 13,720,000 Common Stock, par value $0.001 TABLE OF CONTENTS Item 1. Description of Business Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Description of Property Item 4. Security Ownership of Certain Beneficial Owners and Management Item 5. Directors, Executive Officers, and Control Persons Item 6. Executive Compensation Item 7. Certain Relationships and Related Transactions Item 8. Legal Proceedings Item 9. Market for Common Equity and Related Stockholder Matters Item 10. Recent Sales of Unregistered Securities Item 11. Description of Securities Item 12. Indemnification of Directors and Officers Item 13. Financial Statements Item 14. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure Item 15. Financial Statements and Exhibits ITEM 1. DESCRIPTION OF BUSINESS Overview SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC., a Nevada corporation (the "Company") is a development stage company formed in 1998 to encourage innovative technologies in the environmental industries. The Company's goal is to acquire technology rights and licenses from patent holders and others, then secure a market, and raise sufficient capital to build, own, and operate facilities throughout the world. The Company is in the process of setting up a subsidiary company called Umweltservice Europa GmbH to recycle waste lubrication oil. The Company has obtained the rights in Germany from Enviro-Mining Inc. for three technologies which when combined can produce a high grade low sulfur diesel fuel meeting all European specifications under EN 590 legislation. The EMI Process is a proven alternative to the present disposal methods by converting automotive waste oil into light heating oil and high quality diesel fuel. (See "Intellectual Property") The Company has added separate innovations to the processing package to provide stability to the products and which meet the lower sulphur standards required in Europe. The Company has combined these technologies under the operating name of The EMI Process (EMI). The objective is to purchase the most appropriate system, which will meet the operating, technical, and business objectives to be operated by Umweltservice Europa GmbH. The Company's Oil Recycling Process These oil recycling processes have been developed to solve a worldwide problem of removing used oil from the environment in a safe and non- polluting way. Most countries have developed collection methods to remove this hazardous waste from their communities with new emphasis on diversion from existing landfills. Registered waste oil transporters are tracked to determine annual volumes, and disposal methods. The majority of the waste oil enters refineries for upgrading and blending, or is burned in the cement industry. The Umweltservice Europa GmbH mandate is to establish 10 facilities throughout Europe prior to the year 2005. The Company's operational plan is to establish control of a license for the oil recycling technology in Germany with limited rights for the balance of Europe. In addition, the Company will have waste oil suppliers for its entire capacity of approximately 90 million litres, complete long term sales arrangements and incur realistic German operational expenditures. The Company intends to provide, "A Complete Recycling Solution". The Company has demonstrated certain needs satisfied by Umweltservice Europa GmbH, which provide opportunities for collectors: * An environmental waste disposal solution * A method of upgrading/regenerating waste oil * A stable long term location of disposal for the industry * A competitive price under long term agreements The collectors will benefit from a reliable, stable place of disposal without being price prohibitive. This provides a sound environmental alternative for the community. In turn Umweltservice Europa GmbH will produce a high quality diesel fuel of exceptional value assuring: * The buyer will receive a clean consistent product; * A preferential market price, allowing value to pass to the preferred major customers of the diesel distributors; the end result will be a gain in market share for the diesel distributors; * An environmental product providing marketing possibilities to promote environmental awareness; and, * Product performance will exceed those of bio fuels and other fuel derivatives. Process-Operations The EMI Process surpasses an older patented system developed in the mid 1970s. The new process is an updated version whereby automotive engine oil is de-watered and enters a thermal treatment unit whereby the hydrocarbon chains are cracked (broken). The treated oil enters a condenser unit to recover light fuels, diesel, and naphtha. The light fuels are recaptured to heat the initial cracking unit, while the diesel and heating oil continues on to further processing. The last stage treats the product to provide the appropriate sulphur, acid, odor, and chlorine levels, while providing stability to the fuel for longer shelf life. The end product of the process is a good quality heating oil, naphtha, bottoms, and diesel fuel for resale. Product Research and Development The EMI technology has operated in Indiana, US for several years with documented diesel production. The EMI Process engineers and consultants to the technology continue to improve and modify the system for better performance, increased output and final product quality. The current model has been operating since 1996 with excellent results. It is highly automated with advanced safety features. The design is certified by professional engineering consultants and manufactured under license. Our Unique Components Excellent final product exceeds all required DIN regulations for DIN EN 590 Diesel fuel. The Systems are designed to meet North American, Asian, and European Union (EU) environmental permitting requirements. Full operating support is provided by design and process engineers enabling Umweltservice Europa GmbH to operate successfully and safely in Germany. Daily monitoring and quality control via state of the art video will provide floor information direct to our Canadian office. All personnel will be provided extensive training for the operations and safety requirements of the Umweltservice Europa GmbH facility. The System is self-contained utilizing a relatively small working area in our redeveloped industrial park site, formerly a Potash mine site in Merkers. The entire facility, owned and operated by Umweltservice Europa GmbH, is to be constructed in an open facility similar to any oil refinery. The plant site will be approximately 30 Meters X 100 Meters. A control building and the fueling facility will be the only other buildings on the site at the initial stage. The tank farm will be underground. The entire site will be secured and fenced. A diesel fueling station with 4 pumping locations and parking for 10 trailer trucks are to be situated on the 15,000 square meter site. This highly automated state of the art facility will operate with specialized Canadian developed equipment. All operators will be locally trained skilled professionals with excellent working conditions and opportunities for upward mobility as new facilities become operational. Products and Services Detailed Product Description Our product exceeds all requirements for fuel consumers in the diesel fuel market. The product from The EMI process is of exceptional quality. The final product in Canada is meeting the diesel specifications for North America and is being sold to trucking Company's as fuel. We will be able to demonstrate that for the same price points, the client will be obtaining a cleaner and higher quality diesel fuel. Product Life Cycle The product life cycle is similar to comparable diesel fuels, and as a rule our production being only a fraction of the distributors' volumes, the product is not held in inventory. The product is transported by tanker vehicle by Hasenauer Transporte or rail on a daily basis and enters the market immediately for consumption. The independent association of gas stations will also be picking up product daily for their regional needs. Research and Development Activities The Company has brought the quality of the product to higher levels as more process improvements and modifications are added their other existing international facilities. Propak Industries has state of the art design technology and excellent experience in process improvements. Umweltservice Europa GmbH will be receiving the latest in technology with the newly engineered second generation systems which have proven their advancements having already been in operation for the past 12 months. Operations Production and Service Delivery Procedure. The production of diesel fuel is monitored and frequently tested to ensure excellent quality for the end user. fuel is stored in a clean tank area for final pick-up. The diesel fuel product is trucked via 30,000 Litre plus transport tanker vehicles owned and operated by Hasenauer Transporte to its final destination. Production and Service Capability The system operates at a safe temperature with full computer integration providing the operators with current information on systems and foreseeable problems. In our Primary Plan we are using a continuous flow process to ensure a constant supply of finished product in the event of normal shutdown and maintenance of either unit. The specification of the system is for 90,000 tons of waste oil input. Downtime start-up delays or increases in waste volume can be regulated through our units with a throughput potential of 100,000 tons. We have not included any allowance for surplus revenue in our financial projections. Our intentions are to process 90,000 tons in the initial stage to prove out the process and as we are able to add extra volume the capacity will be raised to 100,000 tons. Facility improvements may provide higher throughput. Facilities / Site Selection On March 5, 1997, five sites suggested by the LEG-Economic Development Thuringia were examined in the central western portion of Thuringia. Four were eliminated for transportation link purposes. The remaining site was found acceptable with the following conclusions: Primary Site: Merkers-Industrieflache Merkers-Kieselbach Location. The site is at a former Potash mine properly / industrial park which is currently being redeveloped by the LEG. Other businesses in the immediate proximity include a construction waste landfill and comporting facility 100 meters across the road access (owned and operated by Reinhard Hasenauer, first cousin to Harold Jahn), a metals recycling facility 20 meters distance separated by the rail line, and a number of other newer industries within 1 km of the site. (Business Park tenant List-Appendix) New Services The LEG has a division responsible for the servicing and redevelopment of their properties. This site shall have completely new services before the end of 1998. We are invited to offer our input into how our site will be incorporated into the overall design. Property Advantages: * Permitting. The industrial park is considered "heavy industrial" which will expedite our zoning requirements, and acceptable environmental permitting. * Access. The transportation links to the site are excellent. New ring roads are being built around the next city of Bad Salzungen. A rail line exists directly on the property allowing us to process 60,000 Litre tankers from other regions. Access to the B62 highway system is only 150 meters from the site. * Expansion Opportunity. The additional land belonging to the LEG, 16.0 hectares of developable industry land, can be optioned. Our intention is to option 3 additional hectares within a 2 year period for expansion possibilities, given the cost of the land is very reasonable. * Cost Savings. A further saving will arise out of the potential for waste oil suppliers and heating oil customers from the industrial parks' growth in the coming years. This area is becoming a large recycling park providing excellent synergies for the larger SDI mandate of electrical production, and other recycling technologies. Umweltservice Europa GmbH Site Selection Plan The objective is to acquire 1.5 hectare of the Merkers property with the best road and rail access to the east on the site. Two options would be placed on expanding this site, plus having access to a second site in Emleben, secondary site. The Emleben site is medium industrial, 4 hectares in size, and has excellent highway access 2 km away. The only shortfalls were rail access and expandability of the site. A purchase contract for the property is signed awaiting final legal approval and is conditional to an acceptable environment permit. Competitive Operating Advantage The systems are highly automated, enabling only 2 operators per shift to comfortably operate the plant. Each module has its own control panel with early warning systems and fail safe shut offs in the event the operator is not present. This offers a reduced need to hire many new employees. Employment expenses is a large component of operations. Any cost savings in this area by way of economies of scale are very beneficial for lower costs. These cost savings provide us with an opportunity to retain earnings for our further expansion on this site or new locations throughout Germany. The system is proven to operate with little maintenance or down time. This reliability offers us an opportunity to maximize the excess capacity of the system, while allowing room for extra throughput. Other systems in the refining industry require larger economies of scale to operate. They present higher debt servicing, larger infrastructure, and excessive overhead. Our systems are compact, operate in an open structure, and require minimal investment relative to chemical and petrochemical superstructures. From an environmental stand point, our system is highly monitored and produces no harmful emissions or waste to the air, land, or water. We invite and encourage the German Environment Department to inspect our facility or monitor our systems at their leisure. Our focus is to make this facility our flagship in Germany with exceptional records of performance and environmental standards. Suppliers Our waste oil will be provided from four reputable sources of supply. Several Letters of Intent for waste oil supply are currently available. The consumer auto industry produces excellent quality waste oil with low impurities. We will be monitoring and testing all waste oil to our facility for purity. Fines will be levied as a part of our supply contracts, or rejected and turned back on the basis of contaminants or excessive water content. Our application to the environment department permitting allows for specific waste sources only. We will be very strict in our acceptance policy. The better the waste oil quality, the less processing will be required for final product. We will be experiencing gains in quality from German waste oil compared to Spanish, Polish, or typical North American waste oil. Market Analysis The Company's target market is Germany, which is a substantial industrialized economy with exceptionally high volumes of low sulfur, waste oil supply. Germany has over 82 million inhabitants producing 1.1 billion liters of waste lubricants, and 650 000 tons of used waste oil. The size of the Company's target market using figures provided by the Mineral Oil Association of Germany and the National Association of Waste Oil Recyclers, represents 240,000,000 Liters of Umweltservice Europa GmbH product. At a market price of US$0.52 per Liter excluding sales tax for the high quality diesel fuel, potential sales in the Germany market alone is US$ 55,000,000 annually. Industry Description and Outlook The collection of waste oil has been long established in most industrialized nations. As a general figure, the amount of waste oil collected per capita is approximately 10 Litres annually. Estimations of the total waste oil produced in the nation of Germany have been estimated at 1,200,000 tons annually. All waste oil is not collected. A percentage is lost in the combustion process, some is not disposed of in an existing collection system, and some is simply burned. A net amount of 650,000 tons of waste oil per year is reported by the Mineral Oil Association of Germany. Waste oil is considered hazardous and as such the handling of this waste, disposal, and collection methods are heavily regulated in Germany. A specific list of waste collectors is approved to transport this waste, along with manifests as to how many liters are produced, which locations produces/collects this oil, and any variation as to seasonal effects. The types of oil collected are important for our process and our environmental permitting. Approximately 320,000 tons of this used engine oil is of extremely high quality in Germany. Automobile laws stringently require regular oil changes be done and overall car maintenance must be performed regularly in order to be road worthy. These check ups are made on a regular basis and must be completed to retain ones license. Secondly, considering the value individuals place in owning and maintaining their vehicles in Germany, oil changes are more frequent than is the standard in North America. The type of oils to be processed include, engine, hydraulic, and transmission oils primarily from automobiles, military vehicles, and heavy equipment. The quality of the oil and its collection will be strictly adhered to in order to fall under the 4.4 BimscH procedure. This is the standard set out by the Environment Departments for the collection disposal and transport of waste oil. Other oils are available; however, they are classified under a different section of the environment law section 8.0 BimscH. This is considered a special waste, and increases the regulatory burden on storage, processing, emissions, and disposal of residual waste. Input - Waste Oil The primary source of the type of waste oil we require are lube oil change shops, the machining industry, and military vehicles which produce engine and hydraulic waste oils. Germany has been a developed industrial country for over 50 years. They are highly recognized as being world leaders in manufacturing, chemicals, and heavy industry. The present and future growth of industry will shift to more service, and knowledge based efforts. However, automobile usage will remain high for the foreseeable future resulting in a relatively stable waste oil market in the 650,000 ton range per year. Output - Diesel Fuel The price of diesel fuel fluctuates seasonally and over time, yet remains much higher than North American prices due to the importation of fuels into Germany. The price of diesel fuel FOB German Refinery before national sales and mineral oil taxes has been as high as $0.21 US per liter and is currently in the $0.15-$0.17 US range. Our calculations are based on the conservative assumption of a $0.15 US purchase price. We remain profitable above $0.15 US per liter price. The diesel fuel industry is very price sensitive. There are multiple refinery sources. Buyers will shift to an alternative source based on price points, fuel quality, and price stability. Environmental considerations are usually not considered. Environmental concerns are only addressed when legislation is involved requiring purchases be based on a percentage coming from a recycled source or government incentives providing a lower overall cost to the buyer. These considerations are not current law in Germany. We are not expecting these to arise in the near future. German regulations only state waste oil disposal by "burning" must be reduced and "recycling" must increase. Recycling to diesel fuel is not mandated. Umweltservice Europa GmbH will become a preferred recycling option by virtue of its inherent advantages. In summary, price, stable supply, and quality of the diesel fuel are the factors to be considered by our potential customers. The Company's consumer base for our diesel fuel includes transport Company's, gas stations, and two sizable diesel fuel distributors. The ultimate end users are the transportation industry, small independent trucks, diesel autos, trailer trucks, and city/tour buses. Target Market A critical need exists to secure larger centralized sales. This will lessen the burden of dealing with many smaller clients, reducing costly infrastructure expenditures. Our waste oil capacity is currency being secured by way of Letters of Intent. Cement industry and refinery competitors are not in a position to accept long term contracts or contracts with preferred prices for waste oil supply. Our location provides us access to 10 million inhabitants within a 250 km radius consuming in excess of 2 billion liters of diesel fuel annually. Germany's annual diesel consumption excluding all other fuels is currently 25 billion liters. All arrangements are long term with expansion, pace, sad volume clause allowances. Seasonal trends include two periods in Spring and Fall whereby both waste oil supply and diesel fuel demand increase concurrently. This has no bearing on the logistics of operations due to an advanced flow system allowing adjustments into the system. Our storage tank capacity will be able to modulate the volumes through the facility. Industry histories provide all trends in the oil collection and diesel sales seasonal cycles. Market Share Penetration There are a limited number of prospective diesel fuel distributors, however, each controls a sizable market share. This allows us an effective and low cost marketing strategy to reach the small circle of key decision makers. Their focus is to sell to transportation Company's, gas stations, and trucking firms. The Company's entire capacity fills less than 0.002 % of the German diesel fuel market. Market Penetration Waste Oil Supply Market Share Anticipated 1999 14 % 2000-2004 14 % Existing High Quality Waste Oil Suppliers Volume Commitment to Merkers Schmidt Furth 90,000 T 40,000 T Buster Mannheim 25,000 T 10,000 T Tersteeg Coesfeld 30,000 T 10,000 T Other Collectors Germany 175,000 T 30,000 T --------- --------- Total 320,000 T 90,000 T
Diesel Sales in Germany - Monetary Breakdown and Distribution Activity The price of Diesel at the pumps for the average German consumer is relatively expensive compared with North American prices due primarily to higher tax structures. Many passenger vehicles run on diesel, for it is the most inexpensive fuel available. Regular unleaded and Super gasoline is currently much higher. Per Liter Consumer Pump Price Per Gallon (3.78 Liters) Diesel $0.61 US (1.11 DM) - $0.72 US (1.29 DM) $2.30 US Regular Unleaded $0.85 US (1.54 DM) - $0.90 US (1.62 DM) $3.21 US Super $1.00 US (1.81 DM) - Sl.05 US (1.89 DM) $3.78 US The majority of the sale price is tax. A 16 % Federal sales tax similar to the Canadian GST is paid by the consumer. Industry must also pay this tax, yet all sales prices are quoted as Netto, or net prior to adding the sales tax. The Netto price is used for all our activities. A mineral oil tax of 0.63 DM per liter on Diesel currency exists, however, in the coming months an additional 0.10 DM to 0.25 DM addition to the 0.62 DM mineral oil tax may become a reality. These taxes do not effect us, the industry and the consumer is willing to pay these high taxes with the balance of the price being the true value of Diesel. Diesel Fuel Pricing The breakdown below demonstrates what the true value of Diesel is for our financial assumptions; Diesel price at fueling station example 1.16 DM $0.64,44 US Less: National Sales Tax 16% 0.16 DM $0.08.88 US --------- ------------ Fueling Station Sale 1.00 DM $0.55,55 US Less: Fueling station overhead/profit 0.03 DM $0.01.66 US --------- ------------ Fueling Station Cost from Distributor 0.97 DM $0.53,88 US Less: Distributor overhead/profit 0.07 DM $0.03,88 US --------- ------------ Netto Price to Industry/FOB Refinery 0.90 DM $0.50,00 US Less: Mineral Oil Tax 0.63 DM $0.35.00 US --------- ------------ True Value or Cost of Diesel 0.27 DM $0.15,00 US ========= ============
The diesel cost figures include fueling station overhead, transportation from the refinery to the fueling station, distributor costs, refining, and importation of crude into Germany. The current true price leaving a refinery (wholesale price to distributors) is $0.15 US (0.27 DM), by adding profit and overheads throughout the chain, the consumer pays a pretax price of $0.20,55 US (0.37 DM). A $0.05,55 US (0.10 DM) margin at this Worst Case Scenario Price. Umweltservice Europa GmbH will play the role of refiner, distributor, and fueling station obtaining various levels of this margin range under the following sales strategy. Umweltservice Europa GmbH Sale net 16 % Tax True Price after Mineral Tax Merkers fueling station $0.55,55 US 1.00 DM $0.20,55 US 0.38 DM Trucking fleets / Transit authorities $0.53,88 US 0.97 DM $0.19,44 US 0.35 DM Fueling stations Diesel Distributors $0.50,00 US 0.90 DM $0.15,00U $0.27 DM Geographical Area A 250 km radius around the Merkers, Thuringia facility is connected to the Autobahn and rail system. All supply and sales are currently by truck only. Rail links will be used as the Deutsche Bahn (National Rail System) reorganizes for better just-in-time services. Identification of Target Market 1) Government documentation is available on regional waste oil supply and heating oil sales statistics by liter, and historical sales prices. Data is available through the German Department of Environment. 2) Umweltservice Europa GmbH will join appropriate associations related to the waste oil and heating oil industries. We will be registered with recycling organizations, trade publications, and directories to remain informed on all developments for our industry in Germany and the European Community (EU). Purchase cycle of Customers Price is a major concern to retain a customer, yet the market is stable and will not result in large changes in market demand over many years. Key trends/changes with our Target Market Alternative Fuels. Diesel may be displaced by alternative fuels in the future. More efficient engines may not require as frequent oil changes decreasing the supply of waste oil. As technologies develop, more efficient engines will arrive, thus shrinking the diesel fuel market over time. In any event, our market share is a very small portion of the markets large size. We will be informed on these matters by monitoring the markets and being involved with the "Altol Verband" national used oil association, responding to trends that indicate any changes in our market. Price. Price is a factor when dealing with oil prices. Thus we are conducting our financial forecasts on conservative figures, while entering into long term contracts to mitigate the risk of potential market share declines. The Company's largest source of operating income is initially anticipated to be from the sale of produced oil, natural gas and possible natural gas liquids. Therefore, the level of the Company's revenues and earnings are affected by price at which these commodities are sold. In the past, average annual sales prices for oil, natural gas and natural gas liquids, has been erratic, with a recent history of rising oil price per barrel but lower gas prices. It is likely that these prices will continue to fluctuate in the future. Various factors beyond the Company's control affect prices of oil, including; * worldwide and domestic supplies of oil; * the ability of the members of the Organization of Petroleum Exporting Countries ("OPEC") to agree to and maintain oil price and production controls; * political instability or armed conflict in oil-producing regions; * the price of foreign imports; * the level of consumer demand; * the price and availability of alternative fuels; * the availability of pipeline capacity; and, * changes in existing regulation and price controls. Market Test Results In meeting with our German diesel retailers a variety of concerns were addressed: * Technology-Is it proven and viable? The manufacturing rights and the engineering design of The EMI Process have been verified by qualified engineers at Propak Industries in Airdrie, Canada. * Quality of diesel fuel. Diesel was provided to PetroLabs of Germany, the official Fuel Laboratory for the German Government to conduct an independent testing of the final product. Material supplied by Enviro-Mining Inc. and tested by PetroLabs confirmed that the low sulphur standards are achievable. This third party verification is a required step in the approval process of meeting EU specifications. To gain nationwide and European wide acceptability, the Company engaged TUV, equivalent to The Canadian Standards Association - CSA, to conduct a test to verify that the Company meets and exceeds the requirements for EN 590 European Diesel fuel. The TUV verification and acceptability is a crucial seal of approval. * Price and Volumes. Price was the major concern for all parties, they would like some advantage in order to gain their long term support and a benefit. This will motivate them to switch from an existing supplier. The site visit confirmed and satisfied all concerns over output capacity. Some pricing will be l/2 cent lower than market price, providing a greater penetration of the market with acceptable profit levels, while in other areas a premium will be paid for our fuel. * Lead Time Initial orders, reorders, and volume purchases in short run situations will not be a concern. We are negotiating 5 year contracts to ensure long term stability with fixed volumes. Commodity Pricing is based on Spot markets only, not fixed long term price contracts. The Company's review of the past 5 year Spot price levels enhances the Company's ability to become profitable. Competition Although there are Company's with substantially greater financial resources, there is minimal waste oil recycling being conducted in Germany at the present. The Mineral Oil Association of Germany classifies an oil recycler as a refinery which will accept waste oil as a blend to its feedstock or a cement kiln using waste oil as a fuel for its energy requirements. (Refineries - Appendix) They consist of refineries only. These refineries are referred to as waste oil recyclers. They represent our competition for the feed stock. Potential Competition The current technology will allow us to recycle effectively today. Our supply of waste oil is key. Technologies will continue to improve and operating costs will decrease providing an ideal closed loop system for Umweltservice Europa GmbH. In addition, our current competition may start a bidding war to control the waste oil supply. We have some flexibility on the purchase price of our input waste oil, yet we will focus our attention in the media to win support under our environmental and job creation mandate. We believe the market is large enough that the current competitors will not perceive us as a threat. Early action will work to our advantage as we move quickly to secure waste markets. Furthermore, some larger oil producers may encourage our development plans to demonstrate a concern for their environment profile for their Public Relations departments. Similar programs sponsored by Oil Company's made contributions to alternative energy campaigns or endangered animal funds over the past 20 years. The importance of our target market to the competition This concern is minimal for both waste oil acquisition and diesel fuel sales. Umweltservice Europa GmbH will not be perceived as a disruption as we represent only a small fraction of a large market. Barriers to enter our Market by new Competitors * Money - Capital Cost of a new comparable Operation exceeds $ l 5 million US. * Time - Permitting, environmental approval, and construction phase 2 years. * Technology - May be unproven or first full scale version. * Training- Professional Organization with track record required. * Brand Loyalty - They must compete with the recognized "Umweltservice Europa" name * Intellectual Property - Patents, and Designs must be registered in Germany or EU * Market Share - Umweltservice Europa GmbH will have a large regional market share secured Competition is limited to the cement industry and refineries in very defined regions of Germany which are not reliant on the waste oil as a feedstock. Natural gas and other inputs are more efficient. Only one competing technology originating out of Berlin exists for recycling used waste oil. The system is in its experimental phase with low capacity and throughput. Extensive research into other known processes confirms the lack of fully commercialized conversion processes. The Company's waste oil supply base is established, registered waste oil collectors. Existing collectors will switch from their current disposal locations based on: * Freight. Costs of trucking in Germany are three times greater than North America. * Price. We will be competitive on waste oil purchasing with the existing cement industry. * Ecology. Ideology and concern for health issues will play a major factor as awareness increases and the "baby boomers" of industrialized nations become more health conscious. * Stability. Contracts will provide a sense of comfort for an industry facing many regulatory laws, shifts in community values, and market price fluctuations. * Law. A bill is awaiting approval in the European Community eliminated burning as a method of waste oil disposal. The existing collectors would have little choice but to divert this waste to the Company's facilities as the other recycling refineries are near capacity. The Company believes that an opportunity exists to capture a large market share: * First, companies are being forced to comply with German legislation under the Oil Act to reduce burning activities, which have adverse health effects on the population, to more sustainable solutions. * Second, locations where burning and refining industries are unavailable will benefit by having a lower transportation fee. The costs of transportation over greater distances in Germany are very high and uneconomical. * Third, collectors face price fluctuations in the oil market, yet when transferring to the Umweltservice Europa GmbH facility, they will be guaranteed a supply contract with preferential price and volume commitments. They will have price stability over the long term. Marketing and Sales Activity Overall Market Strategy Market penetration will occur by way of long term purchase contracts outlining volumes, and terms. Our growth strategy is to secure our waste oil input, proceeding with secure sales contracts for our diesel fuel on a minimum 90,000 ton waste oil processing increment. In order to justify the capital investment, and security, all expansions will only occur with bonafide secured contracts. We will not build or expand with a portion of the facility underutilized or relying on the day to day markets to fill the shortfall. Distribution channels will be solely through diesel fuel distribution companies. Umweltservice Europa GmbH will only sell directly to the end consumer in areas of strategic competitive advantage. This will alleviate costly administration and sales budgets, concentrating sales into the established network of gas stations, fleets, and through our own facility in Merkers on our Processing site. Communications will occur through the business manager and administrator on a business level and through social contact throughout the community. The Company will take advantage of our environmental focus, and donations to the community at large to increase awareness of our mandate. An information package will be developed for local business and residents. The key group of fuel distributors will be provided a quarterly newsletter to bring all new activities, helpful hints, and our expansion plans to their attention. Sales Strategies We will not have a sales force to obtain contracts for the sale of the final product. The business manager will oversee the sales by interacting with the small group of diesel fuel distributors, fleets, and filling stations in the immediate 100 km region. The Umweltservice Europa GmbH office in Merkers will be responsible for promoting and expanding the interest for our quality product. Our strategy to sell $0.0028 US below the Frankfurt Commodity price to the distribution firms will provide two advantages. They will retain or expand their market share by passing on savings to preferred clientele, while obtaining a better margin. This will position the Company to expand, while ultimately benefiting Umweltservice Europa GmbH with an expanding sales market via their success. Government Regulatory Restrictions Government restrictions on the quality of final product, plant and site operations, and environmental concerns must all be met. Emissions, waste disposal, air, noise, groundwater, 24 hour operations and safety permits must be attained. The normal timeline for environment permitting is 18 months. EMI secured an agreement to reduce this to 7 months. Efforts are being made through political contacts in the region to reduce this timeframe further based on a number of systems operating in countries such as Canada, United States, South Korea, and Singapore which possess similar stringent environmental permitting. The facts are very clear to the systems acceptability, economics, and environmental benefits. A copy of an American Environmental Permit is be submitted to the Environment Department as a reference to the German Government. Our team is ready to prepare the complete document package in a timely fashion to speed up this process. Approval by the German Environment Department is scheduled for the fourth quarter of 1998. Anticipated Changes in Regulatory Requirements Present laws for disposal of waste oil by burning are becoming more restricted. Our research indicates that burning could be abolished completely in the next two years. Legislation from the EC is in progress to strengthen the environmental laws pertaining to the release of heavy metals to the atmosphere through burning methods. Such burning has been linked to the cause of cancer in many countries. Once this bill becomes law, the majority of the 34 current members of the National Used Oil Recycling Association will face the challenge of locating suitable approved disposal sites. Only a few refineries in Germany have excess capacity to fill for used oil as a blend to their feedstock at this time. Umweltservice Europa GmbH has had a welcome reception from the Association as they view our process as a potentially long term approved disposal site centrally located in Germany. Environmental Matters Hazardous Materials. The Company's research and development, manufacturing and collection processes involve the controlled storage, use and disposal of hazardous materials. The Company is subject to federal, foreign, state, and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. Although the Company believes that its safety procedures for handling and disposing of such materials comply with the standards prescribed by such laws and regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, the Company may be held liable for any damages that result, and any such liability could exceed the resources of the Company. There can be no assurance that the Company will not be required to incur significant costs to comply with environmental laws and regulations in the future, nor that the operations, business or assets of the Company will not be materially adversely affected by current or future environmental laws or regulations. Intellectual Property The Company's success and ability to compete is dependent in part upon its proprietary technology. The Company relies on a combination of a "Limited Technology License Agreement," trade secret laws and non- disclosure agreements to protect its proprietary technology. The Company has obtained a license from the Enviro-Mining Incorporated, a company controlled by officers and directors of the Company. The license is for a period of thirty (30) years commencing on June 11, 1998, with renewable 10 year terms. The Limited Technology License Agreement requires the payment of certain minimal annualized payments, and in the event of a default in the payments, the Company could lose its rights to continue utilizing the technology. Further, the Limited Technology License Agreement provides that the Company "must commence construction in the first twelve (12) months of this agreement, a plant of minimum capacity of 90,000 tons of waste oil input in the Territory." The agreement, dated June 11, 1998, further states that it shall be just cause for termination of the Licensee of all license and marketing rights, if the Company has not commenced construction of the first plant within the first year of the license agreement, and an additional commercial scale plant every year thereafter for the next 5 years. The licensing of the proprietary process for the stabilization and purification of gasoil products has its place of origin from CANMET, the principal research and development arm of the Ministry of Natural Resources Canada. CANMET owns the intellectual property known as the CANPED process. The CANPED process of waste oil processing was licensed to Par Excellence Developments Inc. (PED), of Ontario Canada. On March 6, 1998 Enviro-Mining Inc., a major shareholder of the Sustainable Development International, Inc., entered into a "Sub-License Agreement" with PED, wherein the Enviro- Mining Inc. obtained limited intellectual rights to utilize the CANPED process of waste oil processing. PED subsequently approved the execution by the Company and Enviro-Mining Inc. of the "Limited Technology License Agreement," thus providing the Company with the use of the CANPED process. The PED - Enviro-Mining Inc. "Sub-License Agreement" is currently limited to Enviro Recycling GmbH to be built by the Company in or near the town of Merkers Germany and terminates on December 31, 2017. This termination date coincides with the term of the Agreement between CANMET and PED. The rights of the Company, in utilizing the proprietary process of waste oil processing, is subject to the terms and conditions of the Agreement between CANMET and PED. In the event of a termination of the rights of PED by CANMET, then the Company's rights could concurrently be terminated. The company also seeks to protect its intellectual property rights by limiting access to the distribution of its documentation and other proprietary information. In addition, the Company enters into confidentiality agreements with its employees and certain customers, vendors and strategic partners. There can be no assurance that the steps taken by the Company in this regard will be adequate to prevent misappropriation of its technology or that the Company's competitors will not independently develop technologies that are substantially equivalent or superior to the Company's technologies. Employees As of December 31, 1998, the Company had 3 employees. All employees are located at the Company's headquarters in Alberta, Canada. None of the Company's employees are subject to any collective bargaining agreement. The Company's proposed personnel structure can be divided into three broad categories: management and professional, administrative, and project personnel. As in most small Company's, the divisions between these three categories are somewhat indistinct, as employees are engaged in various functions as projects and work load demands. The Company is dependent upon Harold Jahn, President, Chief Executive Officer, and Secretary Treasurer of the Company, Lew Mansell, Senior Vice President, and Garry R. Knull, Chief Financial Officer, both internationally and nationally. The Company has entered into employment agreements with Mr. Jahn, and when funded intends to apply for key man life insurance on the lives of Mr. Jahn, and Mr. Mansell in the amount of $1,000,000 each. The Company's future success also depends on its ability to attract and retain other qualified personnel, for which competition is intense. The loss of Mr. Jahn, Mr. Mansell, and the other individuals involved in key management positions, or the Company's inability to attract and retain other qualified employees could have material adverse effect on the Company. Business Outlook This Form 10-SB includes "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. All statements, other than statements of historical facts included in this Form, including without limitation, statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," regarding the Company's financial position, business strategy, and plans and objectives of management of the Company for future operations, are forward- looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements") are disclosed elsewhere in this Form, including without limitation in conjunction with the forward-looking statements included in this Form. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. Risks Associated with Year 2000 Problem In less than one year, computer systems and/or software used by many Company's may need to be upgraded to accept four digit entries to distinguish 21st century dates from 20th century dates. As is the case with most other Company's using computers in their operations, the Company recognizes the need to ensure that its operations will not be adversely impacted by software and/or system failures related to such "Year 2000" noncompliance. Within the past twelve months, the Company has been upgrading components of its own internal computer and related information and operational systems and continues to assess the need for further system redesign and believes it is taking the appropriate steps to ensure Year 2000 compliance. Based on information currently available, the Company believes that the costs associated with Year 2000 compliance, and the consequences of incomplete or untimely resolution of the Year 2000 problem, will not have a material adverse effect on the Company's business, financial condition and results of operations in any given year. However, even if the internal systems of the Company are not materially affected by the Year 2000problem, the Company's business, financial condition and results of operations could be materially adversely affected through disruption in the operation of the enterprises with which the Company interacts. There can be no assurance that third party computer products used by the Company are Year 2000 compliant. Further, even though the Company believes that its current products are Year2000 compliant, there can be no assurance that under actual conditions such products will perform as expected or that future products will be Year 2000compliant. Any failure of the Company's products to be Year 2000 compliant could result in the loss of or delay in market acceptance of the Company's products and services, increased service and warranty costs to the Company or payment by the Company of compensatory or other damages which could have a material adverse effect on the Company's business, financial condition and results of operations. Additional Information The Company intends to provide an annual report to its security holders, and to make quarterly reports available for inspection by its security holders. The annual report will include audited financial statements. Concurrent with this filing and upon its effectiveness, the Company will be subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, will file reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information may be inspected at public reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington D.C. 20549; Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; 7 World Trade Center, New York, New York, 10048; and 5670 Wilshire Boulevard, Los Angeles, California90036. Copies of such material can be obtained from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C.20549 at prescribed rates. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Following discussion should be read in conjunction with, and is qualified in its entirety by the Financial Statements section included below. With the exception of historical matters, the matters discussed herein are forward looking statements that involve risks and uncertainties. Forward looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, the date of introduction or completion of the Company's products, projections concerning operations and available cash flow. The Company's actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of the Company's financial condition and results of operations should be read in conjunction with the Company's financial statements and the related notes thereto appearing elsewhere herein. Overview The Company, which was organized in May 1998, is a Development Stage Company, engaged in the business of commercializing innovative technologies in the environmental, energy from waste, and alternative power system industries. The Company has a limited operating history and has not generated revenues from the sale of any products. The Company's activities have been limited to start up procedures. Consequently, the Company has incurred the expenses of start-up and licensing. Future operating results will depend on many factors, including the ability of the Company to raise adequate working capital, demand for the Company's services and products, the level of competition and the Company's ability to satisfy governmental regulations and deliver company services and products while maintaining quality and controlling costs. Results of Operations Period from May 27, 1998 (Inception) to October 31, 1998 The first year of operation for the Company achieved two main goals. The formation of the Company's organization to pursue its business strategy and obtaining the licensing of technology required to assist in funding the Company's objectives. Revenues. The Company is a development stage enterprise as defined in SFAS #7, and has yet to generate any revenues. The Company is devoting substantially all of its present efforts to: (1) developing its management team and administrative network, (2) developing its market, and (3) obtaining sufficient capital to commence full operations. General and Administrative. General and administrative, legal and consulting expenses for the period from May, 1998 to October 31, 1998 were $52,111, of which $18,000 was paid to a director for his services. Liquidity and Capital Resources Cash and cash equivalents will be increasing primarily due to commencement of operations. The receipt of funds from Private Placement Offerings and loans obtained through private sources by the Company are anticipated to offset the near term cash equivalents of the Company. Since inception, the Company has financed its cash flow requirements through issuance of common stock, and minimal cash balances. As the Company commences operational activities, it may continue to experience net negative cash flows from operations, pending receipt of sales revenues. Further, the Company may be required to obtain additional financing to fund operations through Common Stock offerings and bank borrowings, to the extent available, or to obtain additional financing to the extent necessary to augment its working capital. Over the next twelve months, the Company intends to commence revenue generation by establishing operational facilities under development in its target markets. However, the Company will continue the research and development of its products, increase the number of its employees, and expand its facilities where necessary to meet development and completion deadlines. The Company believes, that existing capital and anticipated funds from operations will not be sufficient to sustain operations and planned expansion in the next twelve months. Consequently, the Company will seek additional financing in order to such additional funds will be available or that, if available, such additional funds will be on terms acceptable to the Company. No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity. In either case, the financing could have negative impact on the financial conditions of the Company and its Shareholders. The Company anticipates that it will incur operating losses in the next twelve months. The Company's lack of operating history makes predictions of future operating results difficult to ascertain. The Company's prospects must be considered in light of the risks, expenses and difficulties frequently encountered by Company's in their early stage of development, particularly Company's in new and rapidly evolving markets such as environmental technology. Such risks for the Company include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, the Company must, among other things, obtain a customer base, implement and successfully execute its business and marketing strategy, continue to develop and upgrade its technology and products, provide superior customer services and order fulfillment, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that the Company will be successful in addressing such risks, and the failure to do so can have a material adverse effect on the Company's business prospects, financial condition and results of operations. Initial financing is only to provide funds to prove the business concept and to finish the development of the environmental technology. Additional funds will be necessary to take the product to market. The Company hopes to enter into additional funding arrangements through strategic partnerships, merger, equity offering or debt offering. Nothing has been secured as of this time. ITEM 3. DESCRIPTION OF PROPERTY Office. The Company's main offices are located at 10240 - 124th Street, Suite 208, Edmonton, Alberta, Canada , and its telephone number is (780) 488-9193, Fax No. (780) 488-9100. The facility is a leased approximately 600 square foot facility utilized in the following manner: a) administrative offices, b) professional offices, c) miscellaneous. The headquarters is ideal to commencement the pursuit of marketing activity throughout North America. Technical Library - The Company maintains a technical library, which is comprised of periodicals, trade journals, books, and other documents related primarily to the basic sciences, government regulations and industry materials. Processing Plant - The manufacturing plant for the Company's products is to be located in Merkers, Thuringia, Germany, where sufficient processing equipment will be in place for production purposes. ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners. The following table sets forth certain information as of February 16, 1999 with respect to the beneficial ownership of Common Stock by (i) each person who to the knowledge of the Company, beneficially owned or had the right to acquire more than 5% of the Outstanding Common Stock, (ii) each director of the Company and (iii) all executive officers and directors of the Company as a group. Name of Beneficial Owner (1) Number Percent of Shares Of Class (2) Sustainable Development Group(3) 9,500,000 69% Enviro-Mining Inc. (4) 3,260,000 24% Jeff Lea Investments (5) 20,000 1% ------------ ----------- All Directors & Officers as a Group 12,780,000 94% ------------ -----------
(1) As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date. (2) Figures are rounded to the nearest percentage. (3) Sustainable Development Group is controlled by Harold Jahn. (4) Enviro-Mining Inc. is owned 50% by Harold Jahn and 50% by Lew Mansell. (5) Jeff Lea Investments is controlled by Garry Knull. ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS Name Age Title Harold Jahn 29 President, CEO, Secretary/Treasurer, Director Lew Mansell 52 Senior Vice President Garry R. Knull 52 Chief Financial Officer Duties, Responsibilities and Experience Harold Jahn - President and Chief Executive Officer Mr. Jahn graduated from the University of Alberta with a BA degree in International Relations and Economics in 1991. His education contributed to his knowledge of business and government issues, creativity in problem solving, strengthened concerns for sustainable development, and managing projects in a timely manner. Following graduation Harold began a four year career in real estate to build business contacts, and gain a solid understanding of the private sector. Over the past number of years, his focus has been on international marketing and environmental technologies. In mid 1995, Enviro-Mining Inc. was cofounded by Mr. Jahn as a solution for recycling needs in the tire industry. Its mission has expanded, developing a broader recycling mandate internationally with the inclusion of innovative technologies in power generation and mining equipment worldwide. Mr. Jahn continues to be involved in numerous business activities in Canada, the United States, and Europe related to recycling, the environment, and the alternative energy industry. Lew Mansell - Senior Vice President Mr. Mansell graduated with a B.Sc. in chemistry in 1968, and brings over 25 years of management skills to this position. His experience includes polymer research, industrial sales and services in the manufacturing, petrochemical, and corrosion industry. Since 1978, he has successfully turned around several Company's implementing new quality control systems, and production procedures. The marketing and commercialization of innovative technologies became his focus from 1990. The opportunity to build, own, and operate sustainable business projects was created with the co-founding of Enviro-Mining Inc. His involvement with SDI allows his talents to excel as SDI seeks leading edge opportunities to recycle oils, plastics, and tires. Developing new ideas for sustainable development extends into alternative energy, mineral processing, and construction materials. Garry R. Knull - Chief Financial Officer Garry R. Knull, CA is the senior partner in a professional accounting practice and has been in practice for over 25 years. He has been involved in corporate and commercial accounting, auditing and providing financial and taxation advice to a variety of clients. He is also Chief Financial Officer of a midsize oilfield manufacturing and supply company. Compensation Committee Interlocks and Insider Participation The Company does not currently have a compensation committee of the Board of Directors. However, the Board of Directors intends to establish a compensation committee which is expected to consist of three inside directors and the two independent members of the Board of Directors. Stock Option Plan and Non-Employee Directors' Plan The following descriptions apply to stock option plans, which the Company has adopted; however, no options have been granted as of this date. The Company intends to reserve for issuance an aggregate of 1,000,000 shares of Common Stock under a Stock Option Plan (the "Stock Option Plan") and Non-Employee Directors' Plan described below (the "Directors' Plan") which is planned to be adopted by the Company. These plans are intended to encourage directors, officers, employees and consultants of the Company to acquire ownership of Common Stock. The opportunity is intended to foster in participants a strong incentive to put forth maximum effort for the continued success and growth of the Company, to aid in retaining individuals who put forth such efforts, and to assist in attracting the best available individuals to the Company in the future. Stock Option Plan Officers (including officers who are members of the Board of Directors), directors (other than members of the Stock Option Committee (the "Committee") to be established to administer the Stock Option Plan and the Directors' Plan) and other employees and consultants of the Company and its subsidiaries (if established) will be eligible to receive options under a the planned Stock Option Plan. The Committee will administer the Stock Option Plan and will determine those persons to whom options will be granted, the number of options to be granted, the provisions applicable to each grant and the time periods during which the options may be exercised. No options may be granted more than ten years after the date of the adoption of the Stock Option Plan. Unless the Committee, in its discretion, determines otherwise, non- qualified stock options will be granted with an option price equal to the fair market value of the shares of Common Stock to which the non-qualified stock option relates on the date of grant. In no event may the option price with respect to an incentive stock option granted under the Stock Option Plan be less than the fair market value of such Common Stock to which the incentive stock option relates on the date the incentive stock option is granted. Each option granted under the Stock Option Plan will be exercisable for a term of not more than ten years after the date of grant. Certain other restrictions will apply in connection with this Plan when some awards may be exercised. In the event of a change of control (as defined in the Stock Option Plan), the date on which all options outstanding under the Stock Option Plan may first be exercised will be accelerated. Generally, all options terminate 90 days after a change of control. Directors Plan The Directors' Plan is intended to: * Enable the Company to secure persons of requisite business experience to serve on the Board of Directors, * To motivate directors to enhance the future growth of the Company by furthering their identification with the interests of the Company and its stockholders, and * To assist in retaining directors. The Directors' Plan will provide for the grant of stock options to persons who are members of the Board of Directors and who at the time they joined the Board of Directors were not employees of the Company or any of its affiliates ("Non-Employee Directors"). The Committee will administer the Directors' Plan. Each of the Non-Employee Directors will receive an option to purchase shares of Common Stock. Such options will vest in three equal annual installments commencing on the first anniversary of such Non- Employee Director's election. Options granted under the Directors' Plan may not be exercised more than five years after the date of grant. No option may be granted more than ten years after the date of the adoption of the Directors' Plan. In the event of a change of control (as defined in the Directors' Plan), the date on which all options outstanding under the Directors' Plan may first be exercised is accelerated. Generally, all options will terminate 90 days after a change of control. ITEM 6. EXECUTIVE COMPENSATION The following table sets forth the cash compensation of the Company's executive officers and directors during each of the fiscal years since inception of the Company. The remuneration described in the table does not include the cost to the Company of benefits furnished to the named executive officers, including premiums for health insurance and other benefits provided to such individual that are extended in connection with the conduct of the Company's business. The value of such benefits cannot be precisely determined, but the executive officers named below did not receive other compensation in excess of the lesser of $50,000 or 10% of such officer's cash compensation. Summary Compensation Table Long Term Annual Compensation Compensation Name and Other Annual Restricted Principal Year Salary Bonus Compensation stock Options Others Position Harold 1998 $24,000 Jann Lew Mansell Garry R. Knull
Compensation of Directors All directors will be reimbursed for expenses incurred in attending Board or committee meetings. ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS License Agreement. On June 11, 1998, the Company entered into a license agreement ("Limited Technology License Agreement") with Enviro- Mining Inc. regarding the licensing of the Company by Enviro-Mining, Inc. to use certain patented technology in connection with the recycling of waste oil into low sulphur diesel. The license is for a period of thirty (30) years commencing on June 11, 1998, with renewable 10 year terms. The Limited Technology License Agreement requires the payment of certain minimal annualized payments, and in the event of default in the payments, the Company could lose its rights to continue utilizing the technology. Further, the Limited Technology License Agreement provides that the Company "must commence construction in the first twelve (12) months of this agreement, a plant of minimum capacity of 90,000 tons of waste oil input in the Territory." The agreement, dated June 11, 1998, further states that it shall be just cause for termination of the Licensee of all license and marketing rights if the Company has not commenced construction of the first plant within the first year of the license agreement, and an additional commercial scale plant every yea thereafter for the next 5 years. Enviro-Mining, Inc. Harold Jahn, President and CEO of the Company, and Lew Mansell, Senior Vice President of the Company, are joint owners of Enviro- Mining, Inc. Sustainable Development Group Harold Jahn, President and CEO of the Company, and Lew Mansell, Senior Vice President of the Company, are joint owners of Sustainable Development Group. ITEM 8. LEGAL PROCEEDINGS The Company is not presently a party to any litigation, nor to the knowledge of management is any litigation threatened against the Company, which would materially affect the Company. ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Prior to this filing there has not been a public market for the Company's Common Stock, and there can be no assurance that a public market for the Common Stock will develop or be sustained after this filing. The trading price of the Company's Common Stock could be subject to wide fluctuations in response to quarterly variations in operating results, announcement of technological innovations or new products by the Company or its competitors, and other events or factors. In addition, in recent years the stock market has experienced extreme price and volume fluctuations that have had a substantial effect on the market prices for many emerging growth Company's, which may be unrelated to the operating performance of the specific Company's. The Company's shares of Common Stock are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (hereinafter referred to as the "Act"), and with the exception of certain shares issued pursuant to Regulation D-504, are "restricted securities." Rule 144 of the Act provides, in essence, that holders of restricted securities for a period of one year (unless an affiliate of the Company) may, every three months, sell to a market maker or in ordinary brokerage transactions an amount equal to one percent of the Company's then outstanding securities. Affiliates may be required to hold for two years. Non-affiliates of the Company who hold restricted securities for a period of two years may sell their securities without regard to volume limitations or other restriction. A total of 956,200 shares are unrestricted and the balance of 12,760,800 shares of Common Stock will be available for resale under Rule 144 commencing in 1999. Sales of shares of Common Stock under Rule 144 may have a depressive effect on the market price of the Company's Common Stock, should a public market develop for such stock. Such sales might also impede future financing by the Company. Since its inception in May 1998, the Company has not paid cash dividends on its Common Stock. It is the present policy of the Company not to pay cash dividends and to retain future earnings to support the Company's growth. Any payments of cash dividends in the future will be dependent upon, among other things, the amount of funds available therefore, the Company's earnings, financial condition, capital requirements, and other factors which the Board of Directors deem relevant. As of December 31, 1998 there were approximately 53 Common Shareholders of record. ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES Private Placements. In June 1998, the Company completed an exempt placement of securities of $500,000 of common stock, pursuant to Regulation D 504 of the Securities Act of 1933. In October 1998, the Company completed an exempt placement of securities of $200,000 of common stock, pursuant to Regulation D 504 of the Securities Act of 1933. ITEM 11. DESCRIPTION OF SECURITIES Common Stock The Company's Articles of Incorporation authorizes the issuance of 50,000,000 shares of common stock, $0.001 par value per share, of which 13,720,000 shares were outstanding as of the date of this filing. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders and have no cumulative voting rights. Holders of shares of common stock are entitled to share ratably in dividends, if any, as may be declared, from time to time by the Board of Directors in its discretion, from funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, the holders of shares of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase the Company's common stock. There are no conversion rights or redemption or sinking fund provisions with respect to the common stock. All of the outstanding shares of common stock are validly issued, fully paid and non-assessable. Preferred Stock The Company's Articles of Incorporation authorizes the issuance of 10,000,000 shares of preferred stock, $0.001 par value per share, of which no shares were outstanding as of the date of this filing. The Preferred Stock may be issued from time to time by the Board of Directors as shares of one or more classes or series. Subject to the provisions of the Company's Certificate of Incorporation and limitations imposed by law, the Board of Directors is expressly authorized to adopt resolutions to issue the shares, to fix the number of shares and to change the number of shares constituting any series, and to provide for or change the voting powers, designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, including dividend rights (including whether dividends are cumulative), dividend rates, terms of redemption (including sinking fund provisions), redemption prices, conversion rights and liquidation preferences of the shares constituting any class or series of the Preferred Stock, in each case without any further action or vote by the stockholders. One of the effects of undesignated Preferred Stock may be to enable the Board of Directors to render more difficult or to discourage an attempt to obtain control of the Company by means of a tender offer, proxy contest, merger or otherwise, and thereby to protect the continuity of the Company's management. The issuance of shares of Preferred Stock pursuant to the Board of Director's authority described above may adversely affect the rights of holders of Common Stock. For example, Preferred stock issued by the Company may rank prior to the Common Stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of Common Stock. Accordingly, the issuance of shares of Preferred Stock may discourage bids for the Common Stock at a premium or may otherwise adversely affect the market price of the Common Stock. Dividend Policy The Company has never declared or paid cash dividends on its Common Stock. The Company currently anticipates that it will retain all future earnings for use in the operation and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. Transfer Agent The transfer agent for the common stock is Pacific Stock Transfer, 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120. ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Articles of Incorporation for the Company do not contain provisions for indemnification of the officers and directors; however, Section 78.751 of the Nevada General Corporation Laws provides as follows: 78.751 Indemnification of officers, directors, employees and agents; advance 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 attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. 2. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was 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 o directors who were not parties to 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 to obtained, by independent legal counsel in a written opinion; or 5. The 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, 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 corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than the 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 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 act or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. (b) 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. ITEM 13. FINANCIAL STATEMENTS The 1998 Audited Financial Statement of the Company, prepared by the Accounting Firm of Grant Thornton, required by Regulation S-X commence on page F-1 hereof in response to Item 13 of this Registration Statement on Form 10SB and are incorporated herein by this reference. Audited Financial Statements of Sustainable Development International, Inc. Independent Auditors' Report F-1 Statement of Loss and Deficit for the period ended October 31, 1998 F-2 Balance Sheet as of October 31, 1998 F-3 Statements of Changes in Financial Position Period Ended October 31, 1998 F-4 Notes to Financial Statements F-5-F-7 Chartered Accountants Canadian Member Firm of Grant Thornton International Auditors' Report To the Shareholders of Sustainable Development International Inc. We have audited the balance sheet of Sustainable Development International Inc. as at October 31, 1998 and the statement of loss and deficit and changes in financial position for the period then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the company as at October 31, 1998 and the results of its operations and changes in its financial position for the period then ended in accordance with generally accepted accounting principles. Edmonton, Canada November 6, 1998 Chartered Accountants Sustainable Development International Inc. Statement of Loss and Deficit (Expressed in United States Dollars) Period Ended October 31, 1998 (157 days) Expenses Advertising $ 150 Amortization 4,167 Consulting fees 23,401 Management fees (Note 5) 18,000 Professional fees 4,988 Service Charges 455 Travel 950 ----------- (52,111) ----------- Net loss and deficit, end of period $ (52,111) ===========
See accompanying notes to the financial statements. Sustainable Development International Inc. Balance Sheet (Expressed in United States Dollars) October 31, 1998 Assets Current Cash $ 330,053 Licensing agreement (Note 2) 295,833 ----------- $ 625,886 ===========
Liabilities Current Payables and accruals $ 13,989 ----------- Shareholder's Equity Capital stock (Note 4) 664,008 Deficit (52,111) ----------- 611,897 ----------- $ 625,886 ============
Commitment (Note 3) On behalf of the Board _____________________ Director See accompanying notes to the financial statements. Sustainable Development International Inc. Statement of Changes in Financial Position (Expressed in United States Dollars) Period Ended October 31, 1998 (157 days) Cash derived from (applied to): Operating Net loss $ (52,111) Amortization 4,167 Change in non-cash operating working capital: Payables and accruals 13,989 ------------ (33,955) Financing Issuance of capital stock 664,008 Investing Purchase of licensing agreement (300,000) ------------ Net increase in cash and balance, end of period $ 330,053 ============
See accompanying notes to the financial statements. Sustainable Development International Inc. Notes to the Financial Statements (Expressed in United States Dollars) October 31, 1998 1. Commencement of operations Sustainable Development International, Inc., a Nevada corporation, is a development stage company formed on May 27, 1998 to encourage sustainable development by commercializing innovative technologies in environmental industries. The company's goal is to acquire technology rights and licenses from patent holders for proven technologies, then secure a market, and finally raise the necessary capital to build, own, and operate facilities throughout the world. 2. Significant accounting policies Basis of presentation The company's accounting and reporting policies conform to generally accepted accounting principles and industry practice in the United States. The amounts are reported in these financial statements are in United States dollars. Use of estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses for the reported period. Actual results could differ from those estimates. Licensing agreement Licensing agreements are recorded at cost. Licensing agreements are assessed for future recoverability or impairment on an annual basis by estimating future net undiscounted cash flows and residual values or by estimating replacement or appraised values. If the net carrying amount of the licensing agreement exceeds the estimated net recoverable amount, the agreement is written down with a charge against income. Amortization of licensing agreements is being recorded in the financial statements on a straight-line basis over the life of the agreement, which is 30 years. 3. Licensing agreement 1998 Licensing agreement $ 300,000 On June 11, 1998 Sustainable Development International Inc. entered into a Limited Technology License Agreement with Enviro-Mining Inc., an Alberta, Canada Corporation. The Agreement commits Sustainable Development International Inc. to pay an amount equal to or less than $300,000 to Enviro-Mining Inc. as a production royalty. The Agreement could be terminated if Sustainable Development International Inc. does not commence construction within the first twelve months of the agreement, at a minimum plant capacity of 90,000 Tonnes of waste oil input. Sustainable Development International Inc. Notes to the Financial Statements (Expressed in United States Dollars) October 31, 1998 4. Capital stock Authorized: 50,000,000 Common voting shares, $.001 par value 10,000,000 Preferred shares Issued: 13,700,000 Common voting shares $ 13,700 Additional paid in capital 650,308 ------------ $ 664,008 ============
During the period, the company had the following share transactions: Shares $ Shares issued to founding shareholders, May 1998. 11,500,000 $ 8 Common shares issued for transfer of Licensing Agreement at $0.25 per share, June 1998. 1,200,000 300,000 Common shares issued for cash consideration of $0.25 per share by private placement, September 1998. 706,596 176,649 Common shares issued for services at $0.25 per share, June 1998 to October 1998. 93,404 23,351 Common share issued for cash consideration of $1.00 per share by private placement, October 1998. 200,000 200,000 ------------ ---------- 13,700,000 700,008 Expenses on issuance of share capital. - (36,000) ------------ ---------- 13,700,000 $ 664,008 ============ ===========
Sustainable Development International Inc. Notes to the Financial Statements (Expressed in United States Dollars) October 31, 1998 5. Related party transactions a) During the year, Enviro Mining Inc., a shareholder of the company, sold to the company a Licensing Agreement for $300,000. b) During the year, management fees were paid to the director of the company totaling $18,000. 6. Uncertainty due to the Year 2000 Issue The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The Company has not had any changes in or disagreements with Accountants since inception. ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS Exhibit Description Number (3)(i)* Articles of Incorporation (a) Articles of Incorporation, as amended for Sustainable Development International, Inc., a Nevada corporation (3)(ii)* Bylaws (a) Bylaws, as amended for Sustainable Development International, Inc., a Nevada corporation (4)* Instruments defining the rights of security holders: (4)(i)* (a) Articles of Incorporation for Sustainable Development International, Inc., a Nevada Corporation (b) Bylaws of Sustainable Development International, Inc., a Nevada Corporation (c) Stock Certificate specimen (10)(i)* Material Contracts (a) Limited Technology License Agreement (b) Power Purchase Agreement -German State Electrical Utility (24)* Consents of expert (a) Grant Thornton - Auditors (27)* Financial Data Schedule *Filed herewith.
SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized. February 17, 1999 SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC. (Registrant) By: /S/ Harold Jahn Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Harold Jahn Chairman, CEO, President February 17, 1999 Harold Jahn /s/ Lew Mansell Senior Vice President, February 17, 1999 Lew Mansell Director /s/ Garry R. Knull Treasurer, CFO February 17, 1999 Garry R. Knull
EX-3.I.A 2 ARTICLES OF INCORPORATION OF SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC. KNOW ALL MEN BY THESE PRESENTS: That the undersigned, being at least eighteen (18) years of age and acting as the incorporator of the Corporation hereby being formed under and pursuant to the laws of the State of Nevada, does hereby certify that: Article I - NAME The exact name of this corporation is: SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC. Article II - REGISTERED OFFICE AND RESIDENT AGENT The registered office and place of business in the State of Nevada of this corporation shall be located at 1850 E. Flamingo Rd., Suite 111, Las Vegas, Nevada. The resident agent of the corporation is DONALD J. STOECKLEIN, whose address is 1850 E. Flamingo Rd., Suite 111, Las Vegas, Nevada 89119. Article III - DURATION The Corporation shall have perpetual existence. Article IV - PURPOSES The purpose, object and nature of the business for which this corporation is organized are: (a) To engage in any lawful activity, (b) To carry on such business as may be necessary, convenient, or desirable to accomplish the above purposes, and to do all other things incidental thereto which are not forbidden by law or by these Articles of Incorporation. Article V - POWERS This Corporation is formed pursuant to Chapter 78 of the Nevada Revised Statutes. The powers of the Corporation shall be those powers granted by 78.060 and 78.070 of the Nevada Revised Statutes under which this corporation is formed. In addition, the corporation shall have the following specific powers: (a) To elect or appoint officers and agents of the corporation and to fix their compensation; (b) To act as an agent for any individual, association, partnership, corporation or other legal entity; (c) To receive, acquire, hold, exercise rights arising out of the ownership or possession thereof, sell, or otherwise dispose of, shares or other interests in, or obligations of, individuals, association, partnerships, corporations, or governments; (d) To receive, acquire, hold, pledge, transfer, or otherwise dispose of shares of the corporation, but such shares may only be purchased, directly or indirectly, out of earned surplus; (e) To make gifts or contributions for the public welfare or for charitable, scientific or educational purposes. Article VI - CAPITAL STOCK Section 1. Authorized Shares. The total number of shares which this corporation is authorized to issue is 50,000,00 shares of Common Stock of $.001 par value and 10,000,000 shares of Preferred Stock of $.001 par value. Section 2. Voting Rights of Stockholders. Each holder of the Common Stock shall be entitled to one vote for each share of stock standing in his name on the books of the corporation. Section 3. Consideration for Shares. The Common Stock shall be issued for such consideration, as shall be fixed from time to time by the Board of Directors. In the absence of fraud, the judgment of the Directors as to the value of any property or services received in full or partial payment for shares shall be conclusive. When shares are issued upon payment of the consideration fixed by the Board of Directors, such shares shall be taken to be fully paid stock and shall be non-assessable. The Articles shall not be amended in this particular. Section 4. Stock Rights and Options. The corporation shall have the power to create and issue rights, warrants, or options entitling the holders thereof to purchase from the corporation any shares of its capital stock of any class or classes, upon such terms and conditions and at such times and prices as the Board of Directors may provide, which terms and conditions shall be incorporated in an instrument or instruments evidencing such rights. In the absence of fraud, the judgment of the Directors as to the adequacy of consideration for the issuance of such rights or options and the sufficiency thereof shall be conclusive. Article VII - MANAGEMENT For the management of the business, and for the conduct of the affairs of the corporation, and for the future definition, limitation, and regulation of the powers of the corporation and its directors and stockholders, it is further provided: Section 1. Size of Board. The initial number of the Board of Directors shall be one (1). Thereafter, the number of directors shall be as specified in the Bylaws of the corporation, and such number may from time to time be increased or decreased in such manner as prescribed by the Bylaws. Directors need not be stockholders. Section 2. Powers of Board. In furtherance and not in limitation of the powers conferred by the laws of the State of Nevada, the Board of Directors is expressly authorized and empowered: (a) To make, alter, amend, and repeal the Bylaws subject to the power of the stockholders to alter or repeal the Bylaws made by the Board of Directors; (b) Subject to the applicable provisions of the Bylaws then in effect, to determine, from time to time, whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the corporation, or any of them, shall be open to stockholder inspection. No stockholder shall have any right to inspect any of the accounts, books or documents of the corporation, except as permitted by law, unless and until authorized to do so by resolution of the Board of Directors or of the stockholders of the Corporation; (c) To authorize and issue, without stockholder consent, obligations of the Corporation, secured and unsecured, under such terms and conditions as the Board, in its sole discretion, may determine, and to pledge or mortgage, as security therefore, any real or personal property of the corporation, including after-acquired property; (d) To determine whether any and, if so, what part of the earned surplus of the corporation shall be paid in dividends to the stockholders, and to direct and determine other use and disposition of any such earned surplus; (e) To fix, from time to time, the amount of the profits of the corporation to be reserved as working capital or for any other lawful purpose; (f) To establish bonus, profit-sharing, stock option, or other types of incentive compensation plans for the employees, including officers and directors, of the corporation, and to fix the amount of profits to be shared or distributed, and to determine the persons to participate in any such plans and the amount of their respective participations. (g) To designate, by resolution or resolutions passed by a majority of the whole Board, one or more committees, each consisting of two or more directors, which, to the extent permitted by law and authorized by the resolution or the Bylaws, shall have and may exercise the powers of the Board; (h) To provide for the reasonable compensation of its own members by Bylaw, and to fix the terms and conditions upon which such compensation will be paid; (i) In addition to the powers and authority hereinbefore, or by statute, expressly conferred upon it, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the corporation, subject, nevertheless, to the provisions of the laws of the State of Nevada, of these Articles of Incorporation, and of the Bylaws of the corporation. Section 3. Interested Directors. No contract or transaction between this corporation and any of its directors, or between this corporation and any other corporation, firm, association, or other legal entity shall be invalidated by reason of the fact that the director of the corporation has a direct or indirect interest, pecuniary or otherwise, in such corporation, firm, association, or legal entity, or because the interested director was present at the meeting of the Board of Directors which acted upon or in reference to such contract or transaction, or because he participated in such action, provided that: (1) the interest of each such director shall have been disclosed to or known by the Board and a disinterested majority of the Board shall have, nonetheless, ratified and approved such contract or transaction (such interested director or directors may be counted in determining whether a quorum is present for the meeting at which such ratification or approval is given); or (2) the conditions of N.R.S. 78.140 are met. Section 4. Name and Address. The name and post office address of the first Board of Directors which shall consist of one (1) person who shall hold office until his successors are duly elected and qualified, are as follows: NAME ADDRESS HAROLD JAHN 1850 E. Flamingo Road, Suite 111 Las Vegas, Nevada 89119 Article VIII - PLACE OF MEETING; CORPORATE BOOKS Subject to the laws of the State of Nevada, the stockholders and the directors shall have power to hold their meetings, and the directors shall have power to have an office or offices and to maintain the books of the Corporation outside the State of Nevada, at such place or places as may from time to time be designated in the Bylaws or by appropriate resolution. Article IX - AMENDMENT OF ARTICLES The provisions of these Articles of Incorporation may be amended, altered or repealed from time to time to the extent and in the manner prescribed by the laws of the State of Nevada, and additional provisions authorized by such laws as are then in force may be added. All rights herein conferred on the directors, officers and stockholders are granted subject to this reservation. Article X - INCORPORATOR The name and address of the incorporator signing these Articles of Incorporation are as follows: NAME POST OFFICE ADDRESS HAROLD JAHN 1850 E. Flamingo Road, Suite 111 Las Vegas, Nevada 89119 Article XI - LIMITED LIABILITY OF OFFICERS AND DIRECTORS Except as hereinafter provided, the officers and directors of the corporation shall not be personally liable to the corporation or its stockholders for damages for breach of fiduciary duty as a director or officer. This limitation on personal liability shall not apply to acts or omissions which involve intentional misconduct, fraud, knowing violation of law, or unlawful distributions prohibited by Nevada Revised Statutes Section 78.300. IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of Incorporation this 27th day of May, 1998. /s/ Harold Jahn -------------------------- HAROLD JAHN STATE OF NEVADA ) ) ss: COUNTY OF CLARK ) On May 27, 1998, personally appeared before me, a Notary Public, HAROLD JAHN, who acknowledged to me that he executed the foregoing Articles of Incorporation. /s/ Debra K. Amigone --------------------------- NOTARY PUBLIC EX-3.II.A 3 BYLAWS OF SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC., a Nevada corporation ARTICLE I OFFICES Section 1. PRINCIPAL OFFICES. The principal office shall be in the City of Las Vegas, County of Clark, State of Nevada. Section 2. OTHER OFFICES. The board of directors may at any time establish branch or subordinate offices at any place or places where the corporation is qualified to do business. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. PLACE OF MEETINGS. Meetings of stockholders shall be held at any place within or without the State of Nevada designated by the board of directors. In the absence of any such designation, stockholders' meetings shall be held at the principal executive office of the corporation. Section 2. ANNUAL MEETINGS. The annual meetings of stockholders shall be held at a date and time designated by the board of directors. (At such meetings, directors shall be elected and any other proper business may be transacted by a plurality vote of stockholders.) Section 3. SPECIAL MEETINGS. A special meeting of the stockholders, for any purpose or purposes whatsoever, unless prescribed by statute or by the articles of incorporation, may be called at any time by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders holding shares in the aggregate entitled to cast not less than a majority of the votes at any such meeting. The request shall be in writing, specifying the time of such meeting, the place where it is to be held and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the chairman of the board, the president, any vice president or the secretary of the corporation. The officer receiving such request forthwith shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Sections 4 and 5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 3 shall be construed as limiting, fixing or affecting the time when a meeting of stockholders called by action of the board of directors may be held. Section 4. NOTICE OF STOCKHOLDERS' MEETINGS. All notices of meetings of stockholders shall be sent or otherwise given in accordance with Section 5 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting being noticed. The notice shall specify the place, date and hour of the meeting and (i) in the case of a special meeting the general nature of the business to be transacted, or (ii) in the case of the annual meeting those matters which the board of directors, at the time of giving the notice, intends to present for action by the stockholders. The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees which, at the time of the notice, management intends to present for election. If action is proposed to be taken at any meeting for approval of (i) contracts or transactions in which a director has a direct or indirect financial interest, (ii) an amendment to the articles of incorporation, (iii) a reorganization of the corporation, (iv) dissolution of the corporation, or (v) a distribution to preferred stockholders, the notice shall also state the general nature of such proposal. Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any meeting of stockholders shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the stockholder at the address of such stockholder appearing on the books of the corporation or given by the stockholder to the corporation for the purpose of notice. If no such address appears on the corporation's books or is given, notice shall be deemed to have been given if sent by mail or telegram to the corporation's principal executive office, or if published at least once in a newspaper of general circulation in the county where this office is located. Personal delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication. In the event of the transfer of stock after delivery or mailing of the notice of and prior to the holding of the meeting, it shall not be necessary to deliver or mail notice of the meeting to the transferee. If any notice addressed to a stockholder at the address of such stockholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the stockholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available to the stockholder upon written demand of the stockholder at the principal executive office of the corporation for a period of one year from the date of the giving of such notice. An affidavit of the mailing or other means of giving any notice of any stockholders' meeting shall be executed by the secretary, assistant secretary or any transfer agent of the corporation giving such notice, and shall be filed and maintained in the minute book of the corporation. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 6. QUORUM. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of stockholders shall constitute a quorum for the transaction of business, except as otherwise provided by statute or the articles of incorporation. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Section 7. ADJOURNED MEETING AND NOTICE THEREOF. Any stockholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at such meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at such meeting. When any meeting of stockholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at a meeting at which the adjournment is taken. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. Section 8. VOTING. Unless a record date set for voting purposes be fixed as provided in Section 1 of Article VII of these bylaws, only persons in whose names shares entitled to vote stand on the stock records of the corporation at the close of business on the business day next preceding the day on which notice is given (or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held) shall be entitled to vote at such meeting. Any stockholder entitled to vote on any matter other than elections of directors or officers, may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the stockholder fails to specify the number of shares such stockholder is voting affirmatively, it will be conclusively presumed that the stockholder's approving vote is with respect to all shares such stockholder is entitled to vote. Such vote may be by voice vote or by ballot; provided, however, that all elections for directors must be by ballot upon demand by a stockholder at any election and before the voting begins. When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the articles of incorporation a different vote is required in which case such express provision shall govern and control the decision of such question. Every stockholder of record of the corporation shall be entitled at each meeting of stockholders to one vote for each share of stock standing in his name on the books of the corporation. Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT STOCKHOLDERS. The transactions at any meeting of stockholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to a holding of the meeting, or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any regular or special meeting of stockholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in the second paragraph of Section 4 of this Article II, the waiver of notice or consent shall state the general nature of such proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance of a person at a meeting shall also constitute a waiver of notice of such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice if such objection is expressly made at the meeting. Section 10. STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. All such consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records. Any stockholder giving a written consent, or the stockholder's proxy holders, or a transferee of the shares of a personal representative of the stockholder of their respective proxy holders, may revoke the consent by a writing received by the secretary of the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the secretary. Section 11. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder's attorney in fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless revoked by the person executing it, prior to the vote pursuant thereto, by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by, or attendance at the meeting and voting in person by the person executing the proxy; provided, however, that no such proxy shall be valid after the expiration of six (6) months from the date of such proxy, unless coupled with an interest, or unless the person executing it specifies therein the length of time for which it is to continue in force, which in no case shall exceed seven (7) years from the date of its execution. Subject to the above and the provisions of Section 78.355 of the Nevada General Corporation Law, any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it or a duly executed proxy bearing a later date is filed with the secretary of the corporation. Section 12. INSPECTORS OF ELECTION. Before any meeting of stockholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are appointed, the chairman of the meeting may, and on the request of any stockholder or his proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more stockholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the vacancy may be filled by appointment by the board of directors before the meeting, or by the chairman at the meeting. The duties of these inspectors shall be as follows: (a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) Receive votes, ballots, or consents; (c) Hear and determine all challenges and questions in any way arising in connection with the right to vote; (d) Count and tabulate all votes or consents; (e) Determine the election result; and (f) Do any other acts that may be proper to conduct the election or vote with fairness to all stockholders. ARTICLE III DIRECTORS Section 1. POWERS. Subject to the provisions of the Nevada General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the power and authority to: (a) Select and remove all officers, agents, and employees of the corporation, prescribe such powers and duties for them as may not be inconsistent with law, with the articles of incorporation or these bylaws, fix their compensation, and require from them security for faithful service. (b) Change the principal executive office or the principal business office from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency, or foreign country and conduct business within or without the State; designate any place within or without the State for the holding of any stockholders' meeting, or meetings, including annual meetings; adopt, make and use a corporate seal, and prescribe the forms of certificates of stock, and alter the form of such seal and of such certificates from time to time as in their judgment they may deem best, provided that such forms shall at all times comply with the provisions of law. (c) Authorize the issuance of shares of stock of the corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities cancelled, tangible or intangible property actually received. (d) Borrow money and incur indebtedness for the purpose of the corporation, and cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, or other evidences of debt and securities therefor. Section 2. NUMBER OF DIRECTORS. The authorized number of directors shall be no fewer than one (1) nor more than seven (7). The exact number of authorized directors shall be set by resolution of the board of directors, within the limits specified above. The maximum or minimum number of directors cannot be changed, nor can a fixed number be substituted for the maximum and minimum numbers, except by a duly adopted amendment to this bylaw duly approved by a majority of the outstanding shares entitled to vote. Section 3. QUALIFICATION, ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annual meeting of the stockholders to hold office until the next annual meeting, but if any such annual meeting is not held or the directors are not elected at any annual meeting, the directors may be elected at any special meeting of stockholders held for that purpose, or at the next annual meeting of stockholders held thereafter. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified or until his earlier resignation or removal or his office has been declared vacant in the manner provided in these bylaws. Directors need not be stockholders. Section 4. RESIGNATION AND REMOVAL OF DIRECTORS. Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation, in which case such resignation shall be effective at the time specified. Unless such resignation specifies otherwise, its acceptance by the corporation shall not be necessary to make it effective. The board of directors may declare vacant the office of a director who has been declared of unsound mind by an order of a court or convicted of a felony. Any or all of the directors may be removed without cause of such removal is approved by the affirmative vote of a majority of the outstanding shares entitled to vote. No reduction of the authorized number of directors shall have the effect of removing any director before his term of office expires. Section 5. VACANCIES. Vacancies in the board of directors, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Each director so elected shall hold office until the next annual meeting of the stockholders and until a successor has been elected and qualified. A vacancy in the board of directors exists as to any authorized position of directors which is not then filled by a duly elected director, whether caused by death, resignation, removal, increase in the authorized number of directors or otherwise. The stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent shall require the consent of a majority of the outstanding shares entitled to vote. If the resignation of a director is effective at a future time, the board of directors may elect a successor to take office when the resignation becomes effective. If after the filling of any vacancy by the directors, the directors then in office who have been elected by the stockholders shall constitute less than a majority of the directors then in office, any holder or holders of an aggregate of five percent or more of the total number of shares at the time outstanding having the right to vote for such directors may call a special meeting of the stockholders to elect the entire board. The term of office of any director not elected by the stockholders shall terminate upon the election of a successor. Section 6. PLACE OF MEETINGS. Regular meetings of the board of directors shall be held at any place within or without the State of Nevada that has been designated from time to time by resolution of the board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or without the State of Nevada that has been designated in the notice of the meeting or, if not stated in the notice or there is not notice, at the principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in such meeting can hear one another, and all such directors shall be deemed to be present in person at such meeting. Section 7. ANNUAL MEETINGS. Immediately following each annual meeting of stockholders, the board of directors shall hold a regular meeting for the purpose of transaction of other business. Notice of this meeting shall not be required. Section 8. OTHER REGULAR MEETINGS. Other regular meetings of the board of directors shall be held without call at such time as shall from time to time be fixed by the board of directors. Such regular meetings may be held without notice, provided the notice of any change in the time of any such meetings shall be given to all of the directors. Notice of a change in the determination of the time shall be given to each director in the same manner as notice for special meetings of the board of directors. Section 9. SPECIAL MEETINGS. Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board or the president or any vice president or the secretary or any two directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at his or her address as it is shown upon the records of the corporation. In case such notice is mailed, it shall be deposited in the United States mail at least four (4) days prior to the time of the holding of the meeting. In case such notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours prior to the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated to either the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation. Section 10. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors, subject to the provisions of Section 78.140 of the Nevada General Corporation Law (approval of contracts or transactions in which a director has a direct or indirect material financial interest), Section 78.125 (appointment of committees), and Section 78.751 (indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting. Section 11. WAIVER OF NOTICE. The transactions of any meeting of the board of directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes thereof. The waiver of notice of consent need not specify the purpose of the meeting. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director. Section 12. ADJOURNMENT. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than twenty-four (24) hours, in which case notice of such time and place shall be given prior to the time of the adjourned meeting, in the manner specified in Section 8 of this Article III, to the directors who were not present at the time of the adjournment. Section 14. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board shall individually or collectively consent in writing to such action. Such action by written consent shall have the same force and effect as a unanimous vote of the board of directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board. Section 15. FEES AND COMPENSATION OF DIRECTORS. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the board of directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for such services. Members of special or standing committees may be allowed like compensation for attending committee meetings. ARTICLE IV COMMITTEES Section 1. COMMITTEES OF DIRECTORS. The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of one or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committees, who may replace any absent member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board, shall have all the authority of the board, except with regard to: (a) the approval of any action which, under the Nevada General Corporation Law, also requires stockholders' approval or approval of the outstanding shares; (b) the filing of vacancies on the board of directors or in any committees; (c) the fixing of compensation of the directors for serving on the board or on any committee; (d) the amendment or repeal of bylaws or the adoption of new bylaws; (e) the amendment or repeal of any resolution of the board of directors which by its express terms is not so amendable or repealable; (f) a distribution to the stockholders of the corporation, except at a rate or in a periodic amount or within a price range determined by the board of directors; or (g) the appointment of any other committees of the board of directors or the members thereof. Section 2. MEETINGS AND ACTION BY COMMITTEES. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III, Sections 6 (place of meetings), 8 (regular meetings), 9 (special meetings and notice), 10 (quorum), 11 (waiver of notice), 12 (adjournment), 13 (notice of adjournment) and 14 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members, except that the time or regular meetings of committees may be determined by resolutions of the board of directors and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws. The committees shall keep regular minutes of their proceedings and report the same to the board when required. ARTICLE V OFFICERS Section 1. OFFICERS. The officers of the corporation shall be a president, a secretary and a treasurer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Any two or more offices may be held by the same person. Section 2. ELECTION OF OFFICERS. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 or Section 5 of this Article V, shall be chosen by the board of directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment. The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, a vice president, a secretary and a treasurer, none of whom need be a member of the board. The salaries of all officers and agents of the corporation shall be fixed by the board of directors. Section 3. SUBORDINATE OFFICERS, ETC. The board of directors may appoint, and may empower the president to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the board of directors may from time to time determine. Section 4. REMOVAL AND RESIGNATION OF OFFICERS. The officers of the corporation shall hold office until their successors are chosen and qualify. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the board of directors, at any regular or special meeting thereof, or, except in case of an officer chosen by the board of directors, by any officer upon whom such power or removal may be conferred by the board of directors. Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any such resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. Section 5. VACANCIES IN OFFICES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office. Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if such an officer be elected, shall, if present, preside at all meetings of the board of directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws. If there is no president, the chairman of the board shall in addition be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V. Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, if there be such an officer, the president shall be the chief executive officer of the corporation and shall, subject to the control of the board of directors, have general supervision, direction and control of the business and the officers of the corporation. He shall preside at all meetings of the stockholders and, in the absence of the chairman of the board, of if there be none, at all meetings of the board of directors. He shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of directors or the bylaws. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. Section 8. VICE PRESIDENTS. In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors or the bylaws, the president or the chairman of the board. Section 9. SECRETARY. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and shall record, keep or cause to be kept, at the principal executive office or such other place as the board of directors may order, a book of minutes of all meetings of directors, committees of directors and stockholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors' and committee meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof. The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation's transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary shall give, or cause to be given, notice of all meetings of stockholders and of the board of directors required by the bylaws or by law to be given, and he shall keep the seal of the corporation in safe custody, as may be prescribed by the board of directors or by the bylaws. Section 10. TREASURER. The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director. The treasurer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the board of directors or the bylaws. If required by the board of directors, the treasurer shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS Section 1. ACTIONS OTHER THAN BY THE CORPORATION. The 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, has 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. Section 2. ACTIONS BY THE CORPORATION. The corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees, actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. Section 3. SUCCESSFUL DEFENSE. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 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. Section 4. REQUIRED APPROVAL. Any indemnification under Sections 1 and 2, unless ordered by a court or advanced pursuant to Section 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. Section 5. ADVANCE OF EXPENSES. The 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 section 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 6. OTHER RIGHTS. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this Article VI: (a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the 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 Section 2 or for the advancement of expenses made pursuant to Section 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. (b) 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. Section 7. INSURANCE. The corporation may purchase and maintain insurance on behalf of any person who 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 for any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article VI. Section 8. RELIANCE ON PROVISIONS. Each person who shall act as an authorized representative of the corporation shall be deemed to be doing so in reliance upon the rights of indemnification provided by this Article. Section 9. SEVERABILITY. If any of the provisions of this Article are held to be invalid or unenforceable, this Article shall be construed as if it did not contain such invalid or unenforceable provision and the remaining provisions of this Article shall remain in full force and effect. Section 10. RETROACTIVE EFFECT. To the extent permitted by applicable law, the rights and powers granted pursuant to this Article VI shall apply to acts and actions occurring or in progress prior to its adoption by the board of directors. ARTICLE VII RECORDS AND BOOKS Section 1. MAINTENANCE OF SHARE REGISTER. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the board of directors, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of shares held by each stockholder. Section 2. MAINTENANCE OF BYLAWS. The corporation shall keep at its principal executive office, or if its principal executive office is not in this State at its principal business office in this State, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the stockholders at all reasonable times during office hours. If the principal executive office of the corporation is outside this state and the corporation has no principal business office in this state, the secretary shall, upon the written request of any stockholder, furnish to such stockholder a copy of the bylaws as amended to date. Section 3. MAINTENANCE OF OTHER CORPORATE RECORDS. The accounting books and records and minutes of proceedings of the stockholders and the board of directors and any committee or committees of the board of directors shall be kept at such place or places designated by the board of directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of this corporation and any subsidiary of this corporation. Such inspection by a director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts. The foregoing rights of inspection shall extend to the records of each subsidiary of the corporation. Section 4. ANNUAL REPORT TO STOCKHOLDERS. Nothing herein shall be interpreted as prohibiting the board of directors from issuing annual or other periodic reports to the stockholders of the corporation as they deem appropriate. Section 5. FINANCIAL STATEMENTS. A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for twelve (12) months. Section 6. ANNUAL LIST OF DIRECTORS, OFFICERS AND RESIDENT AGENT. The corporation shall, on or before June 25th of each year, file with the Secretary of State of the State of Nevada, on the prescribed form, a list of its officers and directors and a designation of its resident agent in Nevada. ARTICLE VIII GENERAL CORPORATE MATTERS Section 1. RECORD DATE. For purposes of determining the stockholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days prior to the date of any such meeting nor more than sixty (60) days prior to any other action, and in such case only stockholders of record on the date so fixed are entitled to notice and to vote or to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the Nevada General Corporation Law. If the board of directors does not so fix a record date: (a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. (b) The record date for determining stockholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the board has been taken, shall be the day on which the first written consent is given. (c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later. Section 2. CLOSING OF TRANSFER BOOKS. The directors may prescribe a period not exceeding sixty (60) days prior to any meeting of the stockholders during which no transfer of stock on the books of the corporation may be made, or may fix a date not more than sixty (60) days prior to the holding of any such meeting as the day as of which stockholders entitled to notice of and to vote at such meeting shall be determined; and only stockholders of record on such day shall be entitled to notice or to vote at such meeting. Section 3. REGISTERED STOCKHOLDERS. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada. Section 4. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the board of directors. Section 5. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The board of directors, except as in the bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and, unless so authorized or ratified by the board of directors or within the agency power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount. Section 6. STOCK CERTIFICATES. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each stockholder when any such shares are fully paid, and the board of directors may authorize the issuance of certificates or shares as partly paid provided that such certificates shall state the amount of the consideration to be paid therefor and the amount paid thereon. All certificates shall be signed in the name of the corporation by the president or vice president and by the treasurer or an assistant treasurer or the secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the stockholder. When the corporation is authorized to issue shares of more than one class or more than one series of any class, there shall be set forth upon the face or back of the certificate, or the certificate shall have a statement that the corporation will furnish to any stockholders upon request and without charge, a full or summary statement of the designations, preferences and relatives, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, and, if the corporation shall be authorized to issue only special stock, such certificate must set forth in full or summarize the rights of the holders of such stock. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue. No new certificate for shares shall be issued in place of any certificate theretofore issued unless the latter is surrendered and canceled at the same time; provided, however, that a new certificate may be issued without the surrender and cancellation of the old certificate if the certificate thereto fore issued is alleged to have been lost, stolen or destroyed. In case of any such allegedly lost, stolen or destroyed certificate, the corporation may require the owner thereof or the legal representative of such owner to give the corporation a bond (or other adequate security) sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 7. DIVIDENDS. Dividends upon the capital stock of the corporation, subject to the provisions of the articles of incorporation, if any, may be declared by the board of directors at any regular or special meeting pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the articles of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserves in the manner in which it was created. Section 8. FISCAL YEAR. The fiscal year of the corporation shall be fixed by resolution of the board of directors. Section 9. SEAL. The corporate seal shall have inscribed thereon the name of the corporation, the year of its incorporation and the words "Corporate Seal, Nevada." Section 10. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The chairman of the board, the president, or any vice president, or any other person authorized by resolution of the board of directors by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations, foreign or domestic, standing in the name of the corporation. The authority herein granted to said officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may be exercised by any such officer in person or by any person authorized to do so by proxy duly executed by said officer. Section 11. CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Nevada General Corporation Law shall govern the construction of the bylaws. Without limiting the generality of the foregoing, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person. ARTICLE IX AMENDMENTS Section 1. AMENDMENT BY STOCKHOLDERS. New bylaws may be adopted or these bylaws may be amended or repealed by the affirmative vote of a majority of the outstanding shares entitled to vote, or by the written assent of stockholders entitled to vote such shares, except as otherwise provided by law or by the articles of incorporation. Section 2. AMENDMENT BY DIRECTORS. Subject to the rights of the stockholders as provided in Section 1 of this Article, bylaws may be adopted, amended or repealed by the board of directors. CERTIFICATE OF SECRETARY I, the undersigned, do hereby certify: 1. That I am the duly elected and acting secretary of SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC., a Nevada corporation; and 2. That the foregoing Amended and Restated Bylaws, comprising twenty (20) pages, constitute the Bylaws of said corporation as duly adopted and approved by the board of directors of said corporation by a Unanimous Written Consent dated as of June 25, 1998 and duly adopted and approved by the stockholders of said corporation at a special meeting held on June 25, 1998. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said corporation this 25th day of June, 1998. /s/ Harold Jahn ------------------------------ Harold Jahn, Secretary EX-4.I.C 4 Sustainable Development International, Inc. INCORPORATED UNDER THE LAWS OF THIS STATE OF NEVADA 50,000,000 SHARES COMMON STOCK AUTHORIZED, $.001 PAR VALUE THIS CERTIFIES CUSIP 889323 10 5 THAT SEE REVERSE FOR CERTAIN DEFINITIONS IS THE OWNER OF FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF SUSTAINABLE DEVELOPMENT INTERNATIONAL, INC. transferable on the books of the corporation in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are subject to the laws of this State of Nevada, and to the Certificate of Incorporation and Bylaws of the Corporation, as now hereafter amended. This certificate is not valid unless countersigned by the Transfer Agent. WITNESS the facsimile seal of the Corporation and the signature of its duly authorized officers. DATE Sustainable Development International, Inc. Corporate Seal Nevada PRESIDENT/ SECRETARY EX-10.I.A 5 LIMITED TECHNOLOGY LICENSE AGREEMENT THIS AGREEMENT is made and entered into this 11th day of June 1998, by and between Sustainable Development International Inc., a Nevada, USA Corporation, hereinafter referred to as "Licensee", and ENVIRO-MINING INC., an Alberta, Canada Corporation, hereinafter referred to as "Licensor". WHEREAS, the Licensor expended time, effort, and money to develop and obtain knowledge in the field of science related to an oil rerefining technology for the production of a high grade low sulphur #2 diesel and associated products from waste lubrication oil referred to as "The EMI Process" technology and has established successfully a reputation, demand, and goodwill for such technology; and WHEREAS the Licensee desires to obtain the benefits of the technology established by the licensor and the right to do business under the trade name "The EMI Process" as hereinafter provided. IT IS THEREFORE AGREED between the parties as follows conditional upon due diligence and acceptance of the viability of the technology by SDII. on or before June 11, 1998: 1. License. The Licensee shall have the exclusive right to engage under the terms hereof in the business of producing, merchandising, marketing, distribution, promotion and selling products manufactured by the EMI Process throughout the Territory as defined in Section 5. 2. Term of License. The term of this license shall commence on June 11, 1998, and o for thirty (30) years with an option to renew for ten (10) year periods at the end f the first thirty (30) year period. Should the Licensee refuse to renew at the end of the 30 year period then the Licensee must not use the technology and return it to the Licensor. Should the Licensor refuse to renew at the end of the first 30 year period the Licensor must engage in good faith negotiations to amend this license agreement, or to sell SDII for fair market value to the Licensee. 3. Funds to be paid. A. Funds must be paid to Enviro-Mining Inc. under the following terms. US $300,000 for the EMI Process. B. The Licensee must commence construction in the first twelve (12) months of this agreement, a plant of minimum capacity of 90,000 Tonnes of waste oil input in the Territory. C. It shall be just cause for termination of the Licensee of all license and marketing rights, etc., if SDII has not commenced construction of the first plant within the first year of this license agreement, and an additional commercial scale plant every year thereafter for the next 5 years. 4. Recurring funds to be paid by the Licensee to the Licensor. A. There is an annual recurring fee to be paid as a production royalty. the amount of this fee is negotiable to any amount equal to or less than US $300,000. B. Each additional plant will be subject to a license fee on a negotiated basis at the time an application for a new license is received. 5. Territory. The Territory within which the license and marketing rights, etc., applies is for the Federal Republic of Germany. 6. Confidentiality. Both parties acknowledge the confidential nature of information and procedures which shall be made available to the Licensee by Licensor and either shall disclose to anyone other than an authorized employee any information or procedures of the other party, Any confidential literature or documents given to the other party will be returned at the expiration or termination of this license. This Agreement shall be deemed to be a confidential communication of the parties. 7. Technology Disclosure. Full disclosure of all engineering and process designs will be made available to the Licensee throughout the term of the agreement. 8. Reporting Requirements. a. The Licensee shall submit to the Licensor, on forms approved or provided by the Licensor, such financial or operating information as required by the Licensor to establish the gross revenue and operating efficiencies for the plant. The Licensee, by these presents, consents to the use of such information by the Licensor as the licensor shall, in its sole discretion, determine. The Licensee consents to the use of their information by the licensor for design, publications, and research. All use of the information for marketing and promotional use will be controlled by the Licensee. b. Bi - annual reports to inform the Licensor of the activities and marketing programs of the Licensee must be submitted for review and consultation. This will serve to apprise both parties of improvements to the technology and of contacts interested in the technology. Failure to provide this written communication will be cause for termination. 9. Personnel. The Licensee will hire only those people who have related experience and qualifications to operate a facility of this design and complexity. The Licensor will have the right to review any potential applicant and should these individuals are not acceptable to the Licensor a position will not be offered. 10. Purchase Option. EMI has the option, with ninety (90) days written notice from the Licensee to purchase any and all shares, warrants, options and equity in the operating entity which owns the plant, for fair market value during the term of the agreement. 11. Licensee Undertakings. a. The licensee shall not, during the term of this agreement communicate or divulge to, or use for the benefit of, any other person, partnership, association, or corporation, any information or knowledge concerning the methods of manufacture, promotion, sale, or distribution used or employed by the Licensor in and about its business which may be communicated to the Licensee or which the Licensee may acquire by virtue of this operation under the terms of this agreement; nor will the Licensee do any willful prejudicial or injurious act to the business or goodwill of the Licensor. b. During the term of this agreement, or upon its termination for any cause, the Licensee will not , directly or indirectly, enter the employment of, or render services to, any other person, partnership, association, or corporation engaged in the same or substantially similar business covered by this agreement in any area which can be reasonably termed competitive to the Licensor or any of its licensees; and during such term the licensee will not, within such territory, engage in such business on his own account, or hold out any interest therein, directly or indirectly, as an individual, partner, shareholder, director, consultant, independent contractor, officer, clerk, principal, agent, employee, trustee, or in any relation or capacity whatsoever. c. Upon the termination of this agreement for any cause, the Licensee will immediately discontinue the use of all trade names, trademarks, signs, structures, and forms of advertising indicative of the Licensor or the business or products thereof, and will make or cause to be made such changes in signs, buildings, and structures as the Licensor shall reasonably direct so as to distinguish effectively the same from its former appearance and from any other of Licensor's places of business. If the Licensee shall upon request fail or omit to make such changes or cause them to be made, then the licensor shall have the right to enter upon the premises upon which such business is being conducted without being deemed guilty of trespass or any other tort, and shall have the right to make such charges or cause them to be made at the expense of the Licensee, which expense the Licensee shall pay on demand. The Licensee shall also on request of the Licensor, and upon the payment of the reasonable market value thereof, turn over and deliver to the Licensor, its representatives, agents or assignees, all matters and things bearing the trademark or trade name of the Licensor and any technology developed while this license was exercised. 12. Independence of restrictive covenants. The covenants contained above shall be construed as independent of any other provision of this agreement and independent of each other unless otherwise stated, and the existence of any claim or cause of action of the Licensee against the Licensor, whether predicated on this agreement or otherwise, shall not constitute a defense to the enforcement by the Licensor of such covenants. 13. Reciprocity of restrictive covenants. All restrictions applicable to the Licensee hereinabove, shall also bind and be applicable to the Licensor. 14. Termination. a. If the Licensee shall neglect or fail to perform or observe any of the Licensee's covenants for a period of two (2) months, or if any assignment shall be made of the business for the benefit of creditors, or if a receiver, guardian, conservator, trustee in bankruptcy, or similar officer shall be appointed to take charge of all or part of the Licensee's property, or if the Licensee is adjudicated a bankrupt, then unless such condition or conditions are remedied to the satisfaction of the Licensor within fourteen (14) days after written notice thereof has been given to the Licensee, the license hereunder shall cease. b. In the event of any failure by the Licensee to pay any amounts owed to the Licensor, the Licensor's expenses in collecting same, together with a delinquency charge of one (0.01) cent per month of each dollar or fraction thereof in arrears more than sixty (60) consecutive days from the date first due, and reasonable attorney's fees, shall be paid by the Licensee. c. All agreements, fees, and projects currently in progress or completed previously shall continue as agreed for the duration of the original agreement in the event the Licensee no longer holds a license. 15. Licensor Undertaking. The Licensor shall provide all necessary engineering, feasibilities, and other undertakings requested by the Licensee within a reasonably acceptable timeframe and quality at the expense of the Licensee. 16. Complete agreement; waivers. This agreement contains the entire agreement of the parties, and no representations, inducements, promises, or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. No failure of the parties to exercise any right given to them hereunder, or to insist upon strict compliance by the other party with any obligations hereunder, and no customs or practice of the parties at variance with the terms hereof shall constitute a waiver of the other party's rights to demand exact compliance with the terms hereof. Waiver by the parties of any particular default by the other party shall not affect or impair the other's rights in respect to any subsequent default of the same or of a different nature, nor shall any delay or omission of the other to exercise any rights arising from such default affect or impair the other's rights as to such default or any subsequent default. 17. Separability of provisions. If any covenant or other provision of this agreement is invalid, illegal, or incapable of being enforced, by reason of any rule of law, administrative order, judicial decision or public policy, all other conditions and provisions of this agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision unless so expressed herein. 18. Assignability. This agreement shall inure to the benefit of the heirs, successors and assigns of the Licensor and Licensee. The Licensor and Licensee shall have the right to assign their rights under this agreement to any person, firm, association, or corporation; except that any assignment by the Licensee must be approved in writing by the Licensor. Such approval will not be unreasonably withheld. Such assignment shall not be binding upon the parties unless the transferee has agreed in writing to assume all of the parties obligations to the terms of this agreement. 19. Governing Law. This agreement, and the transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the laws of the Province of Alberta, Canada. The parties herein waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in the City of Edmonton, Province of Alberta, Canada. In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. In such event, no action shall be entertained by said court or any court of competent jurisdiction if filed more than one year subsequent to the date the cause(s) of action actually accrued regardless of whether damages were otherwise as of said time calculable. 20. Contractual Procedures. Unless specifically disallowed by law, should litigation arise hereunder, service of process thereof may be obtained through certified mail, return receipt requested; the parties hereto waiving any and all rights they may have to object to the method by which service was perfected. 21. Arbitration. Any controversy or claim arising out of or relating to this document/contract or the breach thereof, and which is not settled between the signatories themselves, shall be settled by arbitration in accordance with the rules of the arbitration committee of the international chamber of commerce in Paris (France) with hearings to take place in Paris (France) or other mutually agreed location and judgment upon award rendered by the arbitration(s) may be entered in any court having jurisdiction thereof including the award to the aggrieved signatory or signatories, such awarding related to the total remuneration received as a result of business conducted with the parties covered by this agreement plus any and all court costs, attorney fees, and any other costs or charges reasonably necessary to adjudicate the controversy in addition to any and all damages deemed fair by the arbitrator(s). 22. Extraordinary remedies. To the extent recognizable at law, the parties hereto, in the event of breach and in addition to any and all other remedies available thereto, may obtain injunctive relief, regardless of whether the injured party can demonstrate that no adequate remedy exists at law. Moreover, breach or threatened breach by the Licensor of Licensee's rights to Licensee's exclusive Territory may be enjoined without further notice to Licensor, so long as Licensee is given the opportunity to appear and contest within thirty (30) days thereof. Any and all parties related to or affiliated with such breach or threatened breach shall be similarly enjoined. IN WITNESS WHEREOF the parties have executed this Agreement. Signed, sealed and delivered in the presence of : "LICENSOR" ____________________________ /S/Lew Mansell ------------------------------- Witness LEW MANSELL VICE PRESIDENT ENVIRO-MINING INC. CITY OF EDMONTON, ALBERTA, CANADA DATE June 11, 1998 "LICENSEE" ____________________________ /s/Harold Jahn ---------------------------------- Witness HAROLD JAHN PRESIDENT SUSTAINABLE DEVELOPMENT INTERNATIONAL INCORPORATED CITY OF LAS VEGAS, NEVADA, USA DATE June 11, 1998 EX-10.I.B 6 C O N T R A C T of Input of Electricity into the Net of TEAG Thueringer Energie AG between Umweltservice Europa GmbH Sustainable Development International Inc. 124 Street Number 10240 Suite 208 Edmonton T5N 3W6 Alberta Canada - -following "Operating Company of Electricity Plant"- and TEAG Thueringer Energie AG Schwerborner Strasse 30 Postfach 450 99009 Erfurt Deutschland - -following named as "TEAG"- 1. Content of Contract This contract defines the Sale and Revenue of electricity. 1.1 Delivery of Electricity from the Operating Company of the Electricity Plant to TEAG The Operating Company of the Electricity Plant offers the surplus of Electricity that is produced and not used in the Electricity Plant in 36460 Merkers to TEAG at the conditions of this contract. Their own use includes all energy needed in the industrial plants of the Operating Company of the Electricity Plant. The connecting plant of the TEAG terminates at transmission connection point of the switchgear to be confirmed after viewing and finalizing of the technical concept. The ending point of the connecting plant is the point of Transfer. The Set up/Expansion/Change and Operation of the electrical Plants behind the Transfer point (side of the Operating Company), with the exception of the Meter Equipment site, lies with the Operating Company of the Electricity Plant. Each Contract Partner is financially responsible for the upkeep of their own plants. Additional to the costs of building the connecting plant and the necessary methods in the already completed Net of the TEAG, does the owner of the Operating Company of the Electricity Plant pay a connecting fee usually based on the conditions in the connecting agreement. The Operating Company of the Electricity Plant delivers Alternating current of 110 000 Volt and 50 Hertz up to a maximum of 106 000 kW (Delivery ability) at a cost of 0,97 inductive in the 110 kV-Net at the Transfer point to the TEAG. Changes of Delivery ability or of the Energy carrier, require Agreements, particularly about the adaptation of the connecting plant as well as the responsibility of costs. 1.1.2 The TEAG includes the available electricity from the Operating Company of the Electricity Plant in its Net, that is mentioned in the framework of this Contract. 1.1.3 The Operating Company of the Electricity Plant consists at the time of the conclusion of this Contract of: Number of Aggregates - with each ...kW (Discussed Capacity) still has to be defined Changes of the above Electricity Plant can only happen in agreement with the TEAG. The Operating Company of the Electricity Plant commits to coordinate these changes in a reasonable timeframe - typically one year before the realization of the changes- with the TEAG and to come to an agreement. 1.1.4 Delivery of Electricity to a third party by the Electricity Plant is by this contract not allowed. The Delivery to a third party has to be separately coordinated before the Delivery starts with the TEAG, so that the technical consequences of meter and net can be checked and necessary parts can be installed. The industrial plants of the Electricity Plant is not subject to this part of the contract. 1.2 Purchase of Electricity of the Electricity Plant from the TEAG The Purchase of Electricity of the Electricity Plant from the TEAG is to be agreed on separately of this contract. 2. The set up and operation of the Electricity Plant 2.1 Set up, Maintenance and Operation of the Plants of Production, Metering and Distribution of Electricity as well as the connection to the Net of the TEAG follows the Guidelines and Regulations of the Verband Deutscher Elektrotechniker (VDE) (the Association of German Electrical technicians) and the particular VDEW-Regulations to the Parallel operation "Technical Regulations Parallel operation of Plants that produce Electricity for their own use with the Middle voltage of the Electricity- Supply-Organization (EVU)". Additional to this have the regulations of the TEAG to be followed upon the conclusion of this contract. 2.2 The Contract Partners commit to keep up and maintain their Plants to prevent disruptions from happening. 2.3 The Operating Company of the Electricity Plant controls the Operation up until the point of Transfer according to point 1.1.1 of this contract as well as the functional efficiency of the Meter equipment and communicates any technical faults immediately according to the Regulation to the next TEAG-Office (see extra Page to Input contract - Appendix 4). 3. Disturbances and Regulate Downtime, Financial Responsibility 3.1 The Contract partners commit to fix or repair any Disruptions, Maintenance Procedures or similar activities on the Plants, which would require an interuption or limitation of the Electricity Delivery in the fastest time possible. TEAG has to be notified four months before the beginning of the Calendar year about all downtime of the Electricity Plant as a consequence of Revisions as well as start and duration. 3.2 The Operating Company of the Electricity Plant has the obligation - - upon request of the TEAG, to disconnect the Electricity Plant from the Net in case of technical reasons. The TEAG has the right to disconnect the Electricity Plant immediately from the Net in case of Danger or Disturbance. 3.3 The Net of Electricity Supply of the TEAG has a build in Short- Disruption- Protection. The Operating Company of the Electricity Plant is responsible to protect his own Plants from any damages that may happen because of this device. 3.4 For Damages that the Contract Partners cause each other, created through the Interruption or irregular Supply of Electricity, will the financial responsibility after closer Clarification of the Point 4 "Conditions of the Supply of Electricity for Special-Contract- Customers from the TEAG Net" (Appendix 2) the reason as well as the amount be defined. In all other cases is the financial responsibility of the Contract partners within the legal Regulations in the accordance, that the financial responsibility is limited to the replacement of the direct Damage. The financial responsibility for indirect Damages and their Consequences, especially for loss of profit, loss of Production, Earnings and Use, is out of the question. 4. Meter Equipment 4.1 The Electricity delivered from the Electricity Plant to the TEAG is on the side of the 110 000 Volt measured through: 1 Meter Cabinet for one Measurement-Distance with 1 registering Measurement (will be defined at a later time) 1 High voltage-Voltage changer 1 High voltage-Electricity changer 4.2 For the Meter equipment that TEAG provides has the Operating Company of the Electricity Plant to pay a monthly amount according to the Meter-Price-Sheet an amount of 1,5 Percent of the particular Re- Buy-Price. As well, the Operating Company of the Electricity Plant a Use- Amount for the Online-Data-Distance-Transmission, see Meter-Price-Sheet. The Meter-Price will be calculated using TEAG's existing billing system. The TEAG has the right to adjust the Meter-Prices. 5. Payment The TEAG pays for the Electricity, based on the agreed Input-Capacity (Point 1 in this contract) and according to point 4.1 of this contract. The payment for the Input of Electricity is a summary of the whole year of the Price (see in Price-Sheet) for the delivered Electricity. The input of Electricity is subject according to the various High- Charge and Low-Charge prices as indicated on the Price-Sheet. High-Charge (HT) applies between Monday and Friday from 6.00 A.M. and 22.00 h (P.M.) and on Saturdays from 6.00 A.M. and 13.00 h (P.M.). For all other times, including statutory holidays in Thueringen (Germany) apply the Low-Charge (NT) Prices. The TEAG has the right to change the Time-Charges. The TEAG will communicate this to the Operating Company of the Electricity Plant in an appropriate timeframe. In the High-Charge times as mentioned above, the Electricity Plant commits to supply between 96 and 106 MW to the TEAG. If this input- capacity in the High-Charge times is not fulfilled, if the supply is lower than 96 MW, when possible and available, will the payment be according to the Low-Charge Price-Schedule. If the supply capacity is 20% under the 96 MW mark, will the payment be according to the Minimum-Schedule on the Price-Sheet. In case of no input from the Electricity Plant in High-Charge Times and the TEAG must purchase the required Electricity from other sources to unfavorable conditions, the Electricity Plant pays the difference to the Price according to the High-Charge Times to the TEAG. 6. Adjustment to changes of the electricity-economical conditions of the TEAG If there are any changes electricity-economically for the TEAG within the timeframe of this contract or Price-Sheet changes happen, the TEAG has the right to do an adjustment to the contract as well as to the Price-Schedule. The changes will be announced in writing 3 months in advance. As well the conditions in point 5 of this contract are to be followed. According to Input-Capacity, Input-Conditions and Competition- Situation as well as changes in Economical Situations, the TEAG has the right to adjust the prices on a yearly basis on the 30th of Payment 7. Billing and Payment 7.1 The billing year of the TEAG begins on the 1st of October and ends on the 30th of September. The TEAG has the right to change the billing year. 7.2 For the reading of the Meter equipment and billing of the Electricity-Input are following guidelines: The reading of the Meter equipment will be done at the end of each month by the TEAG. According to the Meters, the TEAG will be issued a credit. The credit will be accepted up to 25 days after the last month's calculation period. The TEAG is willing to agree on a different timeframe of reading the Meter equipment and Billing period, if so desired by the Operating Company of the Electricity Plant. 7.3 Should the Operating Company of the Electricity Plant decide to discontinue their supply to the TEAG, the company commits to communicate this immediately to the TEAG. 8. Start and Duration of Contract, Clause of exiting the Contract Agreement 8.1 The Contract starts with the legal Signatures of both Contract Partners, however not before the start of operation of the Connection- Plant or the start of operation of the Electricity Plant. The duration is at first eight years till the end of the business year 31st of December 2007. After that time, each extension of the Contract is 12 months, if the Contract is not canceled in writing three months prior to yearend. The agreements of Supply, Purchase and Payment of Electricity according to point 1.1 and 6 will take place at the point of starting the operation of the Connection Plant as well as the Meter Equipment. 8.2 Should the TEAG receive an offer of a third party that would, after proving its viability, supply Electricity to a lower price and fulfill all other conditions, with a price difference of 3% during the time of Contract, the TEAG will, based on this offer, ask for new price negotiations with the Operating Company of the Electricity Plant. If the Operating Company of the Electricity Plant doesn't fulfill the new conditions, after adjusting the Contract, has the TEAG the right to discontinue this contract with a three months notice. 8.3 Should the price adjustment according to the Competition situation as well as the changes at the time of the introduction of the Electricity price-Index according to point 5 as well as changes according to Appendix 1, point 3 not be recognized and not confirmed from the Electricity Plant and an adjustment of the contract does not take place, has the TEAG the right to discontinue this contract with a three months notice. 8.4 Should the Operating Company of the Electricity Plant close the Plant permanently, the contract will be ceased at the end of the month. The permanent closing of the Plant will be communicated - usually one year and three months before actual close down - to the TEAG. 8.5 If defects in the Electricity Plant are not taken care of by the Operating Company, even though the TEAG has asked for the correction, has the TEAG the right to resign from this Contract immediately. 8.6 In the case of cancellation of this contract, there will be no possibility of working with the Parallel operation of the Electricity Plant and the TEAG Net. 9. Place of legal Jurisdiction 9.1 The Place of Jurisdiction and Performance is the headquarters of TEAG, except in cases whereby an outside Court of Law has jurisdictional precedent. At the time of the conclusion of this Contract it is Erfurt (Germany) 9.2 Verbal Agreements have no validity; changes and additions of this contract must be done in written form. 10. Other Regulations The observance of the VDEW-Regulations to the Parallel operation "Technical Regulations Parallel operation of Plants that produce Electricity for their own use with the Middle voltage of the Electricity-Supply-Organization (EVU)" and Appendix 1 as well as point 3 mentioned Regulation in times of disruptions, the scheduled downtimes including financial responsibility represent an important part of this contract, as long as the Contract doesn't define anything else for specific cases. 11. General Clause 11.1 If individual Regulations of this Contract are ineffective or become ineffective, will all other Agreements still be in effect. The Contract Partners commit to update these agreements to benefit of both parties as their situations change or improve. For common errors in the Contract are to be handled the same as above. 11.2 In case of Disagreement that is related to this Contract, the appropriate Court of Laws will represent the executive power in situations, where there cannot be an amicable agreement between the two parties in a regular court of law. 11.3 To ensure the appropriate Fulfillment of this Contract, the TEAG saves the ongoing data for electricity supply tariff base. 11.4 This Contract has two Copies, each Contract partner has one copy. 11.5 If arrangements of this Contract for its Effectiveness according to the laws of Competition-Restriction have to be registered with the Cartel-Registry, the registration will be done by TEAG. Any resulting costs shall be borne by both parties equally. .........................................., the........................ Erfurt, December 2, 1998 Operating Company of the Electricity Plant TEAG Thueringer Energie AG Umweltservice Europa GmbH Sustainable Development International Inc. Appendix - Index for the Contract of Input of Electricity between TEAG Thueringer Energie AG and Umweltservice Europa GmbH (Sustainable Development International Inc.) Appendix 1 - Payment regulation and Price-Sheet Appendix 2 - Supply Conditions Conditions for the Supply of Electricity of Special- Contract-Clients form the TEAG Net Appendix 3 - VDEW-Regulations to Parallel operation "Technical Regulations Parallel operation of Plants that produce Electricity for their own use with the Middle voltage of the Electricity- Supply-Organization (EVU)" Appendix 4 - Extra Page: Announcements of Disruptions/Regulation Appendix 5 - Price-Sheet Price-Sheet for Input of Electricity from Power stations on the basis of rational Energy-Usage Payment Schedule (Updated: October 10, 1998) High-Charge times (HT) Supply Commitment January - March Monday - Friday 6.00 - 22.00 h 8.0 Pf/kWh April - June Monday - Friday 6.00 - 7.00 h 5.5 Pf/kWh 7.00 - 19.00 h 8.0 Pf/kWh 19.00 - 22.00 h 5.5 Pf/kWh July - September Monday - Friday 6.00 - 7.00 h 5.5 Pf/kWh 7.00 - 16.00 h 8.0 Pf/kWh 16.00 - 22.00 h 5.5 Pf/kWh October - December Monday - Friday 6.00 - 22.00 h 8.0 Pf/kWh Year round Saturdays 6.00 - 13.00 h 4.2 Pf/kWh Low-Charge times (NT) 4.2 Pf/kWh Minimum Payment 3.0 Pf/kWh 3. Sales Tax - The listed prices are net prices; upon written confirmation of the calculation for the right of Sales Tax is presented, these prices will bear the Sales Tax (Goods- and Service Tax) in an amount to be the existing tax laws of Germany. Upon the issuance of the invoice of the sales tax to the Operating Company of the Electricity Plant, they shall be realized.
EX-24 7 Chartered Accountants Management Consultants Canadian Member Firm of Grant Thornton International GRANT THORNTON February 17, 1999 Re: Sustainable Development International Inc. Consent of Independent Accountants As independent chartered accountants, we hereby consent to the use of our report and to all references to our firm included in, or made a part of, this registration statement. /s/Grant Thornton GRANT THORNTON 2400 Scotia Place 1 10060 Jasper Avenue Edmonton, Alberta T5J 3R8 Tel: (403) 422-7114 Fax: (403) 426-3208 e-mail: edmonton@GrantThornton.ca EX-27 8
5 5-MOS OCT-31-1998 OCT-31-1998 330,053 0 0 0 0 330,053 0 0 625,886 13,989 0 0 0 664,008 0 625,886 0 0 0 0 52,111 0 0 (52,111) 0 (52,111) 0 0 0 (52,111) (.004) (.004)
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