-----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, E3ICT1E0cnPHUqf2UAHJQZt2gcDQtTDNZ+mEr7LqzID+42ydMWINlN12V+33eCGw WK4uX+mKONYLz+pcFP69Vw== 0000899243-01-500433.txt : 20010511 0000899243-01-500433.hdr.sgml : 20010511 ACCESSION NUMBER: 0000899243-01-500433 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010510 GROUP MEMBERS: ENV. OPPRT. FUND II (INST.) GROUP MEMBERS: ENV. OPPRT. FUND II, L.P. GROUP MEMBERS: ENVIRONMENTAL OPPORTUNITIES FUND LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SYSTEMONE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000934851 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 650226813 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49763 FILM NUMBER: 1628399 BUSINESS ADDRESS: STREET 1: 8305 NW 27TH ST STREET 2: STE 107 CITY: MIAMI STATE: FL ZIP: 33122 BUSINESS PHONE: 3055938015 MAIL ADDRESS: STREET 1: 8305 NW 27TH STREET STREET 2: SUITE 107 CITY: MIAMI STATE: FL ZIP: 33122 FORMER COMPANY: FORMER CONFORMED NAME: MANSUR INDUSTRIES INC DATE OF NAME CHANGE: 19960717 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRONMENTAL OPPORTUNITIES FUND LP CENTRAL INDEX KEY: 0001088395 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3100 CHASE TOWER CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132243100 MAIL ADDRESS: STREET 1: 3100 CHASE TOWER CITY: HOUSTON STATE: TX ZIP: 77002 SC 13D 1 dsc13d.txt ENVIRONMENTAL OPPORTUNITIES FUND, L.P. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. _____)* SYSTEMONE TECHNOLOGIES, INC. (Name of Issuer) Common Stock (Title of Class of Securities) 81787Q 10 4 (CUSIP Number) Bruce R. McMaken 600 Travis, Suite 3100, Houston, Texas 77002 713-224-3100 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 17, 1999, May 2, 2000, August 7, 2000, and November 10, 2000 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Note. Schedules filed in paper form shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 81787Q 10 4 13D Pages 2 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Environmental Opportunities Fund, L.P. Environmental Opportunities Fund II (Institutional), L.P. Environmental Opportunities Fund II, L.P. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware limited partnerships - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 2,171,365 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 2,171,365 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,171,365 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 31.4% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 PN - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Pages 3 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Environmental Opportunities Fund, L.P. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware Limited Partnership - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 492,257 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 492,257 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 492,257 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 9.40% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 PN - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Pages 4 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Environmental Opportunities Fund II, L.P. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware Limited Partnership - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 359,277 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 359,277 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 359,277 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 7.04% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 PN - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Pages 5 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Environmental Opportunities Fund II (Institutional), L.P. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware Limited Partnership - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 1,319,831 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 1,319,831 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,319,831 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 21.77% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 PN - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Pages 6 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Environmental Opportunities Management Company, L.L.C. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [_] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware limited liability company - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 492,257 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 492,257 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 492,257 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 9.40% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 OO - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Pages 7 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Fund II Mgt. Co., LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [_] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware limited liability company - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 1,679,108 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 1,679,108 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,679,108 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 26.15% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 OO - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Page 8 of 22 Pages - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS/ 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Sanders Morris Harris Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) 2 (a) [_] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 WC, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Texas - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 2,171,365 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY None ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 2,171,365 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 None - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,171,365 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 (See Instructions) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 31.4% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (See Instructions) 14 CO - ------------------------------------------------------------------------------ CUSIP NO. 81787Q 10 4 13D Page 9 of 22 Pages Item 1. Security and Issuer. This statement relates to the common stock of SystemOne Technologies, Inc., a Florida corporation. The principal executive office of the issuer of such securities is located at 8305 N.W. 27th Street, Suite 107, Miami, Florida 33122. Item 2. Identity and Background. Environmental Opportunities Fund, L.P. is a Delaware limited partnership ("EOF") whose principal business is making investments in the securities of other entities. The address of its principal office is 600 Travis, Suite 3100, Houston, Texas 77002. Environmental Opportunities Management Company, L.L.C. (the "EOF GP") is a Delaware limited liability company and the sole general partner of EOF. The principal business of EOF GP is to act as general partner of EOF. The address of its principal office is 600 Travis, Suite 3100, Houston, Texas 77002. The disposition of investments owned by EOF is determined by the investment committee of EOF GP. Attached as Appendix B is information concerning the members of the investment committee required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D. Such persons may be deemed, but are not conceded to be, controlling persons of EOF GP. Environmental Opportunities Fund II, L.P. ("Fund II") and Environmental Opportunities Fund II, (Institutional), L.P. ("EOF II Institutional") are Delaware limited partnerships whose principal business is making investments in the securities of other entities. The address of their principal office is 600 Travis, Suite 3100, Houston, Texas 77002. EOF, Fund II, and EOF II Institutional are referred to collectively as the "Funds." Fund II Mgt. Co., LLC (the "EOF II GP") is a Delaware limited liability company and the sole general partner of Fund II and EOF II Institutional. The principal business of EOF II GP is to act as general partner of such funds. The address of its principal office is 600 Travis, Suite 3100, Houston, Texas 77002. The disposition of investments owned by Fund II and EOF II Institutional is determined by the investment committee of EOF II GP. Attached as Appendix B-1 is information concerning the members of the investment committee required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D. Such persons may be deemed, but are not conceded to be, controlling persons of EOF II GP. Sanders Morris Harris Inc. is a Texas corporation and the controlling member of EOF GP and EOF II GP. The address of its principal office is 600 Travis, Suite 3100, Houston, Texas 77002. Attached as Appendix A is information concerning the executive officers and directors of Sanders Morris Harris required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D. Such executive officers and directors may be deemed, but are not conceded to be, controlling persons of Sanders Morris Harris. Sanders Morris Harris is a wholly CUSIP NO. 81787Q 10 4 13D Page 10 of 22 Pages Item 2. (Continued) owned subsidiary of Pinnacle Global Group, Inc. Sanders Morris Harris is a registered broker/dealer. Pinnacle Global Group, Inc. is a Texas corporation and the parent of Sanders Morris Harris. The address of its principal office is 5599 San Felipe, Suite 301, Houston, Texas 77056. Attached as Appendix A-1 is information concerning the executive officers and directors of Pinnacle Global Group required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D. Such officers and directors may be deemed, but are not conceded to be controlling, persons of Pinnacle Global Group. No corporation or other person is or may be deemed to be ultimately in control of Pinnacle Global Group. During the past five years, none of the reporting persons or any of the persons referred to in Appendices A, A-1, B, and B-1 has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors). During the past five years, none of the reporting persons or any of the persons referred to in Appendices A, A-1, B, and B-1 was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws as a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Item 3. Source and Amount of Funds or Other Consideration. On May 17, 1999, EOF purchased 20,200 shares of Series B Convertible Preferred Stock, $1.00 par value ("Series B Preferred Stock") of the Issuer for an aggregate consideration of $2,020,000, Fund II purchased 6,484 shares of Series B Preferred Stock for an aggregate consideration of $648,400, and EOF II Institutional purchased 23,816 shares of Series B Preferred Stock for an aggregate consideration of $2,381,600. The source of these funds was working capital of the Funds. As of December 31, 2000, each share of Series B Preferred stock is convertible into 21.37 shares of common stock of the Issuer. On May 2, 2000, Fund II purchased 2,140 shares of Series D Convertible Preferred Stock, $1.00 par value ("Series D Preferred Stock") of the Issuer, together with warrants (the "Series D Warrants") to acquire 61,143 shares of common stock of the Issuer for an aggregate consideration $214,000 and EOF II Institutional purchased 7,860 shares of Series D Preferred Stock, together with Series D Warrants to acquire 224,571 shares of common stock of the Issuer for an aggregate consideration of $786,000. The source of these funds was a margin loan extended by Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation, which was repaid with a loan extended to the Funds by Fund II GP. As of December 31, 2000, each share of Series D Preferred Stock is convertible into 28.57 shares of common stock of the Issuer. The Series D Warrants are exercisable for five years at a price of $3.50 per share. On August 7, 2000, Fund II loaned the Issuer $267,5000 and in connection with such loan received warrants (the "August 2000 Warrants") to purchase 76,429 CUSIP NO. 81787Q 10 4 13D Page 11 of 22 Pages Item 3. (Continued) shares of common stock of the Issuer and EOF II Institutional loaned the Issuer $982,500 and in connection with such loan received August 2000 Warrants to purchase 280,714 shares of common stock of the Issuer. The source of these funds was a loan to Fund II by EOF II GP. On November 10, 2000, Fund II loaned the Issuer $85,600 and in connection with such loan received warrants (the "November 2000 Warrants") to purchase 24,457 shares of common stock of the Issuer and EOF II Institutional loaned the Issuer $314,400 and in connection with such loan received November 2000 Warrants to purchase 89,829 shares of common stock of the Issuer. The source of these funds was a loan to Fund II by Hanseatic Americas LDC, which was repaid with a loan extended to Fund II by EOF II GP. Item 4. Purpose of Transaction. On May 17, 1999, the Funds acquired 50,000 shares of Series B Preferred Stock in a privately negotiated transaction. The Funds entered into this transaction for general investment purposes. On May 2, 2000, the Funds acquired 10,000 shares of Series D Preferred Stock and Series D Warrants to purchase 285,714 shares of common stock of the Issuer, in a privately negotiated transaction. The Funds entered into this transaction for general investment purposes. On August 7, 2000, the Funds received August 2000 Warrants to purchase 370,543 shares of common stock of the Issuer in connection with a privately negotiated loan transaction. The Funds entered into this transaction for general investment purposes. On November 10, 2000, the Funds received November 2000 Warrants to purchase 100,886 shares of common stock of the Issuer in connection with a privately negotiated loan transaction. The Funds entered into this transaction for general investment purposes. The August 2000 Warrants and the November 2000 Warrants were consolidated into warrants (the "Substitute Warrants")to purchase an aggregate of 471,429 shares of common stock (subject to adjustment), at a price of $3.50 per share until August 7, 2005. The Substitute Warrants provide that, prior to August 7, 2001, the Funds may not exercise the Substitute Warrants to acquire more than 75% of the maximum number of shares issuable thereunder. In addition, the Issuer has agreed that, if it does not repay the August and November 2000 loans on or before February 7, 2002, the Issuer will issue to the Funds additional warrants (the "Additional Warrants") to purchase up to 471,429 shares of common stock, at a price of $3.50 per share (subject to adjustment). The issuance of the Additional Warrants remains subject to any shareholder approval required by The Nasdaq Stock Market. On May 2, 2000, in connection with the acquisition by the Funds of their Series D Preferred Stock and Warrants, the Funds entered into a shareholders agreement dated May 2, 2000 (the "Shareholders Agreement") with the Issuer and certain other shareholders, pursuant to which the Board of Directors of the CUSIP NO. 81787Q 10 4 13D Page 12 of 22 Pages Issuer was set at five persons, two of whom shall be nominated by written instruction delivered by the holders of two-thirds or more of the outstanding shares of Series D Preferred Stock (the "Required Preferred Shareholders"). In accordance with such arrangements, the Funds designated Kenneth C. Leung and the other holders of Series D Preferred Stock, designated Paul A. Biddelman, for election to the Board of Directors. The parties to the Shareholders Agreement have agreed to vote, and to cause their affiliates to vote, the securities of the Issuer respectively beneficially owned by them, within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 (the "Exchange Act"), for, and the Issuer has agreed to take all action to cause, the election of such designees and, as successors thereto, respectively, those replacements nominated in the same manner. The Shareholders Agreement further requires: (i) the appointment of executive, audit and finance and compensation committees of the Board of Directors of the Issuer, with the mandate thereof to be subject to approval by the directors nominated by the Required Preferred Shareholders; (ii) for such directors to serve on each such committee; and (iii) for a majority of the members of each such committee to consist of independent directors. The foregoing provisions of the Shareholders Agreement remain in effect until: (i) early conversion of the Series D Preferred Stock, Series B Preferred Stock and Series C Convertible Preferred Stock, $1.00 par value (the "Series C Preferred Stock"), in accordance with the terms thereof, affecting 50% or more of the shares owned by the holders of such stock (the "Preferred Shareholders") on the Closing Date ("Early Conversion Event"); or (ii) the Preferred Shareholders beneficially own less than 50% of the shares owned by them on the Closing Date (an "Ownership Event") and such shares entitle the holders to cast votes totaling less than 20% of all votes cast by the Issuer's voting securities (a "Voting Event"). The Shareholders Agreement also provides for specified additional actions during a period (the "Special Term") expiring on the earliest of the Early Conversion Event, the Ownership Event, or the Voting Event. During the Special Term, in the event the Issuer fails to achieve certain results during the third quarter of 2000, the Required Preferred Shareholders may elect to require the Issuer to obtain the immediate resignation of an independent director from the Board of Directors, failing which the Board of Directors shall be expanded by two, with all such vacancies to be filled by nominees of the Required Preferred Shareholders. During the Special Term, certain specified determinations by the Board of Directors of the Issuer, including authorization of any merger plan or similar transaction or material acquisition, the issuance of certain securities or the employment of senior management, require concurrence of the directors designated by the Required Preferred Shareholders. Dividends on the Series D Preferred Stock accrue at the rate of 8.25% per annum based on the liquidation preference thereof, and are payable semi-annually in additional shares of Series D Preferred Stock, valued at their liquidation preference, through the second anniversary of issuance and thereafter in cash or additional shares at the election of the Corporation. The shares of Series D Preferred Stock are convertible into a number of shares of Common Stock CUSIP NO. 81787Q 10 4 13D Page 13 of 22 Pages calculated by dividing the liquidation preference of the Series D Preferred Stock by a conversion price of $3.50 per share (subject to adjustment in accordance with the terms thereof), and in specified circumstances are convertible into other securities of the Corporation. The shares of Series D Preferred Stock are subject to mandatory early conversion into Common Stock, in whole or in part, in specified events, may be redeemed at the option of the Issuer subsequent to specified dates at specified premiums on their liquidation preference and must be redeemed at their liquidation preference on May 17, 2004. The terms of the Series D Preferred Stock also entitle the holder to require the Issuer to purchase such shares in specified change-in-control events or upon breach by the Issuer of its commitments to such holder. The Series D Preferred Stock has parity with the Series B Preferred Stock and Series C Preferred Stock in distributions upon any liquidation or dissolution of the Issuer, with all senior in rank to the Common Stock. On all matters voted upon by the shareholders of the Issuer, except as required by law, all such parity series and the Common Stock vote together as a single class (with each share of convertible preferred stock casting a number of votes equal to the number of shares of Common Stock into which it is convertible). Dividends on the Series B Preferred Stock accrue at a rate of 8.25% per annum based on the liquidation preference thereof, and are payable semi-annually in additional shares of Series C Preferred Stock, valued at their liquidation preference, through the second anniversary of issuance and thereafter in cash or additional shares at the election of the Corporation. The shares of Series B Preferred Stock are convertible into a number of shares of Common Stock calculated by dividing the liquidation preference of the Series B Preferred Stock by a conversion price of $4.68 per share (subject adjustment in accordance with the terms thereof). The shares of Series B Preferred Stock are subject to mandatory early conversion into shares of Common Stock, in whole or in part, in specified events, may be redeemed at the option of the Issuer subsequent to specified dates at specified premiums on their liquidation preference and must be redeemed at their liquidation preference on May 17, 2004. The terms of the Series B Preferred Stock also entitle the holder to require the Issuer to purchase such shares in specified change-in-control events or upon breach by the Issuer of its commitments to such holder. Subject to the foregoing, the Funds have acquired all securities of the Issuer that they presently own as an investment. The Funds intend to review continuously their investment in the Issuer and may or may not seek involvement in the Issuer's affairs. Depending on their evaluation of the Issuer's business and prospects and future developments, the Funds, or other individuals or entities that may be deemed to be affiliates of the Funds, may from time to time purchase additional securities of the Issuer, dispose of all or a portion of the securities held by such person, or cease buying or selling shares. Any additional purchases of securities may be in open market or privately negotiated transactions or otherwise. Except as described in this Item 4, the Funds have no present plans or proposals which relate or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer, (b) an extraordinary corporate transaction such as a merger, CUSIP NO. 81787Q 10 4 13D Page 14 of 22 Pages reorganization or liquidation, involving the Issuer or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries, (d) any change in the present board of directors or management of the Issuer, (e) any material change to the present capitalization or dividend policy of the Issuer, (f) any other material change in the Issuer's business or corporate structure, (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person, (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, or (j) any actions similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) The aggregate number and percentage of shares of common stock of the Issuer beneficially owned by the persons identified in Item 2 is as follows: Aggregate Number of Percentage of Beneficial Owner Shares Owned Class Environmental Opportunities Fund, L.P. 492,257(1) 9.40 Environmental Opportunities Fund 359,277(2) 7.04 II, L.P. Environmental Opportunities Fund II (Institutional), L.P. 1,319,831(3) 21.77 Environmental Opportunities Management Company, L.L.C. 492,257(4) 9.40 Fund II Mgt. Co., LLC 1,679,108(5) 26.15 Sanders Morris Harris Inc. 2,171,365(6) 31.40 _____________ (1) Includes 23,035 shares of Series B Preferred Stock that are immediately convertible into 492,257 shares of common stock at a conversion price of $4.68 per share. (2) Includes 7,393 shares of Series B Preferred Stock that are immediately convertible into 157,988 shares of common stock at a conversion price of $4.68 per share; 2,257 shares of Series D Preferred Stock that are immediately convertible into 64,482 shares of common stock at a conversion price of $3.50 per share; a Series D Warrant to purchase 61,143 shares of common stock that is immediately exercisable at an exercise price of $3.50 per share; and a Substitute Warrant to purchase 100,886 shares of common stock that is immediately exercisable or exercisable within 60 days from the date hereof for 75,664 shares of common stock at an exercise price of $3.50 per share. (3) Includes 27,162 shares of Series B Preferred Stock that are immediately convertible into 580,451 shares of common stock at a conversion price of $4.68 per share; 8,292 shares of Series D Preferred Stock that are immediately convertible into 236,902 shares of common stock at a conversion price of $3.50 per share; a Series D Warrant to purchase 224,571 shares of common stock that is immediately exercisable at an CUSIP NO. 81787Q 10 4 13D Page 15 of 22 Pages exercise price of $3.50 per share; and a Substitute Warrant to purchase 370,543 shares of common stock that is immediately exercisable or exercisable within 60 days from the date hereof for 277,900 shares of common stock at an exercise price of $3.50 per share. (4) Includes shares beneficially owned by Environmental Opportunities Fund, L.P. (5) Includes shares beneficially owned by Environmental Opportunities Fund II, L.P. and Environmental Opportunities Fund II (Institutional), L.P. (6) Includes shares beneficially owned by Environmental Opportunities Management Company, L.L.C. and Fund II Mgt. Co., LLC. (b) The number of shares of Common Stock as to which there is sole power to direct the vote, shared power to vote or to direct the vote, sole power to dispose or direct the disposition, or shared power to dispose or direct the disposition for each of the Reporting Persons is set forth on the cover pages, and such information is incorporated herein by reference. To the knowledge of the Reporting Persons, the persons listed on Appendix A in response to Item 2 do not beneficially own any shares of common stock of the Issuer. (c) There have been no reportable transactions with respect to the Common Stock of the Issuer within the last 60 days by any of the Reporting Persons except for the acquisition of beneficial ownership of shares being reported on this Schedule 13D. (d) None (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. In connection with the issuance of the Series D Preferred Stock and Series D Warrants, the Issuer extended certain registration rights to the Funds, which obligate the Issuer to register with the Securities and Exchange Commission the shares of common stock issuable upon conversion of the Series D Preferred Stock or exercise of the Series D Warrants, and to maintain the effectiveness of such registration statement until two years after the date of exercise of the last Warrant to be exercised. In connection with the issuance of the Series B Preferred Stock, the Issuer extended certain registration rights to the Funds, which obligate the Issuer to register with the Securities and Exchange Commission the shares of common stock issuable upon conversion of the Series D Preferred Stock, and to maintain the effectiveness of such registration statement until August 2001. In connection with the issuance of the November 2000 Warrants, the Issuer extended certain registration rights to the Funds, which obligate the Issuer to register with the Securities and Exchange Commission the shares of common stock issuable upon exercise of the Substitute Warrants and the Additional Warrants, and to maintain the effectiveness of such registration statement until two years after the date of exercise of the last Substitute Warrant or Additional Warrant to be exercised. CUSIP NO. 81787Q 10 4 13D Page 16 of 22 Pages Item 6. (Continued) See Item 4 for a description of voting arrangements under the Shareholders Agreement, which information is incorporated herein by reference. Except as stated herein, none of the Funds, EOF GP, EOF II GP, nor Sanders Morris Harris, nor, to the best of the knowledge of the Funds, any of the executive officers or directors listed on Annex A, A-1, B, or B-1, is a party to any contract, arrangement, understanding, or relationship (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to, any transfer or voting of any such securities, finder's fees, joint ventures, loans or option arrangements, puts or calls, guarantees or profits, divisions of profit or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. Exhibit Title A Joint Filing Agreement B Certificate of Designation of Series B Convertible Preferred Stock dated as of May 13, 1999 (incorporated by reference to Exhibit 4.1 of the Issuer's Current Report on Form 8-K filed with the Commission on May 27, 1999). C Certificate of Designation of Series D Convertible Preferred Stock dated as of May 2, 2000 (incorporated by reference to Exhibit 4.1 of the Issuer's Current Report on Form 8-K filed with the Commission on May 15, 2000). D Form of Warrant dated November 10, 2000 (incorporated by reference to Exhibit 4.7 of the Issuer's Annual Report on Form 10-KSB for the year ended December 31, 1000). E Form of Warrant dated May 2, 2000 (incorporated by reference to Exhibit 4.1 of the Issuer's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000). F Shareholders Agreement dated May 2, 2000, among the Issuer and the other parties thereto, including EOF, Fund II, and EOF II Institutional (incorporated by reference to Exhibit 10.1 of the Issuer's Current Report on Form 8-K filed with the Commission on May 15, 2000. G Loan Agreement dated August 7, 2000 among the Issuer, Fund II, EOF II Institutional, and Hanseatic Americas LDC (incorporated by reference to Exhibit 10.1 of the Issuer's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000). CUSIP NO. 81787Q 10 4 13D Page 17 of 22 Pages Item 7. (Continued) H First Amendment to Loan Agreement dated November 10, 2000, among the Issuer, Fund II, EOF II Institutional, and Hanseatic Americas LDC (incorporated by reference to Exhibit 10.7 of the Issuer's Annual Report on Form 10-KSB for the year ended December 31, 2000. I Second Amendment to Loan Agreement dated November 30, 2000, among the Issuer, Fund II, EOF II Institutional, and Hanseatic Americas LDC (incorporated by reference to Exhibit 10.7 of the Issuer's Annual Report on Form 10-KSB for the year ended December 31, 2000. J Letter Agreement dated August 7, 2000, among the Issuer, EOF, Fund II, EOF II Institutional, Pierre Mansur, Paul Mansur, and Hanseatic Americas LDC (incorporated by reference to Exhibit 10.3 of the Issuer's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000). K Series D Convertible Preferred Stock and Warrant Purchase Agreement dated May 2, 2000 entered into, inter alia, by EOF, Fund II, and EOF II Institutional (incorporated by reference to Exhibit B of the Schedule 13D dated May 2, 2000, filed by Hanseatic Americas LDC). L Promissory Note dated January 1, 2001, issued by Fund II payable to the order of Fund II Mgt. Co., LLC in the original principal amount of $594,417.86. M Promissory Note dated January 1, 2001, issued by EOF II Institutional payable to the order of Fund II Mgt. Co., LLC in the original principal amount of $2,252,948.96. N Pledge Agreement dated January 1, 2001, by Fund II in favor of Fund II Mgt. Co., LLC pursuant to which Fund II granted Fund II Mgt. Co., LLC a security interest in all of its assets to secure the promissory note in the original principal amount of $594,417.86. O Pledge Agreement dated January 1, 2001, by EOF II Institutional in favor of Fund II Mgt. Co., LLC pursuant to which EOF II Institutional granted Fund II Mgt. Co., LLC a security interest in all of its assets to secure the promissory note in the original principal amount of $2,252,948.96. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Date: May 8, 2000 Environmental Opportunities Fund, L.P. By: Environmental Opportunities Management Company, L.L.C. By /s/ Bruce R. McMaken ---------------------------------- Bruce R. McMaken, Manager Environmental Opportunities Fund II, L.P. Environmental Opportunities Fund II (Institutional), L.P. By: Fund II Mgt. Co., LLC. By /s/ Bruce R. McMaken ---------------------------------- Bruce R. McMaken, Manager ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (see 18 U.S.C. 1001). CUSIP NO. 81787Q 10 4 13D Page 18 of 22 Pages Exhibit A After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Date: May 8, 2001 Signatures: Environmental Opportunities Management Company, LLC By /s/ Bruce R. McMaken ---------------------------------- Name: Bruce R. McMaken Title: Manager Fund II Mgt. Co., LLC By /s/ Bruce R. McMaken ---------------------------------- Name: Bruce R. McMaken Title: Manager Sanders Morris Harris Inc. By /s/ Bruce R. McMaken ---------------------------------- Name: Bruce R. McMaken Title: Senior Vice President ___________ Each Reporting Person certifies only the information in Item 4 regarding, himself or itself, as the case may be. CUSIP NO. 81787Q 10 4 13D Page 19 of 22 Pages Appendix A Directors and Executive Officers of Sanders Morris Harris Inc. The following table sets forth the name, business address, and present principal occupation or employment of each director and executive officer of Sanders Morris Harris Inc. Unless otherwise indicated below, each such person is a citizen of the United States and the business address of each such person is 600 Travis, Suite 3100, Houston, Texas 77002. Except as indicated below, during the last five years, none of the persons listed below has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws as a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Present Principal Occupation or Employment; Name Business Address - ---- ---------------- Don A. Sanders Chairman of the Executive Committee and Director Ben T. Morris President, Chief Executive Officer, and Director George L. Ball Chairman of the Board Titus H. Harris, Jr. Director and Executive Vice President Richard C. Webb Director and Executive Vice President Anthony J. Barton Director and Executive Vice President Robert E. Garrison II Director, Chairman and CEO of Pinnacle Global Group Stephen M. Reckling Director, Chairman and CEO of Pinnacle Management & Trust Co. Peter M. Badger Director and President of Fixed Income Division R. Larry Kinney Director and Director of Trading Activities Richard D. Grimes Executive Vice President Howard Y. Wong Chief Financial Officer and Treasurer Sandy Williams Secretary CUSIP NO. 81787Q 10 4 13D Page 20 of 22 Pages Appendix A-1 Directors and Executive Officers of Pinnacle Global Group Inc. The following table sets forth the name, business address, and present principal occupation or employment of each director and executive officer of Pinnacle Global Group Inc. Unless otherwise indicated below, each such person is a citizen of the United States and the business address of each such person is 5599 San Felipe, Suite 301, Houston, Texas 77056. Except as indicated below, during the last five years, none of the persons listed below has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws as a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Present Principal Occupation or Employment; Name Business Address - ---- ---------------- Robert E. Garrison II President and Chief Executive Officer Donald R. Campbell Vice Chairman Titus H. Harris, Jr. Chairman of the Board Don A. Sanders Director, Chairman of the Executive Committee of Sanders Morris Harris Ben T. Morris Director, President and CEO of Sanders Morris Harris George L. Ball Director and Chairman of the Board of Sanders Morris Harris Peter W. Badger Director and President of Fixed Income Division Stephen M. Reckling Director, Chairman and CEO of Pinnacle Management & Trust Co. Richard C. Webb Director, Executive Vice President of Sanders Morris Harris W. Blair Waltrip Director, private investor John H. Styles Director, private investor CUSIP NO. 81787Q 10 4 13D Page 21 of 22 Pages Appendix B Members of the Investment Committee of Environmental Opportunities Management Company, L.L.C. The following table sets forth the name, business address, and present principal occupation or employment of each member of the investment committee of Environmental Opportunities Management Company, L.L.C. Unless otherwise indicated below, each such person is a citizen of the United States. Except as indicated below, during the last five years, none of the persons listed below has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws as a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Present Principal Occupation or Employment; Name Business Address - ---- ---------------- Kenneth Ch'uan-K'ai Leung Managing Director of Sanders Morris Harris Inc., his business address is 126 East 56th Street, 24th Floor, New York, New York 10022. Bruce R. McMaken Senior Vice President, Investment Banking of Sanders Morris Harris Inc., his business address is 600 Travis, Suite 3100, Houston, Texas 77002 John Quirk Partner of Quirk Carson Peppet, his business address is 590 Madison Avenue, New York, New York 10022. CUSIP NO. 81787Q 10 4 13D Page 22 of 22 Pages Appendix B-1 Members of the Investment Committee of Fund II Mgt. Co., LLC The following table sets forth the name, business address, and present principal occupation or employment of each member of the investment committee of Fund II Mgt. Co., LLC. Unless otherwise indicated below, each such person is a citizen of the United States. Except as indicated below, during the last five years, none of the persons listed below has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws as a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Present Principal Occupation or Employment; Name Business Address - ---- ---------------- Kenneth Ch'uan-K'ai Leung Managing Director of Sanders Morris Harris Inc., his business address is 126 East 56th Street, 24th Floor, New York, New York 10022. Bruce R. McMaken Senior Vice President, Investment Banking of Sanders Morris Harris Inc., his business address is 600 Travis, Suite 3100, Houston, Texas 77002 EX-99.L 2 dex99l.txt PROMISSORY NOTE Exhibit L PROMISSORY NOTE $594,417.86 Houston, Texas January 1, 2001 ENVIRONMENTAL OPPORTUNITIES FUND II, L.P., a Delaware limited partnership (hereinafter called "Maker"), for value received, agrees to pay as herein provided unto the order of FUND II MGT. CO., L.L.C., a Delaware limited liability company (hereinafter called "Payee"), at its office in Houston, Texas, in lawful money of the United States of America, the principal sum of Five Hundred Ninety Four Thousand Four Hundred Seventeen and 86/100ths Dollars ($594,417.86), together with interest thereon from and after date hereof until maturity at the rate of 11.0 % per annum payable on the maturity date on the then unpaid principal amount hereof, and interest at the rate of 18% per annum from and after maturity until paid. THIS Note is due and payable on the first to occur of December 31, 2001 or the sale or liquidation of any assets of Maker, including capital commitments receivable. IF ANY PAYMENT OF principal or interest on this note shall become due on a Saturday, Sunday, or public holiday under the laws of the State of Texas on which Payee is not open for business, such payment shall be made on the next succeeding business day of Payee. IF DEFAULT is made in the payment of this note at maturity (regardless of how its maturity may be brought about) and the same is placed in the hands of an attorney for collection, or suit is filed hereon, or proceedings are had in bankruptcy, probate, receivership, reorganization, rearrangement, or other judicial proceedings for the establishment or collection of any amount called for hereunder, or any amount payable or to be payable hereunder is collected through any such proceedings, Maker agrees and is also to pay to the owner and holder of this note a reasonable amount as attorney's or collection fees. MAKER expressly waives demand and presentment for payment, notice of nonpayment, notice of intent to accelerate, notice of acceleration, protest, notice of protest, notice of dishonor, bringing of suit, and diligence in taking any action to collect amounts called for hereunder. PAYMENT of this Note is secured by all assets of Maker. Maker shall promptly pay over to Payee as a prepayment on this Note any proceeds from the sale or liquidation of any assets of Maker. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS NOTE shall be governed by the laws of the State of Texas. ENVIRONMENTAL OPPORTUNITIES FUND II, L.P. By: Fund II Mgt. Co., LLC, its General Partner /s/ Bruce R. McMaken ---------------------------------- By: Bruce R. McMaken Manager EX-99.M 3 dex99m.txt PROMISSORY NOTE Exhibit M PROMISSORY NOTE $2,252,948.96 Houston, Texas January 1, 2001 ENVIRONMENTAL OPPORTUNITIES FUND II (INSTITUTIONAL), L.P., a Delaware limited partnership (hereinafter called "Maker"), for value received, agrees to pay as herein provided unto the order of FUND II MGT. CO., L.L.C., a Delaware limited liability company (hereinafter called "Payee"), at its office in Houston, Texas, in lawful money of the United States of America, the principal sum of Two Million Two Hundred Fifty Two Thousand Nine Hundred Forty Eight and 96/100ths Dollars ($2,252,948.96), together with interest thereon from and after date hereof until maturity at the rate of 11.0 % per annum payable on the maturity date on the then unpaid principal amount hereof, and interest at the rate of 18% per annum from and after maturity until paid. THIS Note is due and payable on the first to occur of December 31, 2001 or the sale or liquidation of any assets of Maker, including capital commitments receivable. IF ANY PAYMENT OF principal or interest on this note shall become due on a Saturday, Sunday, or public holiday under the laws of the State of Texas on which Payee is not open for business, such payment shall be made on the next succeeding business day of Payee. IF DEFAULT is made in the payment of this note at maturity (regardless of how its maturity may be brought about) and the same is placed in the hands of an attorney for collection, or suit is filed hereon, or proceedings are had in bankruptcy, probate, receivership, reorganization, rearrangement, or other judicial proceedings for the establishment or collection of any amount called for hereunder, or any amount payable or to be payable hereunder is collected through any such proceedings, Maker agrees and is also to pay to the owner and holder of this note a reasonable amount as attorney's or collection fees. MAKER expressly waives demand and presentment for payment, notice of nonpayment, notice of intent to accelerate, notice of acceleration, protest, notice of protest, notice of dishonor, bringing of suit, and diligence in taking any action to collect amounts called for hereunder. PAYMENT of this Note is secured all assets of Maker. Maker shall promptly pay over to Payee as a prepayment on this Note any proceeds from the sale or liquidation of any assets of Maker. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS NOTE shall be governed by the laws of the State of Texas. ENVIRONMENTAL OPPORTUNITIES FUND II (INSTITUTIONAL), L.P. By: Fund II Mgt. Co., LLC, its General Partner /s/ Bruce R McMaken ----------------------------------- By: Bruce R. McMaken Manager EX-99.N 4 dex99n.txt PLEDGE AGREEMENT Exhibit N PLEDGE AGREEMENT ---------------- THIS AGREEMENT, executed and delivered as of January 1, 2001, is from ENVIRONMENTAL OPPORTUNITIES FUND II L.P., a Delaware limited partnership ("Debtor"), to FUND II MGT. CO., L.L.C., a Delaware limited liability company ("Secured Party"), and the parties hereto do hereby agree as follows: I. Parties, Collateral and Obligations ----------------------------------- Debtor, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby grants to Secured Party a security interest in and pledge of all assets of Debtor (the "Assets"); together with all proceeds, monies, income and benefits attributable to or accruing to said property, which Debtor is or may hereafter become entitled to receive on account of said property. All property in which the Secured Party is herein granted a security interest is hereinafter called the "Collateral". The security interest granted herein secures the payment of all principal of, interest on and costs, attorneys' fees and collection fees incurred in connection with the collection of, the promissory note of Debtor of even date herewith payable to the order of Secured Party in the original principal amount of $594,417.86 (hereinafter called the "Note") (the obligations evidenced by the Note being hereafter collectively referred to as the "Obligations"). II. Warranties and Covenants of Debtor ---------------------------------- Debtor hereby warrants, covenants and agrees that: (A) Debtor is the owner of the Collateral free and clear from any adverse claim, security interest or encumbrance save and except only the lien and security interest granted hereby; and Debtor has full power and authority to sell and assign the Collateral and to grant to Secured Party a first and prior security interest therein as herein provided; (B) Until the Obligations have been paid in full, Debtor will not sell or offer to sell or otherwise transfer or encumber the Collateral or any interest therein, without the prior written consent of Secured Party; (C) Until the Obligations have been paid in full, Debtor will keep the Collateral free from any liens, security interests or encumbrances save and except only the lien and security interest granted hereby; and (D) The Debtor shall at all times and from time to time, at Debtors own expense, make, execute, acknowledge, and deliver and file and record in the proper filing and recording places, all such instruments, including appropriate financing statements with respect to the security interests created hereby as may be required by the Uniform Commercial Code and as may be necessary or as Secured Party may reasonably request in order to perfect and preserve the security interests under this Agreement. III. Events of Default ----------------- The term "Event of Default", whenever used in this Agreement, shall mean either or both of the following events or conditions: (A) The occurrence of an Event of Default under the Note; or (B) Debtor shall have breached any term or provision of this Pledge Agreement, and such breach shall continue uncured for a period of ten days following receipt of written notice of breach delivered by Secured Party to Debtor. IV. Remedies -------- Upon the happening of any Event of Default specified in Article III hereof, and at any time thereafter, at the option of the holder thereof, the Obligations shall become immediately due and payable without presentment or demand or any notice to Debtor to any other person obligated thereon and Secured Party shall have and may exercise any and all of the rights and remedies of a secured party under the Uniform Commercial Code as adopted in the State of Texas and as otherwise granted herein or under any other law or under any other agreement executed by Debtor, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of or utilize such portion of the Collateral and any part or parts thereof in any manner authorized or permitted under said Uniform Commercial Code after default by a debtor, and to apply the proceeds thereof toward payment of any costs and expenses and attorneys' fees and legal expenses thereby incurred by Secured Party and toward payment of the obligations hereby secured in such order or manner as Secured Party may elect. To the extent permitted by law, Debtor expressly waives any notice of sale or other disposition of the Collateral and any other rights or remedies of Debtor or formalities prescribed by law relevant to sale or disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after default hereunder; and to the extent any such notice is required and cannot be waived, Debtor agrees that if such notice is delivered to Debtor in the manner described in Article VII at his address therein stated at least ten days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement of giving of notice. All recitals in any instrument or of assignment or any other instrument executed by Secured Party incident to the sale, transfer, assignment or other disposition or utilization of the Collateral or any part thereof hereunder shall be full proof of the matter stated therein and no other proof shall be required to establish full legal propriety of the sale or other action taken by Secured Party or of any fact, condition or thing incident thereto and all prerequisites of such sale or other action or any fact, condition or thing incident thereto shall be presumed conclusively to have been performed or to have occurred. V. Secured Party's Power and Duties with Respect to Collateral --------------------------------- (A) Secured Party shall be entitled to receive and have delivered to Secured Party, to be held by Secured Party under this Agreement as Collateral, all payment on the Assets, and Debtor shall immediately pledge and deposit with Secured Party any such amounts that may come into his possession or control. (B) Secured Party shall be under no duty to collect any amount which may be or become due on any of the Collateral now or hereafter pledged hereunder, or to realize on the Collateral, collect principal, interest or dividends, to keep the same insured, make any presentments, demands, notice of protest, in connection with any of the Collateral, or do anything for the enforcement and collection of Collateral or the protection thereof. (C) Secured Party may, in Secured Party's discretion, but without obligation to do so, deposit the Collateral or any part thereof with a bank or banks for the purpose of safekeeping, and the duties of such banks shall be no greater than those of Secured Party hereunder. (D) Notwithstanding the generality of any of the foregoing, but in amplification of the same, Secured Party shall not be liable to or responsible for any diminution in the value of the Collateral from any cause whatsoever. (E) Debtor agrees to pay all taxes, charges, transfer fees and assessments against the Collateral and to do all things necessary to preserve and maintain the value and collectability thereof, and on the failure of Debtor to do so, Secured Party may, after giving Debtor written notice of Secured Party's intention to do so, make such payments and advance such sums on account thereof as to Secured Party in Secured Party's discretion seems desirable. Debtor agrees to reimburse Secured Party immediately upon demand for all such payments and advances, repayment of all of which is secured by this Agreement and the pledge of Collateral hereunder. VI. Satisfaction and Discharge -------------------------- When the Obligations shall have been paid in full and all obligations under this Agreement discharged, Secured Party will cause all of the Collateral together with any additions thereto and substitutions therefore, all dividends on the Collateral, then held by Secured Party, and all property, shares of stock, or other securities, into which the Collateral may have been changed or converted, to be delivered to Debtor, and shall cause to be executed and delivered such instruments as may be necessary to cancel this Agreement and revest the Collateral in Debtor free and clear of the lien and security interest hereby created. VII. Notices, Etc. ------------- All notices, certificates, requests, consents and other communications hereunder shall be in writing and shall be deemed delivered on the date mailed by first class registered or certified mail, return receipt requested, postage prepaid, or on the date personally delivered or sent by telex or telecopy, as follows: (i) if to Secured Party, addressed to Fund II Mgt. Co., L.L.C., 3100 Chase Tower, Houston, Texas 77002, attention Bruce R. McMaken, Manager; and (ii) if to Debtor, addressed to Environmental Opportunities Fund II L.P., 3100 Chase Tower, Houston, Texas 77002, attention: Bruce R. McMaken, Manager. or at such other address as either party may designate by notice given the other in accordance herewith. VIII. Survival of Agreements, Representations and Warranties, Etc. ------------------------------------ All agreements, representations and warranties contained herein or made in writing by or on behalf of Debtor in connection with the transactions contemplated hereby shall survive the execution and delivery of this Agreement, any investigation at any time made by Secured Party or on Secured Party's behalf, and the acquisition and disposition of the Note or any of the Obligations evidenced thereby. All statements contained in any certificate or other instrument delivered by or on behalf of Debtor pursuant hereto or in connection with the transactions contemplated hereby shall be deemed representations and warranties by Debtor hereunder. IX. Miscellaneous ------------- (A) This Agreement shall not prejudice the right of Secured Party to enforce collection of the Obligations by suit or in any lawful manner, or to resort to other security for the payment of the Obligations, this Agreement being additional, cumulative and concurrent security for the payment of the Note. (B) No right or remedy in this Agreement or in the Note is intended to be exclusive of any other right or remedy, but every such right or remedy shall be cumulative and shall be in addition to every right or remedy herein or in the Note conferred or now or hereafter existing at law or in equity or by statute. (C) No delay or omission by Secured Party to exercise any right or remedy shall impair such right or remedy or other right or remedy or shall be construed to be a waiver of any default or an acquiescence therein; and every right and remedy herein conferred or now or hereafter existing at law or in equity or by statute, may be exercised separately or concurrently and in such order and as often as may be deemed expedient by Secured Party. Not limiting the generality of the foregoing, pursuit or exercise of any right or remedy herein or in the Note, or by law or in equity, shall not be, and shall not be considered to be, an election against, waiver or relinquishment of, any other right or remedy. (D) The invalidity of any right or remedy in any jurisdiction shall not invalidate such right or remedy in any other jurisdiction. The invalidity or unenforceability of any of the rights or remedies herein provided in any jurisdiction shall not in any way affect the right to the enforcement in such jurisdiction or elsewhere of any of the other rights or remedies herein provided. (E) This Agreement shall in no event be construed as relieving Debtor from full liability on the Obligations which are secured hereby or for any deficiency thereon. (F) This Agreement shall be binding upon and inure to the benefit of the successors, representatives and assigns of the parties hereto. (G) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. (H) This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first above written. DEBTOR: ------ Environmental Opportunities Fund II L.P. By: Fund II Mgt. Co., L.L.C., its General Partner By /s/ Bruce R. McMaken ---------------------------- Bruce R. McMaken, Manager SECURED PARTY: ------------- FUND II MGT. CO., L.L.C. By: /s/ Bruce R. McMaken ---------------------------- Bruce R. McMaken, Manager EX-99.O 5 dex99o.txt PLEDGE AGREEMENT Exhibit O PLEDGE AGREEMENT ---------------- THIS AGREEMENT, executed and delivered as of January 1, 2001, is from ENVIRONMENTAL OPPORTUNITIES FUND II (INSTITUTIONAL), L.P., a Delaware limited partnership ("Debtor"), to FUND II MGT. CO., L.L.C., a Delaware limited liability company ("Secured Party"), and the parties hereto do hereby agree as follows: I. Parties, Collateral and Obligations ----------------------------------- Debtor, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby grants to Secured Party a security interest in and pledge of all assets of Debtor (the "Assets"); together with all proceeds, monies, income and benefits attributable to or accruing to said property, which Debtor is or may hereafter become entitled to receive on account of said property. All property in which the Secured Party is herein granted a security interest is hereinafter called the "Collateral". The security interest granted herein secures the payment of all principal of, interest on and costs, attorneys' fees and collection fees incurred in connection with the collection of, the promissory note of Debtor of even date herewith payable to the order of Secured Party in the original principal amount of $2,252,948.96 (hereinafter called the "Note") (the obligations evidenced by the Note being hereafter collectively referred to as the "Obligations"). II. Warranties and Covenants of Debtor ---------------------------------- Debtor hereby warrants, covenants and agrees that: (A) Debtor is the owner of the Collateral free and clear from any adverse claim, security interest or encumbrance save and except only the lien and security interest granted hereby; and Debtor has full power and authority to sell and assign the Collateral and to grant to Secured Party a first and prior security interest therein as herein provided; (B) Until the Obligations have been paid in full, Debtor will not sell or offer to sell or otherwise transfer or encumber the Collateral or any interest therein, without the prior written consent of Secured Party; (C) Until the Obligations have been paid in full, Debtor will keep the Collateral free from any liens, security interests or encumbrances save and except only the lien and security interest granted hereby; and (D) The Debtor shall at all times and from time to time, at Debtors own expense, make, execute, acknowledge, and deliver and file and record in the proper filing and recording places, all such instruments, including appropriate financing statements with respect to the security interests created hereby as may be required by the Uniform Commercial Code and as may be necessary or as Secured Party may reasonably request in order to perfect and preserve the security interests under this Agreement. III. Events of Default ----------------- The term "Event of Default", whenever used in this Agreement, shall mean either or both of the following events or conditions: (A) The occurrence of an Event of Default under the Note; or (B) Debtor shall have breached any term or provision of this Pledge Agreement, and such breach shall continue uncured for a period of ten days following receipt of written notice of breach delivered by Secured Party to Debtor. IV. Remedies -------- Upon the happening of any Event of Default specified in Article III hereof, and at any time thereafter, at the option of the holder thereof, the Obligations shall become immediately due and payable without presentment or demand or any notice to Debtor to any other person obligated thereon and Secured Party shall have and may exercise any and all of the rights and remedies of a secured party under the Uniform Commercial Code as adopted in the State of Texas and as otherwise granted herein or under any other law or under any other agreement executed by Debtor, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of or utilize such portion of the Collateral and any part or parts thereof in any manner authorized or permitted under said Uniform Commercial Code after default by a debtor, and to apply the proceeds thereof toward payment of any costs and expenses and attorneys' fees and legal expenses thereby incurred by Secured Party and toward payment of the obligations hereby secured in such order or manner as Secured Party may elect. To the extent permitted by law, Debtor expressly waives any notice of sale or other disposition of the Collateral and any other rights or remedies of Debtor or formalities prescribed by law relevant to sale or disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after default hereunder; and to the extent any such notice is required and cannot be waived, Debtor agrees that if such notice is delivered to Debtor in the manner described in Article VII at his address therein stated at least ten days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement of giving of notice. All recitals in any instrument or of assignment or any other instrument executed by Secured Party incident to the sale, transfer, assignment or other disposition or utilization of the Collateral or any part thereof hereunder shall be full proof of the matter stated therein and no other proof shall be required to establish full legal propriety of the sale or other action taken by Secured Party or of any fact, condition or thing incident thereto and all prerequisites of such sale or other action or any fact, condition or thing incident thereto shall be presumed conclusively to have been performed or to have occurred. V. Secured Party's Power and Duties with Respect to Collateral --------------------------------- (A) Secured Party shall be entitled to receive and have delivered to Secured Party, to be held by Secured Party under this Agreement as Collateral, all payment on the Assets, and Debtor shall immediately pledge and deposit with Secured Party any such amounts that may come into his possession or control. (B) Secured Party shall be under no duty to collect any amount which may be or become due on any of the Collateral now or hereafter pledged hereunder, or to realize on the Collateral, collect principal, interest or dividends, to keep the same insured, make any presentments, demands, notice of protest, in connection with any of the Collateral, or do anything for the enforcement and collection of Collateral or the protection thereof. (C) Secured Party may, in Secured Party's discretion, but without obligation to do so, deposit the Collateral or any part thereof with a bank or banks for the purpose of safekeeping, and the duties of such banks shall be no greater than those of Secured Party hereunder. (D) Notwithstanding the generality of any of the foregoing, but in amplification of the same, Secured Party shall not be liable to or responsible for any diminution in the value of the Collateral from any cause whatsoever. (E) Debtor agrees to pay all taxes, charges, transfer fees and assessments against the Collateral and to do all things necessary to preserve and maintain the value and collectability thereof, and on the failure of Debtor to do so, Secured Party may, after giving Debtor written notice of Secured Party's intention to do so, make such payments and advance such sums on account thereof as to Secured Party in Secured Party's discretion seems desirable. Debtor agrees to reimburse Secured Party immediately upon demand for all such payments and advances, repayment of all of which is secured by this Agreement and the pledge of Collateral hereunder. VI. Satisfaction and Discharge -------------------------- When the Obligations shall have been paid in full and all obligations under this Agreement discharged, Secured Party will cause all of the Collateral together with any additions thereto and substitutions therefore, all dividends on the Collateral, then held by Secured Party, and all property, shares of stock, or other securities, into which the Collateral may have been changed or converted, to be delivered to Debtor, and shall cause to be executed and delivered such instruments as may be necessary to cancel this Agreement and revest the Collateral in Debtor free and clear of the lien and security interest hereby created. VII. Notices, Etc. ------------- All notices, certificates, requests, consents and other communications hereunder shall be in writing and shall be deemed delivered on the date mailed by first class registered or certified mail, return receipt requested, postage prepaid, or on the date personally delivered or sent by telex or telecopy, as follows: (i) if to Secured Party, addressed to Fund II Mgt. Co., L.L.C., 3100 Chase Tower, Houston, Texas 77002, attention Bruce R. McMaken, Manager; and (ii) if to Debtor, addressed to EOF II (Institutional), L.P., 3100 Chase Tower, Houston, Texas 77002, attention: Bruce R. McMaken, Manager. or at such other address as either party may designate by notice given the other in accordance herewith. VIII. Survival of Agreements, Representations and Warranties, Etc. ------------------------------------ All agreements, representations and warranties contained herein or made in writing by or on behalf of Debtor in connection with the transactions contemplated hereby shall survive the execution and delivery of this Agreement, any investigation at any time made by Secured Party or on Secured Party's behalf, and the acquisition and disposition of the Note or any of the Obligations evidenced thereby. All statements contained in any certificate or other instrument delivered by or on behalf of Debtor pursuant hereto or in connection with the transactions contemplated hereby shall be deemed representations and warranties by Debtor hereunder. IX. Miscellaneous ------------- (A) This Agreement shall not prejudice the right of Secured Party to enforce collection of the Obligations by suit or in any lawful manner, or to resort to other security for the payment of the Obligations, this Agreement being additional, cumulative and concurrent security for the payment of the Note. (B) No right or remedy in this Agreement or in the Note is intended to be exclusive of any other right or remedy, but every such right or remedy shall be cumulative and shall be in addition to every right or remedy herein or in the Note conferred or now or hereafter existing at law or in equity or by statute. (C) No delay or omission by Secured Party to exercise any right or remedy shall impair such right or remedy or other right or remedy or shall be construed to be a waiver of any default or an acquiescence therein; and every right and remedy herein conferred or now or hereafter existing at law or in equity or by statute, may be exercised separately or concurrently and in such order and as often as may be deemed expedient by Secured Party. Not limiting the generality of the foregoing, pursuit or exercise of any right or remedy herein or in the Note, or by law or in equity, shall not be, and shall not be considered to be, an election against, waiver or relinquishment of, any other right or remedy. (D) The invalidity of any right or remedy in any jurisdiction shall not invalidate such right or remedy in any other jurisdiction. The invalidity or unenforceability of any of the rights or remedies herein provided in any jurisdiction shall not in any way affect the right to the enforcement in such jurisdiction or elsewhere of any of the other rights or remedies herein provided. (E) This Agreement shall in no event be construed as relieving Debtor from full liability on the Obligations which are secured hereby or for any deficiency thereon. (F) This Agreement shall be binding upon and inure to the benefit of the successors, representatives and assigns of the parties hereto. (G) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. (H) This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first above written. DEBTOR: ------ Environmental Opportunities Fund II (INSTITUTIONAL), L.P. By: Fund II Mgt. Co., L.L.C., its General Partner By /s/ Bruce R. McMaken ----------------------------- Bruce R. McMaken, Manager SECURED PARTY: ------------- FUND II MGT. CO., L.L.C. By: /s/ Bruce R. McMaken ---------------------------- Bruce R. McMaken, Manager -----END PRIVACY-ENHANCED MESSAGE-----