Form: 8-K

Current report filing

April 12, 2002

Published on April 12, 2002


Exhibit 99.1

EDWIN H. NORDLINGER (EN-6258)
DEPUTY REGIONAL DIRECTOR
ATTORNEY FOR PLAINTIFF
SECURITIES AND EXCHANGE COMMISSION
NORTHEAST REGIONAL OFFICE
233 BROADWAY
NEW YORK, NY 10279
(646) 428-1630

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION,

PLAINTIFF,

V. 01 CV 11586
JUDGE GEORGE B. DANIELS
SAVE THE WORLD AIR, INC.,
JEFFREY ALAN MULLER, AND
BILLY BLACKWELDER,
DEFENDANTS.

- -----------------------------------------------------------------------

FINAL JUDGMENT OF PERMANENT INJUNCTION
AND OTHER RELIEF AGAINST
SAVE THE WORLD AIR, INC.
------------------------

Plaintiff United States Securities and Exchange Commission
("Commission") having commenced this action on December 19, 2001 by filing its
Complaint ("Complaint") for injunctive and other equitable relief, charging,
among others, Defendant Save the World Air, Inc. ("STWA") with violations of
Section 17(a) of the Securities Act of 1933 [15 U.S.C. ss. 77q(a)], and Sections
10(b), 13(a) and 13(b) of the Securities Exchange Act of 1934 [15 U.S.C. ss.ss.
78j(b), 78m(a) and 78m(b)] and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1
thereunder [17 C.F.R. ss. 240.10b-5, 240.12b-20, 240.13a-1, 240.13a-13, and
240.13b2-1]; and defendant STWA, having executed the Consent of Save the World

1






Air, Inc. to Final Judgment of Permanent Injunction and Other Relief
("Consent"), which is annexed hereto, having admitted to the service of the
Summons and Complaint on it, having admitted to the jurisdiction of this Court
over it and over the subject matter of this action, having waived the entry of
findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules
of Civil Procedure, and without admitting or denying the allegations of the
Commission's Complaint (except as to jurisdiction, which are admitted), and
having consented to the entry of this Final Judgment of Permanent Injunction And
Other Equitable Relief Against Save the World Air, Inc. ("Final Judgment");
without further notice:
I.

IT IS ORDERED, ADJUDGED AND DECREED that defendant STWA, its agents,
servants, employees, attorneys-in-fact, and all persons in active concert or
participation with STWA who receive actual notice of this Final Judgment by
personal service or otherwise, and each of them, directly or indirectly, by
using any means or instruments of transportation or communication in interstate
commerce, or by using the mails, in connection with the offer or sale of any
security, be and hereby are permanently restrained and enjoined from:

(a) employing any device, scheme, or artifice to defraud;

(b) obtaining money or property by means of any untrue statement of a material
fact or any omission to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; or

(c) engaging in any transaction, practice, or course of business which operates
or would operate as a fraud or deceit upon a purchaser, in violation of Section
17(a) of the Securities Act of 1933 [15 U.S.C.ss.77q(a)].

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II.

IS FURTHER ORDERED, ADJUDGED AND DECREED that defendant STWA, its
agents, servants, employees, attorneys-in-fact, and all persons in active
concert or participation with them who receive actual notice of this Final
Judgment by personal service or otherwise, and each of them, directly or
indirectly, by the use of any means or instrumentality of interstate commerce,
or of the mails, or of any facility of a national securities exchange, in
connection with the purchase or sale of any security, be and hereby are
permanently restrained and enjoined from:

(a) employing any device, scheme, or artifice to defraud;

(b) making any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; or

(c) engaging in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person, in violation of Section 10(b) of
the Securities Exchange Act of 1934 [15 U.S.C.ss.78j(b)] and Rule 10b-5
promulgated thereunder [17 C.F.R.ss.240.10b-5].

III.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that defendant STWA, its
agents, servants, employees, attorneys-in-fact, and all persons in active
concert or participation with STWA who receive actual notice of this Final
Judgment by personal service or otherwise, and each of them, directly or
indirectly, be and hereby are permanently restrained and enjoined from:

3






(a) failing to file with the Commission in accordance with the rules and
regulations prescribed by the Commission, such information and documents as the
Commission has prescribed;

(b) filing with the Commission information and documents, including the
amendments thereto, which contain false and materially misleading statements or
omissions of material fact;

(c) failing to make and keep books, records, and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of an issuer;

(d) failing to file such further material information as is necessary to make
the required statements made therein in light of the circumstances in which they
were made, not misleading; and

(e) falsifying or causing to be falsified any books, records, or accounts
subject to Section 13(b)(2)(A) of the Securities Exchange Act of 1934, in
violation of Sections 13(a) and 13(b) of the Exchange Act [15 U.S.C. ss.ss.
78m(a) and 78m(b)] and Exchange Act Rules 12b-20, 13a-1, 13a-13 and 13b2-1 [17
C.F.R. ss.ss. 240.12b-20, 240.13a-1, 240.13a-13, and 240.13b2-1].

IV.

IT IS FURTHER ORDERED that the attached Consent be, and hereby is,
incorporated herein with the same force and effect as if fully set forth herein.

V.

IT IS FURTHER ORDERED that STWA shall comply with the undertakings set
forth in the attached Consent.

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VI.

IT IS FURTHER ORDERED that the Court shall retain jurisdiction of this
matter for all purposes, including, but not limited to, implementing and
enforcing the terms and conditions of this Final Judgment.

VII.

IT IS FURTHER ORDERED that the Court expressly determines that there is
no just reason for delay in the entry of this Final Judgment. The Clerk of the
Court is hereby directed pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure to enter this Final Judgment forthwith.

VIII.

IT IS FURTHER ORDERED that pursuant to Rule 65(d) of the Federal Rules
of Civil Procedure, this Final Judgment is binding upon defendant STWA, its
officers, agents, servants, employees, and attorneys-in-fact, and upon those
persons in active concert or participation with them who receive actual notice
of this Final Judgment by personal service or otherwise.

Dated: ________________, 2002

SO ORDERED:

----------------------------
United States District Judge

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EDWIN H. NORDLINGER (EN-6258)
DEPUTY REGIONAL DIRECTOR
ATTORNEY FOR PLAINTIFF
SECURITIES AND EXCHANGE COMMISSION
NORTHEAST REGIONAL OFFICE
233 BROADWAY
NEW YORK, NY 10279
(646) 428-1630

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION,

PLAINTIFF,

V. 01 CV 11586
JUDGE GEORGE B. DANIELS
SAVE THE WORLD AIR, INC.,
JEFFREY ALAN MULLER, AND
BILLY BLACKWELDER,
DEFENDANTS.

- -----------------------------------------------------------------------

CONSENT OF SAVE THE WORLD AIR, INC. TO
FINAL JUDGMENT OF PERMANENT INJUNCTION AND OTHER RELIEF
-------------------------------------------------------

1. Defendant Save the World Air, Inc. ("STWA"), upon the advice of
counsel and being fully apprised of its rights, having read and understood the
terms of the attached Final Judgment of Permanent Injunction and Other Equitable
Relief Against Save the World Air, Inc. ("Final Judgment"), admits to the
jurisdiction of this Court, waives the entry of findings of fact and conclusions
of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, and without
further notice, prior trial, hearing, presentation of any evidence, adjudication

1






of any issue of fact, or argument, and without admitting or denying the
allegations contained in the Complaint of Plaintiff Securities and Exchange
Commission ("Commission") (except as to jurisdiction, which are admitted),
hereby consents to the entry of the annexed Final Judgment.

2. STWA agrees that this Consent of Save the World Air, Inc. to Final
Judgment of Permanent Injunction and Other Relief ("Consent") shall be
incorporated by reference in and made part of the Final Judgment.

3. STWA waives any right it may have to appeal from the Final Judgment.

4. STWA agrees that it will not oppose the enforcement of the Final
Judgment on the ground, if any exists, that it fails to comply with Rule 65(d)
of the Federal Rules of Civil Procedure, and hereby waives any objection it may
have based thereon.

5. STWA acknowledges that any violation of any of the terms of the
annexed Final Judgment may place it in contempt of this Court and subject it to
civil or criminal sanctions, or both.

6. STWA enters into this Consent voluntarily and acknowledges that no
tender, offer, promise, or threat of any kind has been made by plaintiff
Commission, or any member, officer, attorney, agent, or representative, to
induce it to enter into this Consent.

7. STWA acknowledges that it has read, understands, and agrees to
comply with the policy of the Commission, set forth in 17 C.F.R. ss. 202.5(e),
not to permit a defendant to consent to a judgment or order that imposes relief
or a sanction while denying any allegation in the Complaint or finding in a
judgment or order. In compliance with this policy, STWA agrees not to take any
action or make, or permit to be made, any public statement denying, directly or
indirectly, any allegations in the Complaint or creating the impression that the
Complaint or Final Judgment is without factual basis. If STWA breaches this
agreement, the Commission may petition the Court to vacate the Final Judgment
and restore this proceeding to the active docket. Nothing in this provision
affects STWA's (i) testimonial obligations or (ii) right to take legal positions

2






in litigation in which the Commission is not a party.

8. STWA acknowledges that, subject to the procedures set forth in
Commission rules, it has been informed that the Commission, in its sole and
exclusive discretion, may refer this matter, or any information or evidence
gathered in connection therewith or derived therefrom, to any person or entity
having appropriate administrative, civil, or criminal jurisdiction.

9. STWA acknowledges and agrees that this civil action, and its Consent
to the entry of the Final Judgment, are for the purposes of resolving this civil
action only, in conformity with the provisions of 17 C.F.R. ss. 202.5(f), and do
not resolve, affect, or preclude any other action or proceeding that may be
brought against STWA. Consistent with the provisions of 17 C.F.R. ss. 202.5(f),
STWA waives any claim of Double Jeopardy based upon the settlement of this
proceeding, including the imposition of any remedy or civil penalty herein. STWA
acknowledges that the Court's entry of a permanent injunction may have
collateral consequences under federal or state law and the rules and regulations
of self-regulatory organizations, licensing boards, and other regulatory
organizations.

10. In connection with any continuing investigation or litigation by
the Commission in the matter giving rise to this Consent, Complaint and Final
Judgment, STWA, subject to the procedures set forth in Commission rules and the
privileges and protections available to STWA under state or federal law,
including the attorney-client privilege and attorney work-product protections,
undertakes to disclose truthfully to the Commission and its representatives all
information concerning STWA's own activities and the activities of others on any
matters about which the Commission may reasonably inquire, and undertakes
further to attend all meetings at which its presence is reasonably requested
with respect to the matters about which the Commission may reasonably inquire

3






and to appear and testify truthfully at any trial, hearing, or court or
administrative proceeding with respect to any matters about which the Commission
may request its testimony, all of which, as set forth above, relates to the
matter giving rise to this Consent, Complaint and Final Judgment. Further, in
connection with any such continuing Commission investigation or litigation in
the matter giving rise to this Consent, Complaint and Final Judgment, STWA
undertakes further, subject to the procedures set forth in the Commission rules
and the privileges and protections available to it under state or federal law,
to provide to the Commission any documents, records, or other tangible evidence
in its possession, custody, or control, relating to the matters about which the
Commission or its representatives may reasonably inquire. In connection with any
such continuing Commission investigation or litigation in the matter giving rise
to this Consent, Complaint, and Final Judgment, STWA agrees that it will not
assert the Fifth Amendment as a bar to providing any of the information required
hereunder.

11. STWA acknowledges that this Consent embodies the entire
understanding of the parties concerning the settlement of this action.

12. STWA consents further that this Court shall retain jurisdiction of
this matter for all purposes.

13. Except as explicitly provided in this Final Judgment and Consent,
nothing herein is intended to or shall be construed to have created,
compromised, settled or adjudicated any claims, causes of action, or rights of
any person whomsoever, other than as between the Commission and STWA, in
accordance with the Consent.

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14. STWA states that it is its intention that this Consent, the
Complaint and Final Judgment not constitute collateral estoppel as to any issue
of law or fact nor constitute a record, report, statement or data compilation
within the meaning of Rule 803(8) of the Federal Rules of Evidence. STWA
understands that the Commission takes no position concerning STWA's statement or
its intention.

15. STWA hereby waives any rights under the Equal Access to Justice
Act, the Small Business Regulatory Enforcement Fairness Act of 1996 or any other
provision of law to pursue reimbursement of attorney's fees or other fees,
expenses or costs expended by STWA to defend against this action. For these
purposes, STWA agrees that STWA is not the prevailing party in this action since
the parties have reached a good faith settlement.

16. STWA hereby consents and agrees that the annexed Final Judgment may
be presented by the Commission to the Court for signature, filing, and entry
without further notice and delay.

17. STWA agrees that service by first class mail to Leodis C. Matthews,
Esq., Matthews & Partners, 4322 Wilshire Boulevard, Suite 300, Los Angeles,
California, 90010, shall be deemed personal service for all correspondence,
service and notices as to any matter related to this Consent and the annexed

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Final Judgment, unless STWA notifies the Commission otherwise by letter
addressed to counsel for the Securities and Exchange Commission, Northeast
Regional Office, 233 Broadway, New York, New York 10279.

Dated: March _____, 2002
Save the World Air, Incorporated

By: _______________________

Title:______________________

STATE OF NEW YORK)
)ss.:
COUNTY OF )

On this ___ day of _________, 2002, before me personally appeared
____________, to be known to be the person who executed the foregoing Consent of
Save the World Air, Inc. to Final Judgment of Permanent Injunction and Other
Equitable Relief Against Save the World Air, Inc., and did acknowledge to me
that he was authorized to execute the same on behalf of Save the World Air,
Incorporated.

-----------------------------
NOTARY PUBLIC

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RESOLUTION

OF

SAVE THE WORLD AIR, INCORPORATED

RESOLVED, that

________________, _________ of Save the World Air, Incorporated, is authorized
and directed to execute on behalf of Save the World Air, Inc., the Consent of
Save the World Air, Inc. to Final Judgment of Permanent Injunction and Other
Relief dated _____________, 2002 as attached hereto and made part hereof.

SAVE THE WORLD AIR, INCORPORATED

--------------------------------------