GENERAL

ECOMAT, INC. (the "Company" or "Ecomat") is a Delaware corporation that has been formed to develop the Ecomat concept -- an environmentally sound solution to the current standard dry cleaning method that utilizes percloroethylene ("perc"), which has been shown to have various toxic effects. As of May 31, 1998, Ecomat had five active subsidiaries, four of which operated Company-owned stores and the fifth being the franchisor of the Ecomat concept, as follows:

1. ECOCLEAN SYSTEMS INTERNATIONAL, LTD. ("Ecoclean Systems") operates a Company-owned store at 147 Palmer Avenue, Mamaroneck, New York. Ecoclean Systems...